Insurance Cartel Making RECORD Profit. WHY More Illegal Bailouts?

Insurance Cartel Making RECORD Profit. WHY More Illegal Bailouts?

The medical insurance industry subsists on more government favors than any other industry. Between the requirement to purchase insurance, the requirement that companies offer the insurance industry’s product, and the $275 billion tax exemption to offer their product (four times the size of mortgage interest deductions!), the insurance cartel is essentially a government-sponsored entity or public utility. It has done nothing for society, but has destroyed the patient-doctor relationship, prevented medical innovation, and raised costs astronomically.

Now that same medical insurance industry is asking for a bailout.

The answer must be a resounding “No!”

Last week, the top six health insurance companies (UnitedHealth Group, Anthem, Aetna, Cigna, Humana, and Centene) reported $6 billion in combined adjusted profits for the second quarter of this year. According to CNBC, that’s up “29 percent from the same quarter a year ago — far outpacing the overall S&P 500 health care sector’s growth of 8.5 percent for the quarter, according to Thomson Reuters I/B/E/S data.”

As an unapologetic capitalist, I have no problem with the earning of record profits built off of free markets, innovation, and competition. Nobody begrudges the success of Apple and Amazon. But in medical insurance, prices are at a record high and the quality of the actual care is in the toilet — all thanks to venture socialism, not free markets. To quote Barack Obama and Elizabeth Warren, “You didn’t build that.”

What is the source of their profit? You got it: taxpayers and public debt!

“The core business, which is providing coverage to large and mid-sized employers… and the established government programs, Medicare Advantage and Medicaid managed care, have all done well.”

Many people forget that most of Medicare and Medicaid are not purely “public.” These programs are managed by “private” companies that line their pockets with unconstitutional government interventions and then use their rent-seeking status in the market to demand more subsidies lest they threaten higher prices. As CNBC explains:

Aetna now derives more than half of its revenue from government plans, and after abandoning its merger deal with Humana, the insurer is focused on growing its Medicare Advantage market share on its own in 2018 and 2019.

“The general trend is growing the portion of health care claims that are directly or indirectly paid by the federal government,” said health care ratings analyst Deep Banerjee, a director at S&P Global Ratings.

This is the literal meaning of venture socialism, when private companies earn their entire market share based on government capital, leaving the consumer in the lurch. They no longer need to compete for consumer satisfaction when government is the true consumer.

And let’s not forget the ill-conceived concept of employer-sponsored medical insurance, driven by $275 billion tax pork. Yes, $275 billion worth of lost wages — doing nothing but lining the pockets of the insurance cartel.

Imagine what would happen if the government mandated that everyone not only own a firearm, but purchase a specific type of firearm produced only by a few companies. Then employers would be required to purchase them for employees, and they’d get a collective $275 billion tax cut for doing so. In addition, the entire personal security for all the elderly and poor would be managed by those companies and their services, through $1.6 trillion in combined federal and state spending! They’d be pretty darn wealthy and have all the power in the world to lobby for endless subsidies. That, in a nutshell, is the exact situation in our critically ill health care system.

In addition, these same companies had the nerve to lobby for the insolvent Obamacare regulations and vociferously blocked any effort to repeal them. They are willing to go along with the regulations because 1) They keep new competitors from entering the market; 2) They have a vested interest in keeping the price of health care and insurance high; 3) They have a guaranteed flow of government subsidies to some consumers, states, and insurers to sugar-coat their price inflation; and 4) Unlike any other industry, they get to engage in price fixing — all enabled and sponsored by government tilting the playing field away from direct primary care and toward the insurance cartel.

In many respects, our system of venture socialism is worse than single-payer, because it combines socialism with the greed of capitalism. However, unlike capitalism, in venture socialism, government shields the private entities from market forces. It guarantees them an endless flow of public funds, consumer mandates, and regulatory favors (no anti-trust laws, but onerous coverage burdens to keep out new competitors) to remove any need to innovate and compete. Health care ratings analyst Deep Banerjee, as reported by CNBC, put it best:

“Even with a single payer in a public-private partnership, insurance companies are very involved in managing the costs, and actually running the program for the state or the federal government.”

The government has essentially handed the entire medical care field to the insurance and Big Health Care administration cartels. They would have never amassed their monopoly without government favors at every turn.

That is why the worst thing we can do is give into their tantrums and offer them more cost-sharing subsidies. We must move in the opposite direction entirely: Cut out insurance altogether from any special government favors and make insurance companies compete in the market like any other industry.

Even without fully or partially repealing Obamacare, there are a number of ways we can repair health care in this country and sever the stranglehold of the government-sponsored cartel on our health. We must place direct primary care and alternatives to insurance on an equal playing field. President Trump should explore the following reforms and put the insurance cartel on notice that he will no longer treat them as wards of the state:

Allow health-sharing associations to prosper and compete with insurance as a fully viable alternative. This model has proven extremely successful with health-sharing ministries. All we need to do is expand Section 5000A(d) of the ACA and exempt all new associations and non-religious sharing associations from the individual mandate penalty. Additionally, they should be afforded equal tax treatment through HSAs and the employer tax exclusion. This must be a centerpiece of any tax reform proposal. Watch the insurance cartel be forced to compete or die. (For more details, listen to podcast 130.)

Marshal true market forces by encouraging price transparency and ending price fixing. The reason health care is so expensive is because the insurance cartel is allowed to price-fix. Given that more than half of their revenue is from government and the other half is indirectly sponsored by government, there is no reason Congress could not prohibit any insurance contracts that inhibit providers from offering self-pay discounts to patients. Under current practice, given that the Medicaid and Medicare contracts are funneled through the insurance cartel, insurers prevent providers from offering discounts to those who self-pay. It is fundamentally unfair for the government programs to hurt private citizens who want to shop around like a regular market. Ending the price fixing would naturally lead to price transparency, which is the lynchpin of reducing charges and fostering competition. (For more details, listen to podcast 135.)

Cut out the cartel entirely from Medicaid and give the money directly to poor consumers in the form of regulated HSA accounts. This way we could provide them with better quality, more choices, and less stigma — all without self-perpetuating a death spiral of eye-popping debt and price increases that destroy the market for everyone else.

By enacting these true health care reforms, much of the debate over Obamacare and the repeal of Obamacare will become moot. We only have a health care problem because the federal government has elevated the insurance cartel to a status it would never have attained on its own. The Freedom Caucus should demand real health care reform in return for any debt ceiling increase, because the government focus on lining the pockets of the insurance cartel is the biggest driver of personal and national debt. Let’s level the playing field and see if a true free market would actually sustain the insurance companies’ Solyndra-style business model. (For more from the author of “Insurance Cartel Making RECORD Profit. WHY More Illegal Bailouts?” please click HERE)

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Schumer Refusing To Help Border Kids
Wants To Hurt Trump Instead

The controversy over how underage illegal aliens are handled at the border is heating up — but Democrat Senator Chuck Schumer just rejected a good-faith proposal to fix the problem.

A growing number of people on both sides of the political aisle have expressed concern for border separations, which occur when migrants are caught breaking the law along the border while they have children with them, or when the often exploitative relationship between adults and minors at the border cannot be established.

A vast amount of mis-information and outright lying about the situation has muddied the water, making it tough to understand the situation in its entirety.

Both liberals and conservatives, however, have voiced their support for a better system that results in fewer family separations, and even President Donald Trump has indicated that he is willing to stand with Congress if they change the law.

Shockingly, however, it looks like one of the most well-known faces of the Democratic party isn’t willing to take action, and is instead playing politics in order to attack Trump.

On Tuesday, Schumer openly rejected a Republican proposal to fix the immigrant separation problem at the legislative level, and instead whined about the president.

“There are so many obstacles to legislation and when the president can do it with his own pen, it makes no sense,” Schumer stated, according to The Hill.

“Legislation is not the way to go here when it’s so easy for the president to sign it,” he complained.

Democrats Reject Bill To Keep Families Together At Border – Schumer Says He “Wants To Keep Focus On Trump”

Think about that for a second: The president’s job is to execute existing laws. The legislature’s job is to change or enact new laws when needed.

A senator elected to the legislature for exactly that purpose is now refusing to do his job and pass legislation, while simultaneously blaming the president for enforcing the existing laws, as he is sworn to do.

If there was any doubt that Schumer and the Democrats are playing politics instead of trying to actually help migrant families, the senator made his intentions clear: Obstruct and point fingers at Trump.

“Asked if that meant Democrats would not support a bill backed by Senate Majority Leader Mitch McConnell (R-Ky.) to keep immigrant families together while seeking asylum on the U.S. border, Schumer said they want to keep the focus on Trump,” The Hill explained.

Make no mistake: The Democrats dragging their feet and refusing to back legislation already drafted by Republicans will prolong the problems at the border.

“Schumer’s opposition to a legislative fix means there likely won’t be a quick end to the emotional images of immigrant children being separated from their families unless Trump backs down,” The Hill reported.

“Democrats want to keep the pressure on Trump instead of having Congress assume responsibility for the growing crisis,” the news outlet continued.

Again: There’s a solution ready to go, with Republicans including Senate Majority Leader Mitch McConnell ready to support it. Yet Democrats like Schumer apparently believe that scoring political points against Trump is more important than helping broken families on the border, even as their own liberal voters demand action.

“Congress alone can fix it,” stated Homeland Security Secretary Kirstjen Nielsen on Monday.

“I support, and all of the senators of the Republican conference support, a plan that keeps families together,” McConnell agreed.

“We need to fix the problem and it requires a legislative solution,” he said.

Yet Democrats refuse to budge.

This “do nothing but blame Trump” response from the left should prove beyond a doubt that all the tears and hand-wringing from liberals are disingenuous. They’re for show. If it was truly about helping innocent kids at the border, Schumer and his fellow Democrats could act right now.

If their priority was actually to solve the problem and help broken families, scoring points against Trump shouldn’t even be a concern. Even if they believed he was being stubborn on the issue, they could take the high road by doing their jobs and supporting bipartisan legislation.

They don’t, because solving the problem was never their goal. They are playing political games and using devastated children as pawns, while pretending that the president is the monster.

That’s sick… and the American people need to see exactly who is doing the obstruction.


Washington Post Compares
Jeff Sessions To Slaveholder’

The Washington Post compared Attorney General Jeff Sessions to “slaveholders” after he quoted the Bible on Thursday while discussing his department’s policy of prosecuting all illegal immigrants who cross the border.

Sessions made the statement during a speech to law enforcement officers in Fort Wayne, Indiana.

WaPo ran a story entitled “Sessions cites Bible passage used to defend slavery in defense of separating immigrant families” by general assignment editor Keith McMillan and religion reporter Julie Zauzmer on Friday.

Rather than detailing the statistics Sessions cited in the speech that explain the immigration policy, the story quoted John Fea, a history professor at Messiah College in Pennsylvania.

“This is the same argument that Southern slaveholders and the advocates of a Southern way of life made,” Fea said.

Sessions spent much of the speech discussing the numbers behind current immigration policy, including separating families at the Southwest border.

“I would cite you to the Apostle Paul and his clear and wise command in Romans 13, to obey the laws of the government because God has ordained the government for his purposes,” Sessions said.

“Orderly and lawful processes are good in themselves. Consistent and fair application of the law is in itself a good and moral thing, and that protects the weak and protects the lawful.”

“The previous administration wouldn’t prosecute aliens if they came with children,” Sessions said.

“It was de-facto open borders if you came with children. The results were unsurprising. More and more illegal aliens started showing up at the border with children.”

Sessions laid out the numbers in the speech.

“In 2013, fewer than 15,000 family units were apprehended crossing our border illegally between ports of entry in dangerous areas of the country,” he said.

“Five years later, it was more than 75,000, a five-fold increase in five years. It didn’t even have to be their child that was brought, it could be anyone. You can imagine that this created a lot of danger.”

The U.S. has the “opportunity” to fix its broken immigration system now, Sessions said.

“I believe that’s it’s moral, right, just and decent that we have a lawful system of immigration,” he said. “The American people have been asking for it.”

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