A Pre-Existing Condition of Government Intervention

When discussing health care, or hearing about it in the news, you are sure to come across the subject of “pre-existing conditions.” The Left rails against insurance companies for “discriminating” against potential clients because of their pre-existing conditions.

So what is a pre-existing condition? Let’s examine the phrase. Taking the last part first, it’s a medical condition, like diabetes, or asthma, or cancer, or any of a number of other maladies, that a patient needs to continue to treat because of its persistence. But what does the “pre-existing” part mean? That needs a little more explanation I think. What event took place that this condition existed before?

To the leftist politician, defining that part doesn’t matter. All they want you to believe is that insurance companies are unfairly withholding their service from innocent people. To them “pre-existing” only means the patient’s condition pre-existed their current search for coverage.

But this event, that makes the pre-existing modifier possible, is very important in understanding the mess the insurance industry is in. This event always has to do with someone’s job situation. It could be an employer changing providers, or it could be an employee switching jobs or losing a job altogether.

You see, the government has been meddling with the insurance industry for a while and in many ways. For this discussion though, we only need to look at the tax benefit given to employers for purchasing coverage for their employees. This is a leftover from WWII price and wage controls where employers weren’t allowed to offer bigger salaries to attract workers. Instead, America’s resourceful companies offered more benefits to employees that they wanted. Eventually big tax benefits were attached to these benefits when offered by an employer, while individuals searching for insurance on their own couldn’t get the same benefits. So now it’s much cheaper to get your insurance through your employer than it is to get it on your own. This system has essentially killed the market for individually purchased insurance.

You might think this is a nice way to save a buck, but rather it has caused the situation we now have. It’s what we call “unintended consequences.” Because your insurance is attached to your job, you make employment decisions based on that insurance, instead of making employment decisions based solely on the employment situation. This is especially true if you have a pre-existing condition.

For example, let’s say you’ve had a decent job for a few years, and recently developed a medical condition (it’s not “pre-existing” yet!). You’ve had the same insurance at this job for a while and since your condition arose while under your current policy, your treatment is covered. But another company has seen your work and they are impressed enough to offer you a 15% raise along with a new title and bigger responsibilities. And your current company can’t match the offer. Without our government’s interference, this would be a no-brainer; you would take the new job, the new salary, and be excited about advancing your career. But as you see, government controls are affecting your decision. The new company’s insurance isn’t that great. You’ll have to pay a lot more for your treatments. Maybe they won’t cover it at all. What do you do? Do your own thought experiments for losing a job, or for having a child with a condition that grows up and has to leave your family’s coverage, and you’ll find similar government created predicaments.

And of course, this mess is driving up costs. People end up switching insurance companies more often than they would without government interference, especially today when we switch jobs more than people did a generation before. Every new policy creates more paperwork, and paperwork costs money. For an example of this waste, I didn’t have to look too far. I switched jobs recently. My new gig has the same insurance that the last one did, but still I had to get a new policy and I had the pleasure of filling out the same exciting paperwork. How ridiculous is that? I didn’t have to change my auto or home insurance because I took a new job.

Back to my main point though. The only reason we are familiar with the term “pre-existing condition” is because of government intervention in the economy. Incentivizing employer based insurance has created the problem and pushed the term onto the stage. If the government got out of the way, the problem, and the term, would practically disappear. And it only takes an ounce of economic imagination to see why.

Using the example from above, you would have shopped for your own insurance separately from your job (just like car insurance, life insurance, home insurance, boat insurance, or other non-insurance things like groceries), and when offered that new position at a different company you’d happily accept it, keeping your current insurance in tact. What if you lost your job and couldn’t pay your insurance? Well, insurance companies would be free to offer job-loss insurance for a higher premium. Maybe an extra $20 a month would cover you if you were out of work for a couple years (isn’t this what Aflac does?).

But what about the child that has grown too old to stay on his families insurance? After all, they’re not switching jobs? Well, I think the insurance companies would have this figured out as well. I actually think they would be banging on the delivery room door with offers for lifelong policies. Instead of being on your parent’s employer’s plan as a child, your parents might put you on your own plan that you can keep with you and pay for when you come of age. Under the current system, they’re not banging on anybody’s doors. They don’t have to. They don’t have to compete for our business.

Of course our government doesn’t understand this. They rarely take the time to understand the cause of a problem, especially when that cause is staring back at them in the mirror. Instead, they think of new laws, penalties, and subsidies (funded by ours truly) adding gasoline to the fire. Unintended consequences like this are pre-existing conditions of government intervention.

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(Not this) McDonald v. Chicago

The right to protect yourself and your property is unalienable. I’m proud to share a belief in this right, as well as a surname, with one of the plaintiffs in today’s case before the Supreme Court, McDonald v. Chicago, which could render unconstitutional Chicago’s handgun ban. Beyond being the correct decision on an individual rights perspective, this would have immediate and long-term effects on crime.

It looks like it will be easier to use the due-process route, rather than the privileges and immunities option, to get the court to incorporate Second Amendment rights to state and local governments. The latter approach could have the added benefit of expanding economic liberty, but I’ll take whichever one that works.

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New York Times: To Hell with Free Speech

Congress shall make no law … abridging the freedom of speech.

As a reaction to the recent supreme court decision, Citizens United v. Federal Election Commission, the New York Times has a truly execrable piece where they twist and/or ignore the meaning of an individual’s right to free speech.

With a single, disastrous 5-to-4 ruling, the Supreme Court has thrust politics back to the robber-baron era of the 19th century. Disingenuously waving the flag of the First Amendment, the court’s conservative majority has paved the way for corporations to use their vast treasuries to overwhelm elections and intimidate elected officials into doing their bidding.

First, note the choice of the word “intimidate.” Will these corporations threaten the safety of an elected official’s family? Will they hang the official over a 5 story balcony until he promises to vote their way? No. Intimidation here means a corporation will suspend funding and give it to another candidate that shares their views. I’m shaking in my boots from the intimidation.

McDonald’s doesn’t “intimidate” you into buying a Big Mac. They advertise to persuade you. It’s the government that has a monopoly on intimidation. Corporations only have economic power, i.e. the power to persuade, while governments have political power, i.e. the legal right to use force.

And “dangerously waving the flag of the First Amendment?” What is dangerous about demanding and protecting free speech?

Congress must act immediately to limit the damage of this radical decision, which strikes at the heart of democracy.

The heart of our democracy constitutional republic is individual rights, including the right to free speech. This decision protects that heart. At the inception of our country, the discovery and protection of individual rights was a radical idea, but after a couple hundred years I’m quite used to it.

As a result of Thursday’s ruling, corporations have been unleashed from the longstanding ban against their spending directly on political campaigns and will be free to spend as much money as they want to elect and defeat candidates. If a member of Congress tries to stand up to a wealthy special interest, its lobbyists can credibly threaten: We’ll spend whatever it takes to defeat you.

Another scary word; threaten. This is some serious intimidation. There’s nothing wrong with ”spending whatever it takes to defeat” someone. This is a right and option that earned economic power gives you. Compare “we’ll spend whatever it takes to defeat you” to the government’s use of political power when they say “we’ll fine you and/or put you in jail if you say what you think.” The latter is a real, and current threat.

The ruling in Citizens United v. Federal Election Commission radically reverses well-established law and erodes a wall that has stood for a century between corporations and electoral politics. (The ruling also frees up labor unions to spend, though they have far less money at their disposal.)

The founders of this nation warned about the dangers of corporate influence. The Constitution they wrote mentions many things and assigns them rights and protections — the people, militias, the press, religions. But it does not mention corporations.

And here’s where we see their complete misunderstanding of individual rights. Militias don’t have rights. The press doesn’t have rights. Religions don’t have rights. Corporations don’t have rights. And “the people” don’t even have rights. Only individuals, and every individual, have rights. So individuals have the right to form a militia. Individuals in the press have the right to say they want in papers, on tv, and online. Individuals have the right to practice their religious beliefs, so long as they don’t infringe on other individuals. And thus, individuals have the right to create contracts with each other that form corporations. And those individuals have the right to decide what the corporation sells, where the corporation operates, what the corporation says, and how much the corporation spends to say it.

It’s a common tactic to paint the corporation as an evil entity, with evil intentions (i.e. profit), that makes evil decisions. But a corporation isn’t an entity capable of making decisions, therefore, it is an amoral entity. Only the individuals that are a part of the company are capable of making decisions. So making people believe a business is evil that needs to be held in check is how they get away with denying the rights of those that own and run it.

In 1907, as corporations reached new heights of wealth and power, Congress made its views of the relationship between corporations and campaigning clear: It banned them from contributing to candidates. At midcentury, it enacted the broader ban on spending that was repeatedly reaffirmed over the decades until it was struck down on Thursday.

Congress made it’s view clear, and now the SCOTUS is saying that view is unconstitutional.

This issue should never have been before the court. The justices overreached and seized on a case involving a narrower, technical question involving the broadcast of a movie that attacked Hillary Rodham Clinton during the 2008 campaign. The court elevated that case to a forum for striking down the entire ban on corporate spending and then rushed the process of hearing the case at breakneck speed. It gave lawyers a month to prepare briefs on an issue of enormous complexity, and it scheduled arguments during its vacation.

Are they really complaining about having only a month to prepare? Please. They’ve been making the case for 103 years.

Chief Justice John Roberts Jr., no doubt aware of how sharply these actions clash with his confirmation-time vow to be judicially modest and simply “call balls and strikes,” wrote a separate opinion trying to excuse the shameless judicial overreaching.

An indivdual’s right to free speech is pretty clear cut; Congress shall make no law. This isn’t as hard as calling balls and strikes. It’s more like judging whether the ball went through the hoop. It’s an easy call.

The majority is deeply wrong on the law. Most wrongheaded of all is its insistence that corporations are just like people and entitled to the same First Amendment rights. It is an odd claim since companies are creations of the state that exist to make money. They are given special privileges, including different tax rates, to do just that. It was a fundamental misreading of the Constitution to say that these artificial legal constructs have the same right to spend money on politics as ordinary Americans have to speak out in support of a candidate.

No, it’s not that corporations are just like people, it’s that THEY ARE PEOPLE. They are associations of individuals who retain their rights when they form these business entities. And corporations aren’t creations of the state. They are creations of individuals that exist to do whatever those individuals decide it should to do.

The majority also makes the nonsensical claim that, unlike campaign contributions, which are still prohibited, independent expenditures by corporations “do not give rise to corruption or the appearance of corruption.” If Wall Street bankers told members of Congress that they would spend millions of dollars to defeat anyone who opposed their bailout, and then did so, it would certainly look corrupt.

Campaign contributions should be unlimited too. But let’s touch on this idea of corruption. Only in our mess of a mixed economy, where government has its tentacles in every imaginable place, is corruption like this possible. So yes, the Wall Street example would look bad, but only because the government has the power to steal from individuals for a bailout. The government’s intervention in the market, with its ability to choose winners and losers, is what creates the corruption. When you make the intervention illegal, the Wall Street example falls to bits. Money doesn’t corrupt politics, politics corrupts money.

After the court heard the case, Senator John McCain told reporters that he was troubled by the “extreme naïveté” some of the justices showed about the role of special-interest money in Congressional lawmaking.

In dissent, Justice John Paul Stevens warned that the ruling not only threatens democracy but “will, I fear, do damage to this institution.” History is, indeed, likely to look harshly not only on the decision but the court that delivered it. The Citizens United ruling is likely to be viewed as a shameful bookend to Bush v. Gore. With one 5-to-4 decision, the court’s conservative majority stopped valid votes from being counted to ensure the election of a conservative president. Now a similar conservative majority has distorted the political system to ensure that Republican candidates will be at an enormous advantage in future elections.

In case you missed their true colors, there they are laid bare. They want to suspend the First Amendment for those that would vote against them. Rather than trying to win the battle of ideas, they are happy to resort to using political force to shut those ideas down. And let’s not forget who, with a very short term outlook, broke his promise and turned his (and his party’s) back on publicly financed campaigns, thus opening the door for greater private influence in elections.

Congress and members of the public who care about fair elections and clean government need to mobilize right away, a cause President Obama has said he would join. Congress should repair the presidential public finance system and create another one for Congressional elections to help ordinary Americans contribute to campaigns. It should also enact a law requiring publicly traded corporations to get the approval of their shareholders before spending on political campaigns.

Yes, this is just what we need. More controls and diktats for how shareholders can deal with their boards. Or here’s an idea. Let’s leave it up to the free market. If people don’t agree with a company’s support of a given candidate, they can sell their shares of that company’s stock.

And btw, the whole idea of this country is that we are all “ordinary” Americans with the same equality under the law. The owner of a successful business who has earned the money to contribute to a campaign is just as ordinary as the person who hasn’t.

These would be important steps, but they would not be enough. The real solution lies in getting the court’s ruling overturned. The four dissenters made an eloquent case for why the decision was wrong on the law and dangerous. With one more vote, they could rescue democracy.

This was a great victory for free speech and a step in the right direction of limiting the power the government has to interfere in our lives.

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Wow

What happened tonight in Massachusetts was something else. It is sending shock waves through the political establishment of Washington with ripples that will continue on through the elections of 2010 and beyond.

This election shows that the Tea Party movement is real. It is not a fringe movement of crazy anarchists. It is an uprising of regular Americans, from Massachusetts and elsewhere, that understand our country was founded on the principle of liberty for the purpose of defending individual rights. The health care bill (and the bailouts, the state bribes, the union deals, etc.) is a clear violation of the rights of some for the benefit of others, and people are sick of it.

Congratulations Senator Brown. See you around in 2012.

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Reconsidering China

I was disappointed with Google’s previous decision to censor search results in China when they launched Google.cn. Helping the Chinese government suppress free speech clearly violates their motto, “don’t be evil,” in my opinion. So I applaud their decision to “reconsider their approach:”

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.

How much of this was a business decision vs. a moral stand, I don’t know. China is such a massive market that I think guilt finally set in a bit, so I’m leaning toward the latter. If they said their initial decision was to get a foot in the door so free speech could eventually sneak in, and they couldn’t publicly say that at the time, I could buy that.

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Fruit Juice is Bad for You

Sorry kids, looks like we’ll be seeing a sin tax on those Capri Suns.

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Singin’ in the Rain

I vaguely remember the 1984 presidential election. I think a voting booth was brought into our school to teach us about the process. The ’88 election is a similarly weak memory. I confess not remembering Tiananmen Square, probably because a 12-year-old has better things to do in the summer than worry about the struggle of the Cold War.

But I vividly remember the fall of the Berlin Wall. My family visited New York City shortly after the wall’s destruction began, where I noticed street hustlers trying to sell pieces of the wall to the gullible. I would say it is my first strong political and ideological memory. Hearing that you could be shot for trying to leave East Germany, without doing anything wrong, was all I needed to know which side was evil. So seeing people with hammers and pick axes tearing down that wall made me feel like the good guys had won something.

This morning on Meet The Press, Tom Brokaw made an appearance to discuss his live reporting of these events back in 1989. They showed some great footage, and I particularly enjoyed this shot.

Protester sitting on the Berlin Wall.

Protesters sitting on the Berlin Wall.

Assuming I understand Brokaw’s explanation and the geography of the location, this shot is of a few West Germans who climbed the wall, and rather than climbing down when police forces from the East used fire hoses to try to remove them, they put up with getting a bit wet and and just stayed put. The nonchalant pose struck by the man with the umbrella who thinks he’s Gene Kelly is simply classic. And the composition of the scene is great too, with the dark and dreary East contrasted with the colorful and happy West. Or as this article explains the contrast between the two societies, “it was as if one side of the wall were in black and white and the other side in Technicolor.” I would love to see an artist’s rendition of this in oil.

The fall of the Berlin Wall is something that should be commemorated and celebrated. It should be used as philosophical ammunition by others fighting tyranny in their own land.  As a 7th grader, I understood the significance of the occasion. As the President of the United States, Barack Obama does not.

Here’s the full clip from Meet The Press.

Visit msnbc.com for Breaking News, World News, and News about the Economy

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So Easy a Caveman Could Do It, But Not a Politician

Quick, how many commercials do you regularly see for car insurance? Safe Auto, Geico, Allstate, The General, Esurance, Progressive, State Farm, Nationwide, etc. From the girl with pink hair, to the gecko, to the cavemen, to the Safe Auto jingle, to Dennis Haysbert asking if I’m “in good hands” (when I want him to say, “hats for bats, keep bats warm“), auto insurance advertising is everywhere. Now how many ads can you recall that try to sell you health insurance? Chirp…chirp…chirp. What’s my point? Well, we’ll get to that.

If you caught Meet The Press this weekend, you heard Chris Dodd repeat a standard line in support of the public option; that we need it to “create competition.” A bit more than a month ago on the same program, Chuck Schumer said the same nonsense several times along with the phrase “level the playing field.”

They claim that the goverment needs to step in and create a less expensive (if you can believe that) option thereby forcing the insurance companies to compete with each other for clients. The rising costs of healthcare, among other things, is their proof that insurers are extorting consumers. So they want you to believe that the current playing field is lopsided in favor of the insurance providers and, more importantly, they want you to blame the free market for this situation.

The playing field they see has the big, mean insurance providers on one side and the underdog consumers on the other. Their delusion continues with how they see themselves; as the morally perfect referee who needs to step in to defend the little guy. A more realistic look at this game metaphor is to think of the government as a fight promoter that fixes matches hoping not to get caught. They have the power to change the rules whenever they like, and if things go wrong they shift the blame. And as for a level playing field, the government clearly has the high ground as the only side with the legal authority to use force.

If they really wanted to create competition, it would be quite easy to do. They just have to ALLOW IT. You see, the current state of the healthcare industry is because competition is restricted. There are thousands of rules that restrict companies from competing. There are two changes that would immediately create competition.

The first is to allow Americans to buy insurance in any state (or country even; you can put your money in a foreign bank) that they would like. This would allow consumers many more options and prices to choose from. Instead of a few options in a given state, there could be hundreds to choose from.

But having more to choose from won’t make a difference as long as your insurance is tied to your job. So the second change is to remove the tax advantages of getting insurance through an employer. Consumers really don’t shop for insurance because it’s tied to a job. This means they never understand the costs because they don’t have to. Detaching it from employment would give consumers the freedom to switch insurance providers while keeping the same job, and vice versa.

The senators don’t want competition. They want more control. And while the senators’ obfuscation of the issue annoys me, what kills me is that no one on either show stood up for capitalism by showing how wrong they were. This is easy to do and brings me back to my initial question about automobile insurance advertising.

Government interference destroys competition, and in the insurance industry this is clearly evident by the lack of advertising. This is a multi-trillion dollar industry without commercials! In America!! Billy Mays is rolling over in his grave. If you allow competition by making the changes suggested above, along with repealing the other myriad government restrictions on the industry, there would be health insurance commercials between spots for GoDaddy and Coke during halftime of the Super Bowl in no time, and there would be real competition.

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A Step in the Right Direction: Nobel Peace Prize Awarded to Obama

If you haven’t heard the news, President Obama just won the Nobel Peace Prize. Let that sink in and when the confusion has passed, come on back.

Ok. I felt the same for a few minutes this morning. This is like giving the Lombardi Trophy to Pete Sampras. Or maybe like giving a catcher in the minors the Cy Young.

But after the shock wore off, I realized this is a step in the right direction for The Nobel Foundation. They are used to giving the peace(!) prize to people like Yasser Arafat, a purveyor of war and suffering. So to give it to the neutral and unaccomplished Obama is an improvement. Next time around, maybe they’ll actually award it to a deserving group like the pro-liberty Chinese dissidents commemorating 20 years since the Tiananmen Square Massacre. Enjoy this choice line from that two-day-old article:

U.S. President Barack Obama is thought to have been nominated but it’s unclear on what grounds.

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No Right to Health Care

Thank you John Mackey for understanding and defending rights. I might have to start shopping at Whole Foods.

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That’s because there isn’t any. This “right” has never existed in America

Rather than increase government spending and control, we need to address the root causes of poor health. This begins with the realization that every American adult is responsible for his or her own health.

It’s great to see Mr. Mackey invoke the Declaration of Independence to argue that there is no right to health care, as that great document doesn’t say we have a right to “life, liberty, the pursuit of happiness, and a $10 copay.” Our right to life doesn’t mean others are required to keep us alive. That would necessarily violate their rights. Our right to life is a restriction on others, forbidding them from taking our lives, and us taking theirs. Our rights are rights of action, forbidding others from stopping these actions, not rights to take the fruits of another’s labor.

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