A collection of very powerful corporations invested billions into Washington for the purpose of consolidating control over health insurance.
They divided the country into fixed no-compete territories where most states only provided 2 or 3 options, some only 1.
They agreed not to poach eachother's customers, which gave them power to raise rates without having to innovate.
They also fed money into a media machine (owned by another block of massive corporations) that convinced people that health care was a competitive market, and that any intervention was socialism.
Because they had a monopoly, health costs rose more in 5 years than in the preceding 20. The costs went to pay not for innovation but a bulging "administrative" layer of profit parasites and share holders.
When middle class consumers are pinched by health costs, they cannot consume.
Which is a problem, because...
The American economy is sustained by middle class consumption. When the middle class has money to spend, the capitalist must innovate and add jobs in order to capture that spending (demand). When the middle class is broke because they can't keep up with rising health costs, no amount of tax breaks is going to cause the capitalist to invest. The capitalist will not add workers and inventory if the consumer can't afford to consume. The capitalist will not risk speculative innovation if the consumer is bankrupt.
The postwar years saw America's greatest economic growth because the government made sure the middle class was solvent enough to consume. They did this not only by supporting unions, but making sure monopolies didn't form over necessary staples like food, energy, and health care. They also provided the middle class with affordable education, as well as Social Security, Medicare, and a safety net for severe market downturns. All combined, this meant the middle class had sufficient resources to drive consumption. The capitalist, who wasn't making billions like today, had to innovate and add jobs to capture all the extra money sitting in middle class pockets.
The money that the government used to divert to middle class pockets is no longer there -- it was taken away in favor of tax cuts for the ultra wealthy. The consumer is broke and his job security has been take away by people who are bringing 3rd world labor costs to America. Lastly, as long as we have consumer-fleecing-monopolies controlling health care, the consumer will never have enough money to spend -- and there will never be an incentive to add jobs.
FYI: when Reagan cut the middle class out of the loop (in order to give the wealthy tax cuts), he tried to sustain consumption with Master Card, American Express, and Visas. People received 3 credit card offers a week.
The middle class, having lost their wages, benefits, and government programs, was forced to borrow in order to maintain the living standard Reagan promised > Morning in America.
We covered up the failure of Voodoo Economics with credit cards.
(Until the banking system broke)
And now there is nothing to drive the economy.
And the high oil consumption that Carter warned about but Reagan said was fine has become a nightmare.
America swallowed poison in 1980.
