Thursday, September 9, 2010

Obamacare Blowback

*Image taken from

*This article is also a reaction to the linked yahoo news article

This illustration indicates the rate increase attributable to Obamacare. However, we must not forget that rate increases not specifically attributable to Obamacare are the result of government hyper-regulation nonetheless.

First time I saw this article I told myself 'What do you expect!?!'. No rational and decent person would want to participate in a corrupt welfare scheme, which is really what this is, it has nothing to do with insurance. In fact, government has completely destroyed the idea of health insurance long before Obamacare was enacted. There can only be insurance where insurance companies can create groupings and sub-groupings of classes. In order to do this, they have to --- wait for it --- discriminate! Suppose insurance company X has a number of professional boxers and economists as clients. They would of course have to segregate the two groups. The professional boxer has to pay a higher insurance premium because his risk of injury is much higher than that of the economist, more importantly, he has to be pooled together with other boxers while the economist has to be pooled together with other economists. Putting the two groups in one pool will amount to a redistribution scheme as the economist has to pay a higher premium, subsidizing the boxers he is being pooled with.

A rule of thumb when it comes to insurance is that events under the control of individuals are not insurable. There is really no such thing as car insurance since the physical condition of a car falls under the responsibility of its owner. No insurance company would offer car insurance since they will incur losses because of clients taking advantage of car insurance. This rule is also the reason why so -called government 'unemployment insurance' creates more unemployment. The government has created, in the realm of health care, a scheme similar to having insurance on the loss of sales ---- it is that ludicrous!

Here are a few actual examples of what modern health insurance in America is like:

- insurance coverage for alcoholism
- insurance coverage for drug addiction
- insurance coverage for psychological problems
- insurance coverage for body transplants (liver and heart)
- insurance coverage for hair loss
- allocation of funds to sperm banking
- allocation of funds to social workers
- insurance companies cannot ask what lifestyle people lead
- no genetic tests

It is obvious that health care insurance in the United States even before Obamacare is really just a fraudulent redistribution scheme creating perverse incentives that will make a population less healthy and more degenerate. It is therefore no surprise why so many Americans do not have health insurance for the simple reason that they did not want to pay high premiums to subsidize sickness, recklessness and degeneracy and in the process creating more of such. It is proven that the main reason for Americans being 'uninsured' is this voluntary refusal. About one third of the 'uninsured' in America are illegal immigrants, who do not have the means to pay for hyper-regulated health coverage owing their poor beginnings.

Obamacare further destroys application of sound actuarial science and economic calculation by expanding the problems stated above. Unfortunately, the blowback from government intervention will only cause a ratchet effect, inducing more government intervention and controls in the health care industry.

Whereas it is cheaper and more rational for a person to just pay the penalty in the current version of Obamacare, I have a feeling that the US administration will try to abolish this option and create a full socialist health care system in the future.

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