Tuesday, September 22, 2009

Health Insurance, the Public Option, and Free Markets

Since I've had this discussion on several occasions, and since it seems to be what everyone is now talking about, I thought I would comment on it here.

As I've expressed before, I support the insertion of free market principles into our health care system as much as possible, in opposition to socialized medicine, which I feel will be inefficient and lead to inferior quality. At the same time, I support the "Public Option" as a lesser solution—in other words the ability to buy the equivalent of a Medicare policy. It has largely been dismissed now from serious congressional consideration under pressure of the health insurance lobby. The reason cited is that insurance companies couldn't fairly compete against it, and so it opposes market principles.

There are (at least) two reasons why the free market does not apply to our current private health insurance system:

1. Under current statutes, Americans are coerced to buy private health insurance. This is not free market. In my case, I'm 40, my previous employer paid $500/mo., for which I had a Kaiser plan and used almost none of it except for three doctors visits for a specific condition which was mostly successfully treated. Now I did have the option to refuse any plan, but I could not have said to my employer: "I want to insure myself: please give me the $500/mo. instead." Without that option, free market principles do not apply.

2. Private insurance gets huge indirect government subsidies in the form of Medicare. Medicare is given to all Americans over 65, and all Americans with permanent disabilities. This amounts to cost-shifting health insurance onto government once people become unprofitable: either they cannot afford premiums, or they get to an age where they become statistically more likely to develop expensive conditions to treat. There was a time when healthy people were charged high premiums to offset costs for the unhealthy. Those days ended with Medicare. Now healthy people are merely gouged for high premiums, and the tax base handles the vast majority of the truly sick in this nation.

Since Medicare is capable of treating the truly sick, and for the most part they get good care under Medicare, with minor adjustments it should be able to oversee the healthy majority of Americans as well, particularly if they collect premiums in line with what health insurance companies are charging.

This talk about free markets is simply the fact that Health Insurance companies have found and unbeatable racket to extort the American public and don't want to lose it.

Saturday, September 19, 2009

Oh What is a Bear to Do?

I'm posting today simply to say I still consider this a fully active blog and it is still my intention to post approximately twice per week regarding economic events that could influence the value of the dollar, and any other thoughts on the subject that cross my mind.

It is just that news regarding bailout activity has been distinctly inactive—real factual news as opposed to commentary or speculation which is abundant—and replaced by hot air around health care reform. With nearly a trillion dollars of taxpayer money being put on the table and up for grabs, naturally, those who stand to profit from the pending health care legislation have cranked up lobbying and media efforts such that events unfold in their favor.

New economic bailout activity may have slowed down, but bailout activity already in the works is in full swing. Since the last two major bailout events--the TARP and Obama stimulus—were followed by precipitous market declines, it may be policy makers now are bending over backward not to upset this house of cards.

What happens from here? Is this the beginning of the recovery, or is this an overstretched rebound? If it is a recovery, it is a tepid an incomplete one. There is still significant unemployment and the mortgage situation is still in the toilet and will get worse as the under-reported Alt-A market continues with their adjustments until 2012.

But for those who think good times are here again, I guess all I can really do is use such a time to take a little break.

As the stock market grows, the dollar falters. Neither is back to the 2007 highs for the DJIA or 2008 lows for the dollar.