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6/28/12

Birthday and Judgement Day on the Same Day


It’s My Birthday and I Want a Constitutional Present from the Supreme Court
I was born 54 years ago in the People’s Republic of New York.

Back then, all I wanted was a new baseball glove
But I don’t mention that because I want you to send me a present or to say Happy Birthday.
Instead, I’m hoping at least five of the Justices on the Supreme Court will make this day special by rejecting Obamacare.
And I mean the entire legislation, not just the mandate. I want them to throw out all the new taxes, all the new spending, all the new subsidies, and all the new market distortions.
My video on Obamacare, for instance, completely focused on how the legislation would expand the burden of government. The mandate is a bad idea, without question, but it’s also a big mistake to impose more spending and taxes whengovernment already is far too big.
I’m worried, though, that the Court will reject the mandate and decide the rest of the law is okay. Not only does this mean we’ll be stuck with bigger government, but it also creates a scenario where politicians – including squeamish Republicans – may decide to enact other bad laws.
John Stossel shares my concerns about what may happen after a Supreme Court decision.
I’m scared. I fear that even if the Supreme Court overrules most of Obamacare (or did already, by the time you read this), Republicans will join Democrats in restoring “good” parts of the law…parts of Obamacare are popular. People like getting what they think is free stuff.
John elaborates, noting that politicians may enact laws that destroy the insurance market.
…discrimination is what makes insurance work. An insurance regime where everyone pays the same amount is called “community rating.” That sounds fair. No more cruel discrimination against the obese or people with cancer. But community rating is as destructive as ordering flood insurance companies to charge me nothing extra to insure my very vulnerable beach house, or ordering car insurance companies to charge Lindsay Lohan no more than they charge you. Such one-size-fits-all rules take away insurance companies’ best tool: risk-based pricing. Risk-based pricing encourages us to take better care of ourselves. Car insurance works because companies reward good drivers and charge the Lindsay Lohans more. If the state forces insurance companies to stop discriminating, that kills the business model. No-discrimination insurance isn’t insurance. It’s welfare. If the politicians’ plan was to create another government welfare program, they ought to own up to that instead of hiding the cost.
And since big business has a dismaying habit of getting into bed with big government, John isn’t expecting the insurance industry to defend markets.
Women go to the doctor more often than men and spend more on medicines. Their lifetime medical costs are much higher, and so it makes all the sense in the world to charge women higher premiums. But Sen. John Kerry pandered, saying, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change!” The industry caved. The president of its trade group, Karen M. Ignagni, said that disparities “should be eliminated.” Caving was safer than fighting the president and Congress, and caving seemed to provide the industry with benefits. Insurance companies wouldn’t have to work as hard. They wouldn’t have to carefully analyze risk. They’d be partners with government — fat and lazy, another sleepy bureaucracy feeding off the welfare state. Alcoholics, drug addicts and the obese won’t have to pay any more than the rest of us. But this just kills off a useful part of insurance: encouraging healthy behavior. Charging heavy drinkers more for insurance gives them one more incentive to quit. “No-discrimination” pricing makes health care costs rise even faster.
I’ve repeatedly written that the only way to fix healthcare is to get rid of thegovernment-created third-party payer problem.
Unfortunately, that will be very difficult precisely because people like the illusion that they don’t pay (even though they do bear the costs in the form of lower take-home wages and higher taxes).
So while I want a full-repeal birthday present from the Supreme Court, that will only provide fleeting happiness unless we solve the third-party payer problemcaused by MedicareMedicaid, tax distortions, and other forms of government intervention.

Dan Mitchell is a Senior Fellow at the Cato Institute. He blogs at International Liberty. His articles are republished here occasionally with his express permission.

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