The Health Care Flaw
In 2010, Congress enacted the Patient Protection and
Affordable Care Act in order to increase the number of Americans covered by
health insurance and decrease the cost of health care. One key provision is the
individual mandate, which requires most Americans to maintain “minimum
essential” health insurance coverage.
Argued March 26–28, 2012 and decided June 28, 2012, National
Federation of Independent Business versus Kathleen Sebelius as the 21st United
States Secretary of Health and Human Services was a landmark United States
Supreme Court decision in which the Court upheld Congress's power to enact most
provisions of the Patient Protection and Affordable Care Act (ACA), commonly
called Obamacare. It also upheld enactment of the Health Care and Education
Reconciliation Act (HCERA), including a requirement for most Americans to have
health insurance by 2014. The Supreme Court, in an opinion written by Chief
Justice Roberts, upheld by a vote of 5 to 4 the individual mandate to buy
health insurance as a constitutional exercise of Congress's taxing power.
Nonetheless, Republicans and Democrats in Congress began
their bickering over funding the government and President Obama's health care
law.
Sept. 29, 2013, just after midnight on Sunday morning, the
House of Representatives used a rare and lengthy weekend session to shift its
demands for restricting Obamacare. By a near party-line 231-192 vote, the House
voted to delay implementation of the health care law by a year. It also voted
248-174 to repeal a tax on many medical devices that helps pay for the health
care overhaul.
Sept. 30, 2013, after the Senate removed the House
provisions postponing Obamacare and erasing the medical device tax, the
shutdown bill moved back to the House. The House approves a new shutdown bill
228-201 with different demands on Obamacare. It would delay for a year the
requirement that individuals purchase health insurance, and require members of
Congress and their staff to pay the full cost of health insurance, without the
government paying part of the costs. The measure then bounced to the Senate.
The Senate voted 54-46 to strip the House provisions on
individual health insurance and federal health coverage subsidies for lawmakers
and staff. The bill returns to the House. Shortly before midnight, White House
Budget Office Director Sylvia Mathews Burwell sent memo to agency heads stating
that a shutdown seemed unavoidable.
The following Tuesday, Oct. 1, 2013, with no spending
legislation enacted, partial federal shutdown began to take effect. House voted
228-199 to stand by its language delaying required individual health coverage
and blocking federal subsidies for health insurance for lawmakers and staff,
and to request formal negotiations with the Senate. The U.S. government
shutdown began as the result of the Republican-run House vote to approve
legislation denying money for much of the health care law.
The Republicans are now responsible for intensifying
conservative fervor for using the shutdown bill to try to force Democrats to
limit Obamacare. The obstinate determination of the Republicans to forestall
Obamacare is so invincible that the latest twist in the budget battle is
whether the House of Representatives could open the government with a so-called
"clean" budget resolution. The government shutdown could be ended
immediately by putting a no-strings-attached spending bill up for a vote on the
House floor - that is, a bill that deals only with the federal budget, and that
does not address funding for the Affordable Care Act or defunding Obamacare, as
many Republicans would like. But Republicans have already reneged on their
previous agreements regarding the Affordable Care Act and do not seem to be
willing to give in now, holding the government hostage over Obamacare.
Certainly, there must be something wrong with that piece of
legislation, if it has become such a cornerstone of contention in the Congress.
With the shutdown in its ninth day, Congressional leaders met to discuss the
issue Wednesday, when House Speaker John Boehner, R-Ohio, and Majority Leader
Eric Cantor, R-Va., met with House Minority Leader Nancy Pelosi, D-Calif., and
Minority Whip Steny Hoyer, D-Md., sat down for about a 40 minute meeting. Right
after the meeting, however, Boehner took to the House floor to double down on
the Republican position that Obamacare be part of negotiations to fund the
government and raise the debt ceiling.
Putting aside the details as to who is not doing enough to
cooperate with whom, one thing is clear, i.e. some members of the U.S.
government are not willing to introduce greater regulation of the U.S. health
care sector. So far, House Republicans have passed a bill that would create a
20-member bicameral working group to negotiate over government funding. Senate
Democrats have introduced their own bill that raises the debt limit with no
other conditions.
The Republican effort to curtail President Barack Obama's
health care law has not been substantiated by any feasible argument on their
part. When asked, they simply refuse to answer unequivocally and do not discuss
the main reasons behind their attack on Obamacare. However, there is at least a
tactical reason Republicans have been rushing recently to try and defund the
Affordable Care Act before October 1, when major sections of the law took
effect.
It has been reported that Republicans know what polls show —
that most Americans do not know exactly what is in Obamacare, but when told
what the law actually includes, a strong majority support the law. Once state
health insurance exchanges take effect, and premiums for all Americans go down,
Republicans know that the new health care law will only become more popular and
even harder to repeal. As Republican Senate Minority Leader Mitch McConnell
said, “It's a lot harder to undo something than it is to stop it in the first
place.”
Timing of their attack on Obamacare was important to those
who are trying to forestall the regulation of the health care in the U.S. but
it does not explain the major reason of the attack. On the other hand, who is
ultimately behind those efforts?
“Cui bono?” as Lucius Cassius Longinus Ravilla, a Roman
consul in 127 BC, whom the Roman people used to regard as a very honest and
wise judge was reportedly in the habit of asking, repeatedly. As it is well
known, U.S. Republicans railed against Social Security and Medicaid and
Medicare when they were first proposed. Today, those programs are now highly
effective and broadly popular parts of American social safety net, which is
supported by strong majorities of Republican voters. There have always been
special interest groups opposed to increasing government regulation under the
pretext of trying to prevent the U.S. government from getting too “big”.
Republicans and conservatives have effectively captured the role as protectors
and advocates of “small government,” leaving Democrats and liberals to wrestle
with the pejorative connotations of “big government.”
The assertion Republicans make that the Affordable Care Act
will in the end be detrimental to the U.S. small businesses is groundless. They
would not be able to substantiate their claims with details or sound reasoning.
During the latest segment of the Daily Show with Jon Stewart, Jason Jones asked
Noelle Nikpour, GOP Strategist and author of “Branding America”, why
Republicans were opposed to the Obamacare to which she replied: “ We don’t need
government in our health care, we don’t need government in our life. We need a
smaller government.”
As Jones pointed out, the problem is, “no matter what we do,
the GOP is holding something hostage that they just don’t value”. When asked if
they were going to maim the U.S. government, that they were holding hostage,
regardless, she plainly rejoined: “we will always fight for less government”. Republicans
do not intend to reach a compromise regarding the health care law so that the
government would be able to work on efficiently. Their ultimate target is not
the Affordable Care Act proper but the government itself. The GOP stance on
regulation is such that they would welcome any disruption in federal government
activities, as long as it proves that the government is unable to do its job
and certain private enterprises have their prospective paths to taking over the
government functions paved for them as a result.
Republicans criticize the Patient Protection and Affordable
Care Act (PPACA), commonly called the Affordable Care Act (ACA) or Obamacare, a
United States federal statute signed into law by President Barack Obama on
March 23, 2010, ostensibly questioning the constitutionality of the
"individual mandate," which is requiring that every American either
purchase health insurance or pay an annual fine. To them, mandated health
insurance is just a pretext to raise the issue of the “big government”.
The whole Obamacare debacle seems to be a pretext to bring
this issue forward once again. The government shutdown was the objective and
the government is in the crosshairs, now. Like the U.S., other countries have
to deal with this situation, too. It is part of a global strategy in the
context of the global financial crisis to create environments so that the scope
of the state would be redefined in many countries. In light of the recent
debt/financial turmoil, it has been revealed for all to see that many
governments these days are nearly bankrupt. That hope is, it seems, that it
will focus some minds on solving this problem. But the final solution has
already been demonstrated – privatization sell-offs from debt-strapped
governments.
It has been reiterated for some time already that the
governments the world over in financial trouble, over the next decade, will not
be able to afford the entitlements due to the increasing numbers of pensioners,
healthcare and welfare recipients, plus salaries and benefits to government
employees, plus the myriad other programs and subsidies. For example, unfunded
U.S. government liabilities currently amount to $120 trillion. Those who will
sometime later come as privatizers would certainly welcome that number that is
being emphatically noted already to be about double the value of the total
private net worth of all 300 million Americans.
Comparing U.S. government’s debts to private net worth, accompanied
by public services’ price increases is not accidental. The problems that not so
long ago seemed to be characteristic of the European economies mostly are coming
home to roost on the American soil, now. There is an interesting dynamic
present in Europe, though. The European Union and European Central Bank are
demanding that debt-strapped Greece sell off its prime tourist land, ports,
transport systems and other assets in the public domain. That is perfect
example of classical liberalism grab for basic infrastructure as part of the
overall asset stripping.
The U.S. classical liberalism in action has been
demonstrated through financial engineering which required unregulated milieu. Financial
and banking sector has already proved to be a paradise for liberal laissez-faire
economics. In the new debt-strapped low-interest environment, pooled investment
vehicles like private equity firms, hedge funds, and buyout funds are doing
something that has not been seen in nearly a century: they are buying up
assets, starting with the inventory of foreclosed properties and ending with
consolidating inventories by buying assets directly for cash.
As a result, financial charges and tollbooth rents are being
built into the prices charged for access to what is essentially public services
(i.e. roads, schools, hospitals). Prices began to rise not because costs and
wages were rising, but because of monopoly rents and other rent-extraction
activities.
In the process of increasing consolidation, a new neo-feudal
rentier class is forming eager to buy roads and bridges to turn into them toll
roads and bridges, to buy parking-meter rights (as in Chicago’s deal), to buy
prisons, schools, hospitals, parks, public services and other basic
infrastructure. According to PwC's Health Research Institute (HRI), U.S. health
industry consolidation has increased more than 50% since 2009 — activity that
is expected to continue through 2014. According to a recent report, hospital
mergers can lead to price increases of up to 20.3%.
Pooled investment vehicles are usually used to aggregate
collective profits. The process of privatization and consolidation is best
carried out in the environment similar to the one in the U.S. financial sector,
which has increasingly lacked government regulation and thus allowed financial businesses
and trade associations do basically whatever they wanted. Now, as they started buying
assets up, they most naturally would like to see the same classical liberalism
in other sectors of the U.S. economy.
As of now, various financial businesses and trade
associations (like private-equity groups) own the majority of the US health
care system facilities (Hospitals, Medical Centers, etc.). They use various
umbrella organizations and front groups to operate the Medical Centers,
Hospitals, and other medical facilities.
Hospitals make the most politically powerful institution in
any congressional district, now. Their position is usually solidified as that
of community’s most important charitable institution, and their influential
stakeholders determine economic policies of medical equipment manufacturers,
drug companies, doctors, and rank-and-file employees. Hospitals are
consolidating by buying doctors’ practices and competing hospitals, their
leverage over insurance companies is increasing.
The U.S. health care system's operations have become an
extension of the corporate finance capital's economic activity. The revenues,
profit margins, and net profits of most of the local Medical Centers and
Hospitals (nonprofit as well as for-profit) exceed those of the local banks and
other economic enterprises.
Therefore, the question of who benefits from the lack of
government regulation in the U.S. health care is more than relevant. The U.S.
health care system economic model is represented by economic operations and
transactions (between Medical Centers, Hospitals, pharmaceutical companies,
medical equipment manufacturers, insurance companies, Centers for Medicare and
Medicaid Services, and doctors) that tend to be just as unregulated as the
operations of the financial sector used to be. The culture of self-regulation,
especially when it comes to drug and medical equipment pricing policies and
health care service charges, startlingly reminds one of the culture of lacking
regulation present in the financial sector.
Drugs and medical equipment producing companies, along with
the major medical facilities (Medical Centers, Hospitals, and test labs), have
been given free hand in pursuing their policies of unrestrained prices and
profits under the pretext that it is necessary to fund the risk taking of
research and development. Because of heavy lobbying on the part of the medical
community, regulating the health industry market has always been very difficult,
too.
Congress has continually prohibited the Centers for Medicare
and Medicaid Services (CMS) of the Department of Health and Human Services from
negotiating prices with drug makers, medical devices manufacturers, and durable
medical equipment manufacturers or take any measures which could be construed
as mandates for practice guidelines, coverage recommendations, payment, or
policy recommendations.
Obamacare, which intends to bring new customers into the
market by mandating their health insurance and then providing taxpayer support
to pay their insurance premiums, is most likely to create conditions necessary
for greater hospital consolidation. Dominant hospitals and their doctors will
have a greater advantage over the insurance companies, which will lead to
greater health-insurance costs. The result would be ever higher (close to
“chargemaster” list) prices for health care products and higher profits for the
health-care-industrial complex with their anonymous absentee owners operating
through their pooled investment vehicles at the top of this food chain.
The U.S. health care has become part of the playing ground
for post-bubble environment of debt-strapped austerity, which is empowering the
financial sector to become an all-powerful oligarchy much like landlords in the
19th century. Now that the economy and the governments are being increasingly
“loaned up”, those financial oligarchs are going to obtain their capital gains
through direct ownership and charging economic rent.
One of the most interesting consequences of this economy
will be accentuated financial power grab and great political fight for the
remainder of the 21st century. That political fight will need new fields and
new ploys for its parties to cross swords. The fact that Obamacare is now law,
duly passed by Congress and then smiled upon by a majority of both the
electorate and the Supreme Court in 2012, means that both parties, Republicans
and Democrats alike, are being used do delineate the context of the future
battlefield. The fight has just begun!
The U.S. health care law has one fundamental flaw in it that
makes it a bad instrument to provide health care benefits to the majority of
the U.S. citizens – its initial purpose was not to make health care more
affordable but to create a maneuver for the financial oligarchs to try the
grounds of the government regulation domain. The sole reason Republicans stand
against Obamacare is that they want to establish private finance corporate
regulation in place of the federal government regulation. That is why they keep
saying that they do not want government in their lives. They mean it.
Unlike the majority of the U.S. citizens, the members of the
corporate elite have enough money to provide for their own good, including
health care. Privately owned health care facilities, regulated by private
owners – this is the end goal of the opponents of the President Obama’s health
care law. The only way to get in that private paradise of theirs is through
incessant political fighting, though, and they are truly happy now, because the
Patient Protection and Affordable Care Act (PPACA), commonly called the
Affordable Care Act (ACA) or Obamacare, has given them ground for that epic
fighting and it began as planned, it seems.
That is the main flaw of Obamacare. Regardless of outcome of
the Obamacare standoff, the end beneficiaries are going to win. If the health
care law and government funding is approved in full, the government regulation
of the health care sector will increase, paving the way for more consolidation
of the health care industry, etc. If the government shutdown crisis ends up
unresolved with Congress failing to raise $16.7 trillion ceiling, the U.S.
economy will probably enter a “very deep recession”, thus undermining the
position of the federal government and paving the way for the private
enterprises to eventually take over the government’s regulatory functions. One
way or the other, that absentee owner, who stands behind Obama as well as
behind the Republicans, is going to win. It is just about which way the
financial power grab will develop. One master with two puppets on his hands, as
always, he would not approve of anything less than a win-win situation.
