Saturday, September 21, 2013

Obamacare - the Legacy of the 1945 McCarran-Ferguson Act, & Understanding How We Arrived at Obamacare



Nancy Pelosi is a dangerous psychopath who endorses endless wars, America's Nazified Police State, the wholesale shredding of constitutional civil liberties and the government takeover of everything.  But she actually got something right during the Obamacare debate when she proclaimed that the insurance companies were villains, even if for all the wrong reasons.  Pelosi wanted to fully utilize the powers of the Federal government to nationalize America's healthcare system.  Instead, Pelosi and the Dems got the horror known as Obamacare.

Healthcare spending in the US hit $2.6 trillion in 2010 according to the Kaiser Foundation, here, and is estimated to explode to $3.4 trillion by 2015 under Obamacare, here.




On a per person expenditure basis, US healthcare spending soars ahead of other industrialized nations and we in fact spend more than twice the average of other developed countries.






So why is healthcare so expensive in the US? Why do we spend more on healthcare than any other nations and by a wide margin? It all goes back to the 1945 McCarran-Ferguson Act. Health insurance companies lobbied (bribed Congress by filling campaign coffers) to get Congress to pass a health insurance monopoly law.  The health insurance cartel succeeded in banning the sale of health insurance across state lines and further facilitated the power of the healthcare cartel to lobby state legislatures for very costly mandates that drove up the cost of health care.  The healthcare industry just divided up America, banned competition and outlawed choice in healthcare coverage. Healthcare costs started to rise as America was forced by the health insurance industry to pay for healthcare coverage that consumers wouldn't opt to pay for if given a choice.  Until the health insurance cartel flexed its well oiled money muscle power, most consumers of healthcare services just opted to buy major medical coverage and paid for everything else out of pocket.

McCarran-Ferguson birthed the mandate and the mandate was very profitable for health insurance companies who had guaranteed profits that were forcibly extracted from consumers.

The mandates varied from state to state but since most health insurance at the time was paid for by employers, few folks noticed that a nasty and destructive cartel was in the making. The nearly $3 trillion and growing healthcare industry became hugely profitable for healthcare monopolies.  

Not only did the 1945 McCarran-Ferguson Act unleash a medical cartel and the medical insurance industry takeover of US healthcare, it also spawned the rise of Medicare and Medicaid, well known fraud factories.  Big Pharm quickly jumped in to claim its share of government subsidies and health insurance mandates, a situation that simultaneously birth 'America - One Nation Under Big Pharm'.

Republicans never really opposed Obamacare.  In fact the foundation of Obamacare was hatched by the Republicans and the Heritage Foundation, a conservative think tank.

Something for Conservatives to Think About: Obamacare Really Was a Republican Initiative 
Obamacare really was hatched by the Heritage Foundation in the late 1980's, supported by Republicans during the 1990's, tested in Massachusetts by a Republican governor and finally passed as Obamacare. Newt Gingrich got rich promoting the healthcare mandate. Despite campaigning against Obamacare, Gingrich was one of the godfathers of the healthcare mandate. The Nation Review disclosed some of the details of his healthcare mandate business..... Obamacare really was hatched by the Heritage Foundation in the late 1980's, supported by Republicans during the 1990's, tested in Massachusetts by a Republican governor and finally passed as Obamacare. Newt Gingrich got rich promoting the healthcare mandate. Despite campaigning against Obamacare, Gingrich was one of the godfathers of the healthcare mandate. The Nation Review disclosed some of the details of his healthcare mandate business.
Gingrich Health-care Think Tank Raked in $37 Million

A think tank founded by GOP presidential candidate Newt Gingrich collected at least $37 million over the past eight years from major health-care companies and industry groups, offering special access to the former House speaker and other perks, according to records and interviews.
The Center for Health Transformation, which opened in 2003, brought in dues of as much as $200,000 per year from insurers and other health-care firms, offering some of them “access to Newt Gingrich” and “direct Newt interaction,” according to promotional materials. The biggest funders, including firms such as AstraZeneca, Blue Cross Blue Shield and Novo Nordisk, were also eligible to receive discounts on “products and workshops” from other Gingrich groups.
The health center advocated, among other things, requiring that “anyone who earns more than $50,000 a year must purchase health insurance or post a bond,” a type of insurance mandate that has since become anathema to conservatives.
Neither the Republicans or Democrats are willing to touch the issue of mandates because, well, it's a sacred cow and how they get campaign money (bribes) from the health insurance and the healthcare industries.  

McCarran-Ferguson is so bad that even socialist Obamacare supporter Sen. Chuck Schumer (D-NY) attacked it, link here.
By virtue of the McCarran-Ferguson Act, passed by Congress in 1945, the insurance industry is one of only a handful of select industries in the United States, such as Major League Baseball and railroads, to be exempted from federal antitrust laws. Schumer, a co-sponsor of a bill authored by Senate Judiciary Chairman Patrick Leahy (D-VT) to repeal the exemption, said the health insurance industry should lose its special status as part of the landmark health care bill scheduled to reach President Obama’s desk later this year.

“The health insurance’s antitrust exemption is one of the worst accidents of American history. It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable. It is time to end this special status and bring true competition to the health insurance industry,” Schumer said.
Schumer was right about the need to repeal McCarran-Ferguson but for all the wrong reasons.  While Schumer accurately accuses the health insurance industry of driving up premiums, Schumer totally fails to address the mandates that are the defining characteristics of both Obamacare and  McCarran-Ferguson.  If anything, Obamacare is McCarran-Ferguson on steroids.

The health insurance industry had been lobbying Republicans and Democrats in Congress for decades to federalize McCarran-Ferguson.  It's expensive to lobby and bribe the legislatures in all 50 states and the health insurance industry badly wanted to buy Congress, write the mandates and have Congress pass a federal law enforcing the mandates.

However, there was indeed a HUGE problem.  The health insurance villains were acutely aware that federalizing the mandates would significantly drive up the cost of health insurance everywhere.  So they and their Democrat congressional pals constructed a healthcare system that was a complicated maze of subsidies to pay for the mandates; working families earning nearly $100,000 a year were eligible for Obamacare subsidies.  The political class never saw a subsidy it didn't like so long as their campaign coffers were filled and consumers love the idea of getting something for nothing.

But freebies are never really free as Americans are about to learn.

Actually, health insurance exchanges are a good idea providing they are free market exchanges without costly mandates and subsidies.  Neither the government nor the healthcare industry will allow for consumer choice.

But heck, it's America where everybody from old men demanding cost free Viagra and hair transplants to the Sandra Flukes of the world demanding cost free birth control enjoy forcing other people to pay for their acute sense of entitlements including a sex life and vanity.

At the end of the day, it's always about villains and vanity and America has no shortage of either.

Related post: America the Fraud Factory: Medicare Fraud, Medicaid Fraud, Obamacare Fraud, Food Stamp Fraud 

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