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The law of unintended consequences always seems to surprise our lawmakers. Democrats can’t seem to understand that a “public option” for health care insurance will compete unfairly with private insurers, even the non-profit ones like Kaiser and Blue Cross. And the costs of that public plan will exceed all estimates due to swelling enrollment.

Hawai’i’s Keiki Care, intended to cover uninsured children not eligible for Medicaid, was abandoned in late 2008 after enrollment swelled far beyond the estimates. The reason? As KaiserNetwork.org indicated:

According to some state officials, many of the children enrolled in Keiki Care previously had private health insurance, the AP/Herald reports. Kenny Fink, administrator for Med-QUEST at the Hawaii Department of Human Services, said, “People who were already able to afford health care began to stop paying for it so they could get it for free.” He added, “I don’t believe that was the intent of the program” (Niesse, AP/Miami Herald, 10/17).

It isn’t just individuals that will willingly abandon higher cost private health care plans, but employees forced to move to the public option by their companies.

Remember the controversy when large companies like Walmart started filling their ranks with part time employees, thereby avoiding the benefits that flow to full time employees? Public opinion was shocked to find out the companies were providing brochures explaining how the employees could get Medicaid coverage from the government to replace their missing company health plan.

The response from lawmakers has been to try and craft a “play or pay” provision fining companies that eliminate their in-house plans. But the temptation will still be great for a CEO to scuttle the in-house plan for other cost savings … reduced staff in HR, decreased uncertainty about future costs, etc. Because many companies ’self insure’, with the insurance company acting as the plan’s administrator, health care costs represent a variable cost, just one illness away from spiraling out of control. Having a number you can budget for, such as the “play or pay” fine, means good management can just cut back a few more jobs, hire more part time workers, and eliminate the company health plan.

Robert Moffit, director of the Heritage Foundation’s Center for Health Policy Studies, explained the reasons a public plan simply won’t work in testimony before the House Education and Labor Committee:

Moffit dispelled popular belief that a government-run health insurance plan would compete on a level playing field. “There are a lot of ways to improve competition in the health insurance market without the public option. The public option doesn’t solve the current problem of consolidation — in fact, it makes it worse.”

A public option with any special advantages, such as being able to use Medicare payment rates, would reduce the number of private health plans, and thus further consolidate the insurance market, Moffit pointed out to the committee. This would worsen the very problem champions of the public plan in Congress say they want to fix.

To compete fairly, a public plan would have to follow all of the rules and regulations current health insurance plans face, including laws for malpractice tort and contracts. “It should be allowed to compete for business and fail, without artificial bailout from the government” if the public plan loses market share, Moffit said.

Massachusetts’s universal health plan, long discussed as a possible model for the nation, is facing budget crunch pressures. The solution? Eliminate “automatic coverage” for the poor, and eliminate dental coverage. This “limited coverage” rationing is a foreseeable result of any national “public option” plan, as the promised cost savings never materialize. As Democratic Treasurer Timothy P. Cahill told the Boston Globe:

“We’re all still waiting for the savings,’’ Cahill said. “Universal healthcare was supposed to eventually save us money.’’

“It’s a warning for the federal government as it looks to do something similar,’’ he added. “I’m not saying we can’t afford any of it, but it certainly doesn’t appear that we can afford all of it.’’

The public option is another lesson in the law of unintended consequences waiting to be taught. But, unfortunately, its a lesson our legislators are apparently unable to learn.

Frank Business, Politics Keiki Care, MASS Health, public option, Walmart

Note: Green, the color of Islam, has been adopted by the Iranians in their current struggle against their corrupt leaders. I adopt it here in support of their efforts.

Frank Politics

Civilized people would never wish for an early demise of an actual patient, but seeing the unraveling this past week makes me hopeful that Obamacare will die a quick, spectacular death.

The Washington Times reports many of Obama’s initiatives are hitting the cost-reality-speedbump, a sign that the prolifigate spending of the administrations first few weeks is finally catching up with it. Socialized medicine, long one of the top goals of liberals, is being crowded out by the pork-barrel projects of the “stimulus package”. There’s only so much money to go around, even when you’re printing it yourself.

Doug Bandow at Cato puts it succinctly in the lead paragraph of his “Panic Starting to Set In Among Advocates of Government Run Healthcare” article:

Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory. No longer, however. Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money. Indeed, the problem is not that the Treasury is empty. Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.

Lest you be too optimistic, the “unthinkable” is now being discussed … a tax hike on the “middle class” (meaning, everyone). In addition to the idea of a VAT tax being floated, raising existing income tax rates is now being considered by some on the left. As quoted in the Heritage Foundation’s The Foundry Blog article “The Coming Obama Tax Explosion“, the influential Center for American Progress senior editor is calling for an extra annual tax of $500 per person to raise “almost 150 billion”.

How that would pay for a program conservatively estimated to cost a trillion dollars is beyond me, but that’s hardly the point. In the shallow halls of Washington, DC, the larger the number the easier it is to forget just how much money it really is. If a trillion dollars is really not that much to the Congresscritters, how, they may ask, can a middle class family of four really miss a mere $2,000?

An attempt to increase taxes, across the board and not just on the “filthy rich”, is coming. I hope it is in time for the mid-term elections, so the American people can once again assert their desire for liberty, including the engine of all liberty, economic freedom.

When it comes to the Obamacare proposals, a quick death would be best. But even a slow, lingering and difficult demise would be OK with me. As long as it dies.

Frank Politics

Scheduled for a vote on June 18, the Clean Water Restoration Act, S.787, will expand the scope and reach of the government’s efforts to deny property rights to Americans.

The “original” Clean Water Act from 1972, originally intended only for navigable waterways, grew like a cancerous tumor, impinging on the property rights of farmers, ranchers and other land owners with creeks and ponds on their property. The ever-expanding reach of the faceless bureaucrats included even dry land that had the potential to be wet.

Two Supreme Court decisions reigned in the Act’s reach in the absence of an intelligent response from Congress. The decisions, Solid Waste Agency of Northern Cook County v. United States in 2001, and Rapanos v. United States in 2006, went a long way toward restoring some semblance of intelligence to the disastrous 1972 law.

Now, the resurgent Democratic Congress is on the attack. As the Heritage Foundation’s The Foundry Blog notes:

Now, the CWRA seeks to overturn these Supreme Court decisions and make the statute more expansive than ever. In fact, it would turn the Clean Water Act into what some analysts believe to be the most dangerous federal intrusion on private property rights in existence. First, it seeks to remove the limitation that the statute only apply to navigable waters and apply it to all waters of the United States. Then it seeks to broadly define such waters as not just “all waters subject to the ebb and flow of the tide, the territorial seas, and all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams),” but also “mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds….” Yes, prairie potholes. Note also that the CWRA makes clear that intrastate as well as interstate waters are the purview of the feds.

Federal regulators will reach into the fields and backyards of every inch of American soil looking for moist areas to restrict use of the land, a virtual seizure without taking actual possession. This is akin to the eminent domain controversies of the past few years, but with a painful twist: the property owner still has to pay to maintain the property.

Frank Politics

AutoBlog Green reports on a real world test for the Prius with an after-market modification to make it a plug-in hybrid:

The lab drove two groups of Prius test vehicles (one 40-car fleet and another 75-car fleet) from early 2008 until March 2009 for almost 500,000 miles and found that the average fuel economy tallied 46 and 49 mpg, respectively. As you might expect, driving style and the battery mode (charge sustaining vs. charge depeleting) had a big impact on the figures.

Hymotion’s retrofit of the Prius was evaluated by Consumer Reports as AutoBlog Green reported ealier.

As a reference, I get real-world mileage of 54.1 MPG over the last 10 tankfuls by driving the speed limit … most of the time … in my daily 90 mile round trip commute up the California coast. I do not “hypermile” or invoke other tricks; I drive the Prius just like I do my Ford Sporttrac truck.

Hymotion’s kit is reported to cost $11,000, a sum indicating the high cost of electric storage for cars. The added cost of extra batteries, as well as the extra weight the batteries impose, make it a poor choice for an alternative to fossil fuels.

In the meantime, existing hybrid technology for small cars, where weight of the battery pack can be kept in line, is the only reasonable interim solution to squeezing out every mile you can from a gallon of gas.

Frank Climate, Science, Tech