Two advisers to the Obama administration during the creation of the law known as ObamaCare exposed in the New York Times on Wednesday one of the predictable consequences of that law: the end of health insurance companies in America.

Authors Ezekiel Emanuel and Jeffrey Liebman then reviewed all the ways that the new “accountable care organizations” will allegedly improve the delivery of healthcare after those greedy, nasty, selfish, profit-seeking insurance companies are out of the way. The article is so filled with misstatements, half-truths, and just plain lies that only a few of the more egregious ones can be addressed here:

Health insurance companies usually…provide insurance; they take a premium and assume financial responsibility for paying the bills. But the amount of risk sharing that is accomplished is limited because the insurance companies charge premiums that vary, depending upon the health of an individual or a group…. [They] use their data and market power to identify healthy people to cover and unhealthy people to exclude from coverage.

Correction: Health insurance companies, in a free and open market, provide insurance by contracting with individuals or groups to provide a service: coverage according to that contract. Premiums are charged according to the best estimate those companies make about what it will cost for them to provide the coverage. They do not “take” premiums by force, but try to

Last Friday’s unemployment numbers, on the surface at least, appeared to reflect a growing, albeit slowly, economy. The number of new unemployment claims for the week ending January 14th dropped to 352,000, down from 402,000 the previous week, and down from 415,000 a year ago. The four-week moving average also dropped, from 382,500 to 379,000.

The December numbers were less than November’s which prompted USA Today to note that this was “an even stronger finish to the year than economists had forecast.” The monthly gain of 212,000 private-sector jobs also reported “means American businesses have replaced more than 3 million of the 4.2 million private-sector jobs lost in the past 13 months,” according to the paper. This “is the strongest recovery since the rebound after the 1990-1992 recession, when U.S. businesses added 4.2 million jobs in the same period of time by late 1993.”

The ebullience of USA Today failed to take note of the Department of Labor’s announcement that, along with the reduction in initial claims there was in increase in the number of people making claims in all unemployment insurance programs, rising by nearly 500,000, an increase from December of 7 percent in a single month.

Economics Professor Robert Higgs was singularly unimpressed. From his analysis of the Department of Labor’s (DOL) numbers dating back to the year 2000 he found that the number employed in the country’s private sector at the end of 2011 was

Continue reading Regime Uncertainty, Regulatory Surge, and Unemployment Numbers

Keep it up everyone!

With the announcement by Kathleen Sebelius, Secretary of Health and Human Services, that Trustmark Life Insurance Company’s recent increases in premiums for their health insurance were “excessive” comes the certain result: A few may be helped, but many will be harmed.

She declared, “It’s time for Trustmark to immediately rescind these rate [increases], issue refunds to consumers or publicly explain their refusal to do so.” Under ObamaCare’s usurpations of prior state law, any premium increases of more than 10 percent are to be reviewed and if determined to be unreasonable, made subject to public exposure and pressure to abide by the agency’s dictates as to what is reasonable.

A spokeswoman for Trustmark, Cindy Gallaher, responded to Sebelius: “We respectfully disagree with the assumptions and conclusions drawn today by the Department of Health and Human Services. Our premiums are driven by the rising cost and increased utilization of medical services.”

Those premium increases affect about 10,000 policyholders in five states, including Alabama where Trustmark has raised its premiums by 27 percent over the last year, Arizona with raises of 18 percent, and Pennsylvania with increases of 15 percent.

At present, Sebelius can only complain publicly about Trustmark’s premium increases, as ObamaCare does not yet contain the power to block those increases. The Obama administration sought such powers but

Continue reading Obamacare, Price Controls, and Theft

On Monday the Family Research Council (FRC) filed a “friend of the court” (amicus curiae) brief with the Supreme Court that makes its case that if the mandate forcing citizens to purchase health insurance or pay a penalty is ruled unconstitutional, then the entire 2,700-page Patient Protection and Affordable Health Care law should be thrown out as well.

The brief, co-authored by two attorneys, Ken Klukowski and Nelson Lund, called the hotly contested mandate the “linchpin” for the entire law and if it fails, the whole massive superstructure fails with it. Klukowski stated:

After almost two years of impassioned debate, Obamacare will finally have its day before the Supreme Court. The “individual mandate” in Obamacare that requires all Americans to have health insurance is unconstitutional. And for the reasons we explain in this brief, 135 years of Supreme Court precedent show that this is one of those rare instances where striking down the individual-mandate provision requires the Court to strike down this entire 2,700-page law.

We have high hopes that the Supreme Court will recognize that the individual mandate is unconstitutional, and will act to safeguard the freedoms of all Americans by holding the individual mandate “nonseverable,” and strike down every part of Obamacare.

There is no “severability” clause in ObamaCare—it was deliberately left out during negotiations between the House and the Senate—which means that if part of the law is deemed unconstitutional,

Continue reading Family Research Council: Individual Mandate Unconstitutional, Thus Whole Law

In the clearest indication yet, a high French government official confirmed last week that an FTT—Financial Transaction Tax—will be implemented by the European Union by the end of 2012, a year earlier than planned. Jean Leonetti, France’s minister for European affairs, said on television that “This is on the program for the next European summit [on January 30th]. Nicolas Sarkozy and Angela Merkel have decided on this and it will be put in place before the end of 2012.”

The tax would be levied, initially at least, on every financial transaction taking place by any entity with a connection to the Eurozone, and would be levied at the rate of 0.1 percent on shares of stock and bonds, and 0.01 percent on all derivatives transactions. It is estimated that the FTT would cover about 85 percent of all transactions between financial institutions such as banks, investment firms, insurance companies, pension funds and hedge funds. It is expected to raise, in the beginning, about $70 billion annually to help fund the EU.

It’s being touted as punishment for the banks that were allegedly instrumental in causing the economic meltdown, but would have no impact on ordinary citizens or small businesses. According to the European Commission, the FTT “would help to reduce competitive distortions in the single market, discourage risky trading activities [such as high frequency trading and highly leveraged derivatives contracts] and complement regulatory measures aimed at avoiding future crises.”

Because of Great Britain’s Prime Minister David Cameron’s resistance and because under the current treaty such imposition requires a

Continue reading The Coming of the Universal Financial Transaction Tax

In her article on Monday, financial journalist Jessica Mortimer said that the euro had just set a new record low against the Japanese yen: Its value is now the lowest it’s been in 10 years. The irony wasn’t lost on her as she also noted that it was just 10 years ago that the euro was first denominated in coins and currency, three years after being introduced electronically among the member states.

And she sees further weakness in the euro, now trading below $1.30 versus the dollar, and likely to move ever lower into the New Year: “In the absence of a comprehensive European policy response to the debt crisis, the euro could test its 2010 low of $1.18.” This would imply at least another nine-percent loss in value in less than a year.

She touched on only one of the few remaining options open to keep the euro from blowing up altogether: more austerity on the backs of the citizens of the member states who took excessive advantage of lower-than-market interest rates to load up on debt that they can’t pay back. She noted the survey that came out over the weekend indicating that a key European manufacturing index remains persistently below recovery levels, with further declines into a full-blown recession in Europe likely. Additional austerity measures would simply hasten that recession. Kathleen Brooks, director of research at FOREX.com, told her clients: “We remain a sell on rallies (with the euro) as we tend to think the eurozone crisis will actually get worse before it gets better.”

That’s one option: Increase the pressure on the taxpayers to

Continue reading Blowing Up the Euro

After asking 501 practicing physicians about the future of health care in the United States, The Deloitte Center for Health Solutions’ conclusions were hardly surprising. Under ObamaCare:

• More people will demand medical care.
• There will be fewer doctors to handle them.
• Those who do will get paid less.
• Those who do will be subject to increasingly onerous regulations.

In its heavy-handed attempt to provide medical coverage to some 34 million Americans, ObamaCare is going to provide it to them for free. But those “free” services are predictably going to increase the demand for medical care while simultaneously reducing the number of doctors available to supply it.

According to the Deloitte study, only one out of four doctors think ObamaCare will reduce healthcare costs, while half of them expect access to such care to be increasingly restricted. Those surveyed think there will be fewer hospitals and fewer physicians. And many of those remaining are likely to seek administrative positions in the healthcare industry rather than continuing to provide hands-on primary care of patients.

Three-quarters think that as primary care doctors get busier, patients needing immediate attention will increasingly be sent to emergency rooms, which is likely to extend waiting times there as well. Four out of five are certain that it will be increasingly difficult for their patients to obtain

Continue reading Don’t Get Sick! ObamaCare Means More Government, Fewer Doctors

Rep. David Reichert (R-Wash.) along with two other House members has asked the Internal Revenue Service to investigate the American Association of Retired Persons (AARP) for acting more like a profit-making insurance company rather than a tax-exempt advocate for senior citizens. The AARP’s close control and micro-marketing management of companies it allows to use its brand amounts to profit-making activity that should be taxable, assert the lawmakers and others. But for years the AARP has largely successfully defended its non-profit status all the while growing into the seventh largest insurance company in the country.

Reichert, a member of the House Ways and Means Committee, told Fox News: “They’re really trying to manage these companies to increase their revenues.” And they have succeeded greatly. During the recession, when many of its members were struggling financially, AARP’s revenues just from its affiliation with United HealthCare alone jumped from $284 million in 2007 to $427 million in 2009 and $670 million in 2010. But because of their tax-exempt status, little of this is subject to income tax.

A tax lawyer favorable to the AARP, Bill Josephson, played innocent before looking into the situation, claiming that the organization was just receiving royalties or passive income, a common tax loophole for non-profits to use to shelter income from the IRS.  He said, “[This] is the classic royalty situation where the Sierra Club [for example] in effect simply makes its mailing lists available to other charities in return for royalty [payments]. I don’t have a problem with that, nor does anybody else.”

But Reichert, in his letter to the IRS, notes a big difference between the Sierra Club and the AARP. The AARP has virtual

Continue reading Congress Asks IRS to Investigate AARP

Last week’s announcement that the auto industry could add as many as 167,000 jobs by 2015 merely confirmed what some economists were saying: that lower wages allow car manufacturers to hire more people more profitably. As part of the agreement between the federal government and the unions in 2007, a lower tier of wages was created in order to halt the hemorrhaging of cash the carmakers were experiencing that led to the bailouts. The unions reluctantly agreed to accept the two-tier system, concluding that a lower-paying job was better than none at all.

Before the agreement, auto workers were making about $29 an hour, plus benefits (health insurance and a pension plan), which brought the total to $50 an hour or more. The onset of the recession pricked that “high wage bubble” which had been hidden prior to the recession. Under the 2007 agreement, entry-level workers were paid $14 to $16 an hour, plus benefits, bringing their total compensation to about $25 an hour. Although those wages affect only about one in every six workers, it was enough to allow Chrysler to turn a profit last quarter of $212 million, potentially setting the stage for its first profitable year since 2005.

At present it takes between 20 and 30 man-hours to produce a new vehicle. Chrysler’s costs are the lowest of the big three automakers, averaging about

Continue reading Two-Tier Wage Pacts Bringing Jobs Back to Detroit