During the recent "government shutdown," the most widely expressed opinion here in the heartland was, "I don't miss D.C., do you?" For most of us who are self-employed, or privately employed, the government represents a big negative on the balance sheet. Not only does the bloated bureaucracy require constant infusions of our hard-earned cash, but the feds write laws and regulations that impede our ability to earn that cash. We'd be better off paying all of D.C. to stay home, in a permanent shutdown, to keep them out of our businesses and homes.
The detrimental federal interference is nowhere more obvious than in health care. The question has always been: Are those architects of Obamacare really just stupid about the financial disaster they wrought on the American people, or was it purposeful? Martin Armstrong wrote, "Those in government never look at what they are doing to society. They believe they possess the Divine Right of Kings to do whatever they please without regard for the people." But there is more to it than just hubris. Bureaucrats possess power, and power is often sought and bought by those with means. So when looking to motive, "follow the money."
Sadly, it has taken me years to understand the motive for insurance companies to get in bed with Obamacare. I knew it benefited the big insurers and not the working-class citizens, whose rates went up across the board. But how? And why was there not a mass outcry among the average worker? But I've got it now, and its uglier than I imagined.
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In my state of Iowa, a baby boomer family of four in Ames once could buy insurance – unsubsidized by taxpayers – for about $4,200 a year. Today, the median household income is $56,570, and, under an average Obamacare plan, the cost of health insurance is $60,752. But – and this is key to understanding the scam – the family only pays about the same $4,200 a year. The other $56,532 is covered by the Obamacare subsidy. So as de Tocqueville understood in 1802, there would come a day when someone would figure out how to rob the public purse. And that day has come with Big Insurance and Obamacare.
In sum, the Obamacare architects gave big insurance giants a virtual state by state monopoly. They did it by mandating "guaranteed issue" – the requirement that companies must issue insurance to anyone without consideration of their health status. Essentially, "guaranteed issue," if applied to homeowners insurance, would force State Farm or Geiko or USAA to sell homeowners insurance to a person whose house was on fire. What insurance company could afford to do that? Aha! Those plugged into the D.C. power structure. Of course, less-connected companies through various technicalities would not be part of the subsidy plan and could not sell insurance at 10 times the actual value. So they go bust, and viola – state insurance monopolies.
Now, here is the beautiful part if you are one of the "chosen" insurance giants: Without competition, and with all the Obamacare mandates, employers – and especially the government employers – are providing insurance at the same cost to their employees, but the taxpayer is getting soaked for over $40,000 in "subsidies" that are paid into the coffers of the insurance cartel and the agencies that administrate the whole debacle. This whole slush-fund sidestep is so slick it makes the Military Industrial Complex look like rank amateurs.
Enter Trump. One of my favorites, Victor Davis Hanson, has aptly likened Trump to "chemotherapy to cure the cancer of the permanent political class." It should come as no surprise that Big Insurance will do whatever it takes to continue selling $4,400 policies for over $40,000. The Trump administration realized that this system is kept functioning by eliminating free-market competition. To cure the problem, Trump's people got rid of the "guaranteed issue" mandate. Simple. Sweet. Called "the Trump Option," it solves the problem through free-market competition.
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Then the swamp strikes back. Some Democrat-run states – and my lone Republican state of Iowa – passed regulation outlawing the Trump Option. In Iowa, during a close governor race, the insurance commissioner, without mandatory committee meetings, and apparently without public comment, stopped the Trump Option deregulation. The result? A virtual Blue Cross monopoly continues to exist in Iowa, and instead of government-employee insurance costing about $300/month, it costs $1,850 – of course, paid for by the taxpaying citizens of Iowa. So too, a teacher in Iowa City who wanted to put her 30-year-old spouse and 10-year-old child on her health plan, under the Trump Option would have paid $367/month. Now that teacher will be soaked for $1,850.
I cannot prove that Big Insurance money went into the recent politics, but it is suspicious that the Trump Option – one that would have restored free-market competition to the insurance market – was overturned so precipitously during a hard-fought governor race. Who doubts the motivation insurance companies have to keep such a sweet deal going? In fact, if I wake up unexpectedly dead, please raise an alarm.
Obamacare is a disease. It is characterized by greed, corruption and propaganda. President Trump's option – free-market competition, competitive pricing and freedom of choice – is the cure. But don't expect the swamp of bureaucrats and insurance execs to give up without a real fight. If your state has not accepted the Trump Pption, call your state representatives, send copies of this article, raise a stink – because your legislatures are unlikely to understand the scam that has been administratively perpetrated upon their constituents.