July 29, 2004
Kerry's Speech
Well I listened to a big chunk of it and for me it was horrid. I thought it was an amalgamation of platitudes, bullshit, and outright nonsense. When Kerry said,
...health care is not a privilege for the wealthy, the connected, and the elected – it is a right for all Americans.
I just about rolled my eyes out of the left side of my head. When I hear this I think, Marxist claptrap. Commodities that are private goods are not rights to me. Promising somebody a right to a private good is a recipe for disaster. When everybody has a right to a Porsche then soon you either run out of Porsche's or the quality of Prosche's goes right down the toilet.
The problems with health care are numerous. There is the tax benefits to recieving health care through one's employer vs. using after tax dollars to buy it outright. Plus there is the demand for the latest and greatest treatment, procedure, drug, etc. Also, is the insitutional set up where anybody who shows up at an emergency room is treated irrespective of ability to pay. Now this might be the right thing to do, but we also have to accept the fact that this is going to push health care costs up dramatically. Many young people will opt for no insurance because the risks for them are low. Since they have no insurance (and likely few assets) they are collection proof for the most part. If they run a large bill it is up to the rest of us to pick up the tab. It shouldn't take a great deal of effort to see that this is going to drive up health care costs.
Are the above problems the result of failed Republican policies? No. Anybody who says otherwise is a fool (either that or they are a mendacious politician seeking office). So to take this one step further and say it is a right means that the situation is likely to get worse not better. Sure costs might stop rising as quickly as they currently are with more government interference, but it will likely come a decrease in quality. And the decrease in quality does not have to mean a decrease below what we have today.
For example in another part of the speech Kerry talked about the potential benefits of stem cell research. What if government intervention ends up preventing that (in the name of cost containment). Suddenly all those possible benefits are gone. Apply such an effect on a broad scale and you have stagnation in quality improvments in health care. Is that a cost? Sure sounds like it to me.1
This comment also was highly annoying,
We believe in the value of doing what's right for everyone in the American family.
Government tends to do things that for the most part are redistribution of income. Subsidy for this, subsidy for that. Social Security and Medicare are the two biggest and best examples of this. Money is taken from one group and given to another. As such you cannot "do what is right for everyone in the American Family." Kerry was right that elections are about choices, and when you make a choice either individually or collectively it means other choices are not selected. A choice to help seniors means you have also chosen to reduce the incomes of other Americans. Is it right to prop up a system that continuously faces bankruptcy and requires higher and hgiher taxes to sustain it? Is that doing right by the younger generations? Is Kerry doing right by refusing to consider any and all privatization schemes for Social Security and Medicare.
All in all I thought the speech was dull. It was a tired repetition of the same old Democratic policies proposals and plans. After listening to these warmed up leftovers from previous Democratic conventions I can't see any reason to vote for Kerry other than gridlock and there are good arguments to still not vote for him such as appointing judges to the Supreme Court. Now the only issue is who to vote for...or to even vote at all.
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1The idea of re-insuring the insurance companies isn't bad, but I still have reservations as it could be just the tip of the iceberg. Perhaps if there was some sort of super-majority requirement for changing the levels of re-insurance.
I agree - that speech was horrible, and could be summed up as
Vietnam. Bush lied. Vientnam. I'll make us safer (just don't ask me how). Protectionism. Vietnam. Socialism. Bush is a fascist. Let's be civil. Vietnam.
I disagree with you about having the government reinsure health insurance companies. Even if you fix the ceiling at $50,000 and require a 75% majority of both houses to change it, you'll still run into the problem of health insurance carriers attempting to shift more and more of the burden of paying for health care onto the government by raising prices until they fall above the threshold. In other words, the covered procedure that costs $40K today will cost $51K after the reinsurance bill passes. Eventually, to contain rising costs, the government will place price controls on medical procedures, and at that point we will effectively have socialized health care. Furthermore, inflation will also effectively lower the ceiling from year to year, shifting the burden for paying for health care more and more onto the federal government's back.
One can escape these problems by making reinsurance optional and charging insurance carriers a premium based on the dollar value of their reinsurance claims submitted in the past year. However, since the federal government will be running the scheme, the temptation for the insurance carriers to manipulate the price of reinsurance through lobbying will be enormous, not to mention the costs of yet another inefficient federal bureaucracy.
Posted by: Tom Ault on July 30, 2004 09:49 AMI agree with Tom. This re-insurance scheme is simply putting make-up on a pig.
The insurance market doesn't benefit from competition. If the goal is to insure all Americans then insurance companies profit from excluding high risk individuals from their portfolios. Those indiviudals are passed onto other companies until eventually the insurer of last resort, the government, gets stuck with them. What value is the insurance company adding? It's managing its capital and risk exposure for the benefit of its shareholders. What other value is created by competition in the insurance market? Not health care delivery or management, but simply insurance.
The only segment where competition and innovation will come from is in health care delivery.
We need to seperate insurance from health care delivery if the goal is to give health insurance to each individual.
If the goal is to allow some people to be excluded from insurance coverage then it makes sense to have insurance companies be your parsing agents for they are then indeed adding value to the system by weeding out the high risk. However, if the result is simply to keep the profitable people on private insurance and push the high risk people onto the government, why are we encouraging such gouging at the taxpayers expense. Think rent seeking.
OK, who's head just exploded.
Posted by: TangoMan on July 30, 2004 12:10 PM