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The destruction of an industry

By Richard E. Ralston
web posted December 7, 2009

What passes for "reform" in Congress would eliminate health insurance firms. Why? Because, we are told, it is immoral for anyone to make a profit providing health insurance. Virtue, in this view, is restricted to those who impose government insurance on everyone through the force of law.

This reasoning, if successfully implemented, would eventually be applied to the providers of medical care itself. If profit is forbidden for health insurance, it must soon be ruled equally immoral for physicians. Then surely we would no longer be able to allow drug companies to provide a return on investment to their stockholders. Then these standards would have to be applied to manufacturers of diagnostic and other medical equipment.

In this political climate, no one will be allowed to benefit from the creation and sale of medical necessities if someone, somewhere, makes money by providing them.

The root of such ideas is contempt for all private enterprise by those who want the entire economy to be controlled by political elites. Government intrusion in health care is merely the leading edge of omnipotent government ruling every aspect of our daily lives. Political power brokers prefer to force everyone to depend on them for medical care and everything they need.

Congress and the President cannot destroy the property of all stockholders, eliminate the jobs of all of the employees of insurance companies, and cancel the insurance of all of their policyholders with no regard for their rights—except by deception and intrigue. They must therefore call it a "public option." They claim it will provide competition, but Congress and state legislators cannot create competition. They can only eliminate what is left of it with a public option. Instead they should end the state regulations which forbid competition within and between states.

Many supporters of the public option, such as Congressman Barney Frank (D-Mass), have explicitly stated that its purpose is to lead to an exclusively government system. That result is inevitable if government insurance underpays providers as Medicare does and shifts more costs to private insurance, and if the public option is started with a large infusion of taxpayer money, and if private insurance is forced to accept those with prior conditions at premiums lower that their medical expenses, and if insurance companies are forced to cut co-payments and deductibles and absorb the cost, and if they are forced to cover additional mandated treatments, and when they are forced to pay new fees and taxes required by Congress. The public option will then, as Congressman Frank ominously describes it, demonstrate "the strength of its power" and wipe out private insurance.

The disguise may itself be disguised by promising not to "trigger" the public option unless the insurance companies fail to decrease costs while the government is forcing those costs up. Another disguise is that any state can "opt out"—unless one house of their legislature blocks it, or a minority of the other house filibusters it, or the governor vetoes it. (The supporters of this idea know that very well, which is why they don't propose allowing States to opt in.) Government-regulated cooperatives disguised as a "Fanny Med" would be the tool of Congress like the government-supported mortgage companies that created the housing mess. Government sponsored enterprises always turn into political spoils systems.

Those trying to create a public option in Congress are writing legislation for the purpose of destroying private insurance. If a public option is created, it will be administered by those with the goal of destroying private insurance. If there is a trigger mechanism to create a public option, Congress will give the trigger to those who want and intend to pull it.

We must stop this nonsense and get Congress out of the insurance business—and out of all the other businesses they have been seizing lately. ESR

Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine, Newport Beach, California. Copyright © 2009 Americans for Free Choice in Medicine. All rights reserved.


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