Healthcare “reform”: seeds of the next disaster?
So the Obamacare proposals guarantee, among other things, that companies will be forced to offer “affordable” cover to individuals. The thinking being, these greedy companies are pricing cover too high, they need to be forced to offer cover at a proper level.
Of course, the reality is that the market is already forcing these companies to offer cover at the proper level, since if some of them really did overcharge, their competitors would come in and take all their customers by offering cheaper coverage. What BHusseinO is really saying is that he doesn’t like the answer that the market is giving, and is insistent that he, rather than the market, is right.
A few years ago, the government got it into its head that a lot of banks were unfairly discriminating against home buyers with poor credit histories when deciding whom to lend to. Never mind that any bank that did this would see its profitability suffer compared with banks that lent on purely commercial terms: the government knew better than the markets, OK? And passed laws to force the banks to lend, even when commercial lending criteria would suggest the borrowers were a poor credit risk.
But the government didn’t know better: the borrowers were a poor credit risk, and they defaulted in such record numbers that the entire banking system tottered. (Of course this was the fault of greedy bankers, not incompetent government!)
So are the seeds of the next disaster lurking in the heart of Obamacare? The history of government intervention suggests that is a strong possibility.
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