Iowa’s Governor Terry Branstad has joined a lawsuit by the state of Florida, challenging in federal court the new health care plan passed by both houses of Congress and signed into law by President Obama last year.  The primary objection to the law is the mandate that citizens must buy insurance.  The second complaint is that it would be an unfunded mandate. Republicans see this mandate as unconstitutional. In fact, a repeal of the whole plan is expected to pass in the House of Representatives today though it faces certain failure in the Senate, which is controlled by Democrats.

What is most spectacular about this movement is the unanimity that the requirement that consumers buy insurance should be repealed.  However, there is no agreement on whether the requirement that insurance companies carry people without regard to pre-existing conditions (PECs) should be considered constitutional or not, and whether that aspect should eventually be part of a federal health care bill.

The various aspects of the health care bill are each dependent on other.  Repeal of one major aspect will either destroy the bill or destroy the economy.  I believe it cannot be taken apart piece-meal.

Whether the requirement that insurance companies carry those with PECs can pass constitutional muster, it must be seen for what it is, a provision that will break the backs of the insurance industry.  And because we have become foolishly dependent on these third-party payers for all of our health care, a collapse in the insurance industry, at least in the short term, would be catastrophic.  Mike Huckabee and Rick Santorum have wisely has urged rejection of this requirement.   Newt Gingrich suggests the ability to take insurance from job-to-job will help those with PECs, though he has not said outright he rejects the consumer mandate. On the other hand, Mitt Romney included the obligation to cover PECs in Masscare and Tim Pawlenty  supports making insurance companies cover those with PECs.   It is unclear where Sarah Palin and other presidential candidates stand on this issue.

It is possible that insurance companies could survive a large number of people with PECs suddenly entering into the system.  But legal mandates have consequences that go beyond the required coverage of new customers.   They create an incentive for some customers to go without expensive insurance until after they are diagnosed with a costly condition.  The result of this mandated coverage will have the reverse effect it was supposedly intended to achieve.  Less people will likely choose to carry expensive insurance, not more.  It is called gaming in Massachusetts, prelude to a train wreck.

This was the tradeoff the whole deal depended on.  Insurance companies who signed on basically agreed to cover everybody without regard to previous health status, on the condition that everybody was required to buy insurance, particularly young, healthy people.  This created a situation where college students and those just out of college would be forced to subsidize customers more prone-to-sickness.  This at a time, when their income levels are at the lowest, and many had become independent.  This explains the provision that adults up to the age of 26 must be offered insurance under their parent’s plan.

When government gets involved in health care, it is inevitable that cost controls must be implemented, especially when the same government simultaneously adds required coverage. Mitt Romney’s plan in Massachusetts added requirements, for example, that insurance companies cover drug abuse and psychiatric care even if the consumer doesn’t want it.

Sarah Palin was right that it would only be a matter of time that death panels, as she called them, would have to be implemented.   Everyone knows that care at the end of life is the most expensive.  Everyone knows that people at the end of life are the most independent on others for their care, and even for decisions made on their behalf.  Everyone knows that, economically speaking, the sick and the elderly are the least productive members of society.   This deadly social combination, when added to the already aging Baby-Boom population, and the reduction of birth rates among Generation X-ers will certainly add to pressures to stop care for or use only palliative care for our society’s weakest members.  Obama already told Jane Sturm that her elderly mother should have taken a pill instead of having a pacemaker put in, that extended her life from 99 to 105.

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