Monday, October 14, 2013

Obamacare giveth - but first it taketh away

I don’t know if I never knew Obamacare contained this provision or just forgot about it (like I forgot about the nutritional labeling provision):

Gold, the co-founder, said that without a $112 million federal loan through Obamacare, CoOportunity would have difficulty growing to the size where it can spread risks and costs among enough people to succeed.

The loan gives the company the financial backing it needs to begin selling policies and paying claims, and is due to be repaid to the federal government. The Affordable Care Act contained $6 billion in loans to establish other cooperatives around the country.

Because the new law requires insurers to spend 85 percent of premiums from large-group policies on health care claims, he said, it's almost impossible for a publicly traded health insurance company to pay its administrative costs and still make a profit that appeals to investors.

“You don't see for-profit companies starting in the insurance business any more,” Gold said. “That's why the ACA seeded nonprofit cooperatives to provide competition in a market that's increasingly less competitive.”

So if I understand this correctly, the architects of Obamacare knew the law would reduce competition and decided to correct for that by providing government money to create new competition. They deliberately destroyed what little was left of the sellers’ side of a market in health insurance then tried to artificially recreate it. Is it just me or is this slightly insane?


DL Sly said...

No, it's not you. And it's not "slightly insane". It's completely insane. But then what else would you expect from a ponzi scheme written by the worlds most proficient practitioners?

E Hines said...

Insane or not, it's not the first time. Food stamps came about in the same prairie house addition sequencing of "fixing" failed programs by adding on, rather than by rescinding the failures.

Many laws evolve that way. And my experience with USAF regs was quite similar; although there, the "rationale" was more transparent: job turnover in the USAF was high by design, and problems often existed that wanted correction. Never minding that the most efficient correction almost always was either better training or better enforcement, the most career-enhancing fix was to be the author of a new reg that addressed the specific, narrowly defined problem.

Eric Hines