Best of the Week
Most Popular
1.Stock Market in DANGER of Strangling the Bears to Death - Nadeem_Walayat
2. Germany Pivoting East, Exit US Dollar, Enter Gold Standard - Jim_Willie_CB
3.Flight MH17 – Kiev Flash Mob's Last False Flag? - Andrew_McKillop
4.Stock Market Crash Nightmare! - Nadeem_Walayat
5.Gold - The Million DOLLAR Question... - Rambus_Chartology
6.Gold And Silver – BRICS And Germany Will Pave The Way - Michael_Noonan
7.The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - Nadeem_Walayat
8.The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - Felicity Arbuthnot
9.Which Way is Inflation Blowing? Watch Commodities - Gary_Dorsch
10.U.S. Economy Quarterly Review and Implications for 2014-2015 - Lacy Hunt
Last 5 days
Mossad in Gaza, Ukraine and the Cult Of The All-Powerful Elite - 28th July 14
Elliott Wave Gold Price Projection Since 1970 - 28th July 14
Investors Remain Uncertain As Stock Fluctuate Near Long-Term Highs - Will The Uptrend Extend? - 28th July 14
The Mass Psychology Of Decline - 28th July 14
Will the US Destroy the World? - Don’t Expect to Live Much Longer - 28th July 14
GDM and GDXJ Gold Stocks In-depth Look - 28th July 14
Stock Market One FINAL High? - 28th July 14
What It Means - Paradigm Collapse And Culture Crisis - 27th July 14
Wall Street Shadow Banking: You Can’t Taper a Ponzi Scheme: “Time to Reboot” - 27th July 14
6 Tips for Picking Winning Gold Mining Stocks - 27th July 14
Israel's War on Children, Exterminating the Palestinians Future - 27th July 14
Guilt By Insinuation - How American Propaganda Works - 26th July 14
Surprise Nuclear Attack On Russia To Liberate Ukraine - 26th July 14
Use "Magic" Of Gold/Silver Ratio To Greatly Increase Your Physical Holdings - 26th July 14
Derivatives Market Species Origins - Abuse, Props and Risks - 26th July 14
Stock Market Manipulation and Technical Analysis - 26th July 14
China’s Stock Market Finally Looks Like A Buy - 26th July 14
Ed Milliband Fears Israel Jewish Fundamentalist Gaza War Massacres Backlash - 26th July 14
The Big Energy = Power Battle Is Coming - 25th July 14
USrael - Zionists in Control of America's Goyim Brainwashed Second Coming Slaves - 25th July 14
More Weakness Ahead for Gold Miners - 25th July 14
Gold Price Strong Season Starts - 25th July 14
Geopolitics and Markets Red Flags Raised by the Fed and the BIS on Risk-taking - 25th July 14
Gold Lockdown Until Options Expiry - New Singapore Gold Contract Threatens Price Manipulation - 25th July 14
The Bond Markets, Black Swans, and the Tiny Spirit of Santo - 25th July 14
No Road Map For Avoiding The Future - 25th July 14
Israeli War Machine Concentrating Women and Children into UN Schools Before Killing Them - C4News - 25th July 14
Israeli Government Paying Jewish Fundamentalist Students to Post Facebook Gaza War Propaganda - 25th July 14
Why the Stock Market Is Heading For A Fall - This Time Is Not Different - 25th July 14
An Economic “Nuclear Strike” on Moscow, A “War of Degrees” - 25th July 14
BBC, Western Media Working for Israeli Agenda of Perpetual War to Steal Arab Land - 25th July 14
Ukraine: What To Do When Economic Growth Is Gone - 24th July 14
Stock Market Clear and Present Danger Zone - 24th July 14
The Five Elements to Creating a Something-for-Nothing Society - 24th July 14
Instability is the New Normal? - 24th July 14
Israel's Suicide Bombers Over Gaza - 24th July 14
EUR-AUD Heads Into The Danger Zone - 24th July 14
Tesco Supermarket Death Spiral Accelerates as Customers HATE the Mega Brand - 24th July 14
Ukraine MH17 Crisis - Best Remember Who Your Friends Are - 24th July 14
Three Reasons Why Gold Price and Gold Stocks Will Rise - 24th July 14
HUI Gold Bugs Fighting To Break Downtrend - 23rd July 14
What Putin Knows About Flight MH17 - 23rd July 14
Why Microsoft Will Continue to Rebound, Huge Upside Potential - 23rd July 14
Will Putin Survive? - 23rd July 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Fed Impact on Stock Market Trend

America, Land of the Poor, Home of the Sick

Politics / US Politics Sep 29, 2011 - 03:08 AM GMT

By: Submissions

Politics

Michael Finger writes: Thanks to a series of destructive government policies and incentives, a health care crisis has been steadily building in America for a generation or two. But the release yesterday of the Kaiser Family Foundation's annual survey reveals that the problem of unaffordable healthcare is becoming epidemic. According to the report, health insurance premiums have jumped nearly 10% in 2011 for the typical family, compared to a 3% increase in 2010. The average annual cost for family health insurance now exceeds $15,000 per year, about 30% of median household income!


At a time when the economy is essentially stagnant and the official inflation figures remain low, what could account for the dramatic price spike? It is no coincidence that the report covers a period of time when many of the provisions of the Obama Administration's Patient Protection and Affordable Care Act (Obamacare) have come into effect. I think we are seeing the initial impact of this law, which the Administration promised would reduce healthcare spending. Oops.

Like all pieces of legislation, Obamacare provided some perverse incentives that explain some of this year's outsized price increases. Starting next year, the new law will impose a system of price controls on health care services. Just like a city worker whose pension is determined by the final year's gross salary, these looming price controls have incentivized providers to boost prices as much as possible before they're "locked in." Since the recession has cut down on doctor and hospital visits, this anticipation, rather than rising costs, appears to be a main driver of price increases.

Once price controls take effect, there will be only one way for these companies to keep up with rising costs and a growing cohort of retirees needing care: cut the quality and quantity of service. As a result, recipients won't be paying more for health insurance, they'll just be getting less. So, to the extent that the insurers can raise prices in anticipation now, they may have to cut less in the future. Perhaps we should be thanking them.

Still, the increases are painful at a time of economic depression. Unfortunately, employers are hit even harder than individuals under Obamacare. For example, employers are now forced to cover the children of employees until they are 26 years old! Including healthy 20-somethings in the comprehensive, low-deductible plans offered to most established corporate employees is sure to drive costs up - even if it's a net benefit to insurers.

Businesses are also mandated to pay for preventive care at no cost to employees. While preventive care can lead to savings in the long-run, it does not necessarily do so. I know someone covered by such a plan who receives a twice weekly massage at no cost. Is this an investment in future health, or an unfortunate loophole in a law Speaker Pelosi said Congressmen should "pass... so [they] can find out what's in it"? Whatever the case may be, it's no longer up to employers and insurers to make these judgments, but rather bureaucrats in Washington.

By increasing federal intervention, Obamacare simply takes us further down the road to ruin. From the post-war tax laws that favored employer-provided insurance, to the Great Society's guarantee of healthcare for all retirees, to the 60 years of increasing regulation of doctors and hospitals, Washington has done everything to drive costs up and quality down.

A good case in point is the Clinton-era Health Insurance Portability and Accountability Act (HIPAA), which put doctors in a regulatory straightjacket. The law created rules about where patient charts must be stored, what type of computer systems doctors can buy, how life-saving research is conducted, and much more. The law also opened up a whole new avenue for patients to sue doctors and hospitals. Some argue that these laws are needed to protect medical privacy, but that is debatable. The point is that such blanket rules have no regard for practicality, cost, or individual circumstances.

Repealing HIPAA, separating insurance from employment, encouraging malpractice reform at the state-level, reducing regulations on hospitals, getting the state out of medical licensing, and reducing taxes for high income earners would all go a long way to driving down medical costs. But rather than improving market conditions, President Obama and his team are trying to force costs down with an iron fist.

Once Obamacare's price controls are in effect, rising inflation and a growing pool of elderly patients will drive the insurance industry to bankruptcy. Washington may then choose to bailout the major insurers and form quasi-governmental agencies, or they may take the opportunity to push for single-payer socialized medicine. By that time, doctors may have acquired all the skill and courtesy of typical DMV employees.

So, don't expect to see a major renaissance in American medicine any time soon. Instead, the future President Obama has created will be poor, sick, and old. Based on the Kaiser Foundation's report, it looks like we're well on our way.

Subscribe to Euro Pacific's Weekly Digest: Receive all commentaries by Peter Schiff and John Browne delivered to your inbox every Monday.

Click here to learn more about Euro Pacific's gold & silver investment options.

Michael Finger
Euro Pacific Capital, Inc.

Michael Finger is Communications Specialist for Euro Pacific Capital, a registered broker/dealer with 6 offices across the country.

Copyright © 2011 Euro Pacific Capital, Inc


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014