A Facebook friend posted a status today cheering on all the “free” benefits that are taking effect for women looking to have their birth control paid for by people other than themselves. After some back and forth about what “free” means when talking about something paid for with tax money, a commenter (who shall remain nameless unless you are mutual friends, in which case you know who to shake your head at) made the following statement:

It has nothing to do with who pays taxes. It is forcing insurance companies to pay for those services out of the premiums that YOU Already pay them!!!! Why is this so hard for people to understand? We are now getting more services for the money that we pay into the insurance company. They make less profits because they have to cover more services for us! This is a very good thing for all of us!!!!!!!!

Note the liberal use of exclamation points, each one adding an order of magnitude to the comment’s inherent truthfulness. Exclamation points aside, here was my response (unedited except for the correction of spelling errors):

It has everything to do with who pays taxes. The feds are setting up a national exchange to administer healthcare. Who pays for that? Taxpayers. Set aside for a moment the fact that this will allow the goverment to pick and choose favorites among healthcare companies. While the feds are allowing states to set up their own exchanges (which of course, must meet federal guidelines on how they are set up, which companies can participate, and how money is distributed), most are sensibly opting out. This will increasingly put the decisions in the hands of a federal bureaucracy.

Ever heard of a federal agency that didn’t get bigger and succumb to budget bloat? Me neither. This will only increase costs, especially when you consider that by government mandate, people who don’t pay federal taxes (and thus don’t pay for the upkeep of this behemoth) will still be covered. Who will make up these costs? The insurance companies? No. Economics 101. When costs go up to a supplier, those costs are passed on to the consumer.

One way the goverment will be tempted to combat this is to enforce price controls on what doctors can charge for services. This is how medicare and medicaid work. It has led to an ever-decreasing number of doctors who will accept patients on those plans. A similar effect will occur if the price controls are instead forced upon insurers: fewer companies will enter into the market and many existing ones will drop out. At the same time, more and more people will be forced into this government plan as companies who today pay for healthcare as a fringe benefit decrease coverage or drop it all together, further exploding costs to the taxpayer.

Ask yourself this: are you aware of any government programs which costs has decreased, which budgets have shrunk? No. Because the definition of a budget cut has been changed at the federal level. When you or I think of a budget cut, It looks like this: “our budget was $1000. We cut it 10%. Now our budget is $900″. At the federal level, it looks like this: “Our budget was $1000. We wanted to raise it 50%. Instead we only raised it 30%. Therefore, our budget was cut by 20%.”

This will not end well.

It never ceases to amaze me that there are still people who believe the following:

  1. Businesses don’t pass their costs on to consumers.
  2. Arbitrarily setting prices for goods will have no effect on the producers of those goods
  3. It is somehow a good thing when a business has its profits shrunk or seized.
  4. A government that can run up trillions of dollars in debt will have no problem containing costs.
  5. The government can ever provide “free” anything to taxpayers.

Of course, my answer above didn’t even touch on the other side effect of price controls: rampant fraud and abuse. Some of those doctors who don’t stop taking medicare and medicaid patients instead find ways to overbill the system and reap profits off the taxpayer. If oversight and penalties were better enforced, even more doctors would drop entitlement patients.


Addendum: A later comment brought up the 80/20 rule in the law, that requires insurers to use 80% of revenues on “clinical services” in order to cap costs. Well, that’s just another method of price control. And it leads to all the bad things mentioned above. Don’t believe me? Then believe the feds, who have seen fit to grant waivers to entities that allow them to ignore the 80/20 rule.

Also, passing laws and then selectively allowing certain entities to ignore them: regardless of your political affiliation, shouldn’t you be outraged by that?

(Crossposted from Pocket Jacks)

Jay Winkis

Jay Winkis lives in Horace, ND and works in Fargo. He likes cooking, politics, guitars, books, poker and whiskey, though certainly not in that order. He is either a liberal Conservative or a conservative Liberal, whichever makes you angrier. He blogs at Pocket Jacks.

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  • two_amber_lamps

    The coherence of the poster is generally inversely proportional to the quantity of exclamation points…..

  • ‘Tom Crawford

    What I don’t understand is why both sides still refer to a tax cut…or the current tax cuts….there was a tax cut at one time (meaning CUT as an action), now it is current tax policy. If you want to raise that rate, then it becomes a tax increase or if you want to cut the current tax policy further, then it becomes another tax cut….

    The tax cuts are done. It is our current tax policy which is being debated.
    If you want to raise it, its a tax increase till it becomes the new tax policy.
    If you want to lower it, then it is a tax cut till it becomes the new tax policy.

    Personally, I think we should get out of income tax, and go with a consumption tax, then everyone pays according to what they use.

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      The half of the population who don’t pay taxes would riot.

      • truther

        Like mittens?

        • http://nofreelunch.areavoices.com/ Kevin Flanagan

          Inanimate objects don’t pay taxes, silly.

        • Spartacus

          The burden of proof lays upon you. Harry Reid saying so ain’t proof, so prove it. Consider it a challenging task that will change the political landscape of ’12 and just do it.

        • JustRuss

          Prove it and you will seal the election for Obama. Go on!

      • Spartacus

        Conversely the half that don’t, like truther, don’t pay taxes or pay minimal taxes and will riot when, not if, they are told to pay their share. That’s why I recommend investing in copper and lead. The sooner the unwilling perish the sooner we as a nation become debt free and thus free citizens again.

        • truther

          I pay at least twice the percentage that Mitt does. And, if you could get Mitt to show his returns, I would be glad to prove you wrong.

          • Spartacus

            Now you’re trying to transfer your burden to me. You made your claim, quit making excuses and prove your claim or admit that you were just shooting your mouth off making a baseless accusation. After all, it’s your story and you’re the one responsible for it.

            BTW, I invest too, and pay zero on my gains now, but will later when I tap into it. I suppose you have issues with that too, don’t you? My suggestion to you is try to get a job, not all days are rewarding but most days you go home with a sense of accomplishment instead of the sense of failure that comes with welfare. Try it sometime.

          • truther

            I have a job.I have never been on welfare, even though there have been times that i might have been able to. Stop talking lies. I will be glad to show my returns for 1999-present if you can get Mitt to show his. We will release them toghether. Now get to work and get him to release his with me.

          • ‘Tom Crawford

            @f1b149f8359d7288ea8070688b1d068f:disqus Mitt has released what he is required by law. You are trying to goad, quite foolishly, that you are in the same way with monies as Mitt. You have made a claim – it is up to YOU to back up your claim. If Mitt made such a claim, I would expect him to back it up as well. Proof is in the pudding, you made a claim, back it up.

          • Spartacus

            BTW, you claim to have paid “at least twice the percentage that Mitt does” . So I take it that you’re willing to back that statement with you publishing certified copies of your tax returns for the same years you want Mitt to make available? Man up or man out, bitch.

          • robert108

            Even if you can be believed, which is highly doubtful, it’s an indication that you need a brain transplant and a new accountant.

          • Bat One

            The obvious solution to your dilemma is that EVERYONE pays exactly the same federal tax rate on ALL income. You make $20,000, you pay the same 15% as the guy who makes $200,000 and the guy who makes $20,000,000. Its called a flat tax, and in truth, its the only fair income tax system. And it has the added benefit that it provides a powerful incentive for people to improve their own financial situation rather than relying on other taxpayers to pick up the tab for their progressive-inspired indolence.

          • http://sayanything.flywheelsites.com Rob

            Given that Romney undoubtedly makes most of his income from investments, as opposed to wages, you’re probably right.

            But then, that’s true for everyone. Retirees who get most of their income from investments get the same benefit. Should we get out the pitchforks and torches?

    • http://sayanything.flywheelsites.com Rob

      What I don’t understand is why both sides still refer to a tax cut…or the current tax cuts….there was a tax cut at one time (meaning CUT as an action), now it is current tax policy.

      It’s because the Democrats ever very, very smart in never allowing the Bush tax cuts to become permanent policy. That allows them to frame the debate as though the tax cuts are a fleeting thing.

  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    I favor permanent birth control for all members of the free lunch bunch.

  • truther

    It’s pretty amazing that the insurance companies have to pay for this, and at the same time have to rebate the excess profits back to the insured (and many had to last year), all because of what you call “Obamacare”. Amazing!

    • jl

      No, it’s called Obamadoesn’tcare. Or should be.

  • mickey_moussaoui

    Next year when obama’s tax plans kick in the libs will be crying a new tune. Then they’ll figure out he lied to them as well.

  • Catblaster

    I’ve pretty much given up on talking to proggies about this issue. They are so blinded by the small shiny object of ‘free health care’ that logic can’t intrude in to the fantasy.

  • cylde

    The idea that insurance companies will have less profits and eat the extra costs is utter nonsense, they will pass extra costs on to the consumer like all businesses do or go out of business. Actually that going out of business is the ultimate goal of obama care so govt. will have complete control. Frankly i like the idea of liberals dying of govt. neglect when there is a national health service as they do in England.