Andylusion
Platinum Member
Inelastic market has runaway costs. Government steps in and mandates inelasticity. Inelasticity and runaway costs remain.
Is that supposed to make sense? Free markets are not inelastic, in fact, they are exactly the opposite of inelastic.
Demand for health insurance is relatively inelastic for a lot of reasons. Once people have insurance their demand for services is inelastic.
The market is inherently bad at controlling costs even before Obamacare. Obamacare basically confirmed the inelasticity that was already present.
Meanwhile you are going to the old conservitard standby, cry "free market" and derp away.
That's completely wrong. Demand for health insurance is not inelastic, unless you fabricate that "insurance" is monolithic in nature.
It is not. Back in 2006, I had a very simple, very cheap health insurance policy, that was only $67 a month.
It was an independent policy, not connected to any job. Thanks to ObamaCare, now all those plans are gone, because ObamaCrap mandated a minimum coverage, which of course drives up prices.
One of the few free-market incentives to keep plan prices low, was that they had to be low enough that people didn't go for these cheaper plans.
Now those plans are gone. So prices naturally raise on the insurance plans that already existed..
But more than that, ObamaCrap does a various things, that people both inside and outside the insurance business, all said would have no other effect than to drive up costs drastically.
Pre-existing conditions. If you have someone who doesn't have insurance, and refuses to get insurance, and then gets sick or harmed, and then applies and can not be refused for insurance.... who covers that cost?
Well of course the premium payers. That's us.... we pay for it through higher premiums.
Another way, is through the pre-made plans, which cover explicitly defined terms. This is the exact reverse of my first point.
Having government enforced, pre-defined plans, drives up prices by driving out competition.
If you are a small independent car manufacturer, how do you compete with the big companies? How do you compete with Ford, and GM, and Toyota?
There is only one primary way. It's on differentiating your product. People say you compete on price, but that's not really true. You make the product cheaper, and that's how you lower the price. ForTwo. It's a cheaper product, which is why it sells for $13K.
The other way would be the Jaguar XF. In that case, it's a much better product, and that has a higher price.
Now imagine if the government came in and made pre-defined cars. Everyone has to sell the Taurus. Jaguar Taurus, the BMW Taurus, Toyota Taurus.
This is exactly what the government did with insurance. Any company can sell any plan they want, at whatever price they want, provide the fit the pre-defined plans.
Do you think BMW would be selling cars, if they had to follow the Taurus government defined car? Or Jaguar? Or at the other end, Smart?
Smart wouldn't be able to under cut the price, because the minimum standards would be.... Taurus. It would end up being within a thousand to a few hundred in cost. If it almost costs the same, why would anyone not pick the real Ford Taurus?
Jaguar and BMW, wouldn't be able to add any real features, because they have to follow the governments pre-defined plan. Thus they wouldn't be able to sell many at a higher price than the Ford Taurus.
As a result, competition would dry up. The same thing happens in Insurance. Being able to come up with a different insurance plan, allows smaller companies to compete with bigger companies, which drive down cost.
And lastly, and this is almost a bigger issue than the others.
And I don't know why no one else seems to have picked up on this, but one of the largest drivers of increasing cost, is Medicare and Medicaid.
Hospitals, Doctors, and Clinics, all lose money on Medicare and Medicaid. As far as I can tell Medicare rarely ever covers the full cost, and Medicaid has never covered the full cost. As a result, all of the expenses of Medicare and Medicaid patients, are all passed onto Premium payers. That's us.
Well ObamaCrap mandates an increase to both Medicare and Medicaid coverage, and this increase in Medi-Patients is directly driving up costs.
I posted an article by the BBC, which talked about ObamaCrap, and tried to defend it, and yet everywhere the BBC reporter went, she found endless examples of people saying it was terrible, and harming the system. (link below).
ObamaCare is a nightmare. Cause and effect. Economic train wreck. Why people don't grasp that when you mandate more coverage to more people, the natural result is more cost, I don't know. Public education fail? I don't know. I don't get it.