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The Obama Watch
Redistribution via Price Discrimination
Obamacare is just another way for President Obama to achieve his goal of redistributing income and wealth.
“Under the pretext of ‘equalizing burdens’ and preventing ‘salary discrimination,’ Obamacare mandates that insurance premiums must be based on the policyholder’s income level — forget the objective value of the services covered or the health liability of the individual insured,” reports Richard Ralston, executive director of Americans for Free Choice in Medicine. “But since the actuarial nature of insurance and the realities of long-term cost management cannot be ignored, the effect is that those with above-average incomes will be subjected to inflated premiums relative to costs.”
In other words, Obamacare is just another way for President Obama to achieve his goal of redistributing income and wealth. As candidate Obama, seeking to justify his redistributionist proposals for higher levels of government confiscation of higher incomes, made clear in 2008 to plumber Joe Wurzelbacher, “I think when you spread the wealth around, it’s good for everyone.”
It’s the Miracle-Gro philosophy of economics. It views individual incomes as fertilizer, something for politicians to toss around in an attempt to make sure that all the flowers are adequately blooming and sufficiently equal.
“Politicians, most of whom love anything that expands the reach of government and their own power, are drawn even more to the creation and manipulation of a political spoils system that allows them to pay off their friends and punish their enemies,” writes Ralston. “To that end, much political debate in recent years injects egalitarian ideology into the discussion. For example, Barack Obama, in his candidacy, advocated an increase in the capital gains tax even though such hikes suppress economic activity due to reduced capital investment, and decrease revenue to the government. He said he supported the increase anyway — because it would make taxes more ‘fair.’”
The line of attack for full government control in health care was built on a strategy of Obama demonizing “the rich” as greedy for wanting to keep at least half of their earnings, while portraying medical professionals as ravenous butchers who would rather cut the feet off diabetics than provide advice on less profitable dietary solutions.
Regarding Obamacare’s redistribution aspects, Paul Winfree, senior policy analyst at the Heritage Foundation, highlighted the specifics in his recent analysis, “Obamacare Tax Subsidies: Bigger Deficits, Fewer Taxpayers, Damaged Economy.”
“Obamacare’s tax subsidies are available for certain households who purchase federally approved coverage in the newly created health insurance exchanges unless they are eligible for Medicare or Medicaid or they can receive coverage through their employer that meets standards established by Obamacare,” explains Winfree.
“The tax subsidy is structured to cap the percentage of family income that these households pay for health insurance. The percentage is based on a sliding scale, so the subsidy decreases as household income rises. Households at 133 percent of the federal poverty level will receive a tax subsidy that limits their out-of-pocket premium to three percent of gross income. Households between 300 percent and 400 percent of the federal poverty level will receive a tax subsidy that limits their premium contribution to 9.5 percent of household income.”
In short, for the same medical coverage, some households will have to pay a percentage of their gross incomes that’s more than three times what households with lower incomes will have to pay.
Ineligible for any subsidy, households with incomes higher than four times the federal poverty level will have to pay whatever price the government dictates.
What’s next? Higher prices for bananas for those in the oft-targeted group of “millionaires and billionaires”? Triple turnpike tolls if you’re driving a new BMW?
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
Letter to the Editor View all comments (20) | Leave a comment
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Bill Hussein O'Stalin| 6.28.11 @ 6:45AM
The years 2013/14 will see some interesting changes as Obamacare takes hold and only fools believe it will not take hold.
Unless the Supreme Court rules it is unconstitutional, and I believe it is, Obamacare will become reality.
The reality is that 5 million workers in the health insurance industry will evaporate, seemingly overnight.
The law has gamed the system to drive the health insurance companies right into the ground.
After that occurs, the state will rule supreme and redistribution of wealth will be permanent.
One hundred years from now, historians will look back at Social Security, which works off a similar premise, and realize that was the tipping point.
Conversely, if the Supreme Court rules Obamacare unconstitutional, then many will wonder how citizens can be forced, and forced it is, to buy Social Security and all it's highly overrated, and overpriced, offshoots.
It's the ultimate political struggle. Permanent statism which will fail, versus individual liberty which defines free men.
lydia | 6.28.11 @ 9:24AM
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I would love to ask Hussein to his face.. "Hussein? Are you aware it was recently uncovered in the Bill you signed in to Law that upwards of 3 Million Middle Income individuals reaching age 62 can recieve free subsidized Healthcare?"
Handy| 6.28.11 @ 1:47PM
Social Security is a moral sin. Sinful Security would be more accurate. It should be ended, and here's how to do it.
No one born after a date certain should ever be required to pay in, or to be eligible for benefits. All others should be able to opt out, that choice being permanent. Their contributions would end, but they would no longer be able to collect. Opting to stay in would mean remaining obliged to continue paying and to be eligible for benefits. But there would be means-testing.
In a couple of decades this Ponzi scheme would come to a screeching halt. It would be nothing more than a bad memory and a sad lesson-learned.
Same with Medicare.
Oldefarte| 6.28.11 @ 2:06PM
Your theory is correct, but you STUPIDLY are ignorant of the original basis for at least SS which was the providing of a partial income retirement for THE MORONS AND DUMBARSSES within our society that are incapable of saving/investing for their own private/particular retirement needs. If your [again] theory is allowed to become actuality, then trillions of these inept individuals will be left to DIE IN THE STREETS OF STARVATION & DISEASE from their lacing their own personal/private financial means to provide for themselves after reaching an unemployable age. If that is what you desire, then so be it. Many of us alternatively have spent our working lifetimes in systematically providing through our own savings/investments a nest egg that will take care of our individual needs in retirement, but we few are the exception and far from the rule. The current [due to this depression] savings rate in this country is 5%, but that has increased from a decades old rate of 0%. Not only are the typical morons going bankrupt from consuming/purchasing worthless excrement their entire imbecilic lives, but additionally have not saved a dime toward their own retirement purposes. So, if your opinion comes true, they will die in the mean streets, and that is obviously okay by you [and I won't shed a tear either]!!!!!!!!!!!!!!
Appleby| 6.28.11 @ 3:14PM
When Social Security was first set up, the retirement age of 65 was roughly 10 years beyond the normal lifespan of the average working man (and it was almost always working men who paid in). Then the average lifespan increased, but the age of collecting SSI remained the same. Then they started adding in collectors who had never paid in.
Those two errors are what doomed SSI. If the age of collecting had kept up with the increasing lifespan, you'd not be able to collect SSI nowadays until you reached age 90; and if only people who paid in could collect (and not their sisters, cousins, aunts, widows, disabled children and likely Democrat voters without papers), then SSI would still be ticking solvently along.
The problem is not the system; the problem is that the world changed and the system didn't.
Oldefarte| 6.28.11 @ 4:35PM
You are partially correct, but mostly not so. SS was established as a PARTIAL [NOT TOTAL] retirement plan, and it was FORCED because of individuals lack of the personal responsibility/decipline necessary to save on their own. The main downfall [other than the lengthening of lifespan that you note] was/is the federal government's THEFT/BORROWING of $trillions from the SS trust fund. Why did they do thus? Simple, because like with everything else that they do [aka the current defecit/debt], THEY SPENT TOO MUCH MONEY AND MORE THAN THEIR INCOME-REVENUES, thereby necessitating their borrowing/stealing from the SS fund. If the government was forced to repay back said $trillions, and to require an immediate uncapping of the $100000 income limitation upon ss taxiation, the SS fund would be able to indefinitely meet its beneficiaries' benefits payments. An increase in the age of collection is not the answer, since most companies and governments have mandatory 65 retirement ages, and therefore forced retirees cannot work/earn income beyond that age!!!!
Petronius| 6.28.11 @ 8:48AM
For the proponents of socialized medicine, is essentially putting an end to the fee for service structure we now have and instituting wage and price controls. It is the retrograde plebe's victory over "the man". It is the first dose of vindication, knowing that some of his betters can make a "profit" off of him. The physicians of an altruistic bent who do not surrender their licenses and continue to practice will be over worked and grossly mismanaged by government bureaucrats, whose primary mission is to enshrine the Leveler philosophy in our government, by guaranteeing that people in other professional classes and above do not receive any care over and above what Medicaid recipients get now, who have never paid anything and never will. The result will be a drastic decline in the quality of medicine for everyone except members of practicing physicians families AND The Upper crusts of Office Holders and Government Employees. The rest will get what they want us to have which will be determined by party membership and campaign contributions. If you are not related to a medical professional, have a nice life. It won't last long.
Redstateboy| 6.28.11 @ 8:51AM
Well Stated Bill..
I would love to ask Hussein to his face.. "Hussein? Are you aware it was recently uncovered in the Bill you signed in to Law that upwards of 3 Million Middle Income individuals reaching age 62 can recieve free subsidized Healthcare?"
Petronius| 6.28.11 @ 8:53AM
No edit button here. 4th line should be...cannot make a "profit" off of him.
A. C. Santore| 6.28.11 @ 9:32AM
"What's next? Higher prices for bananas for those in the oft-targeted group of "millionaires and billionaires"? Triple turnpike tolls if you're driving a new BMW?"
For Heaven's sake, please don't give them any ideas!
Fairbanks99| 6.28.11 @ 9:44PM
One of the Euro states already does this - your traffic ticket amount is based on your means. Not sure which one.
Bill Diebold| 6.28.11 @ 9:52AM
...for you little boy islamist...
"From each according to his ability, to each according to his needs."
K. Marx 1875
Dave | 6.28.11 @ 10:28AM
Those among us with more than a passing knowledge of how Obamacare will work its way through the medical food chain, realize that Barry's plan is designed to crush the private insurance business ... OUT of business and herd the sheepeople into his Utopian, government-run healthscam. As stated by other posters, doctors today might want to consider reworking their resumes and see if the DMV, Post Office or the new Federal Med of Bureau of Fannies and Feet will accepting applications. Sure, it's all government work, but unless this iron fisted crushing of American free will and enterprise is stopped at the border (along with illegal immigration), that's all that will remain as we head for the deep dung pile.
When the system's firmly in place, I suspect we'll soon be getting all our life saving, critical care treatments at a government health clinic from a team of doctors wearing tall feathered hats, rattling a necklace of beaver bones while chanting ... "Yamodigladygaga." Translation? "Take two Excedrin and call me in the morning. NEXT!"
Man, I feel healthier already.
Oldefarte| 6.28.11 @ 2:08PM
Excellent thoughts/facts, Ralph. I couldn't agree more with same!!!!!!!!
Stan REdmond| 6.28.11 @ 2:36PM
And of course all us obomaton citizens, i mean subject, will automatically go along with Obama's required pricing structure as planned by the bean counters who wrote this law.
NONE of us will fudge our "income" work under the table more, move our companies overseas, barter services more, or just plain go gault and earn as little money as possible to survive. To do so would deny Obama his glory.
Pat| 6.28.11 @ 5:53PM
Obama may have the altruistic goal of income re-distribution, but only in his “official” capacity as president, he doesn’t mean it should apply to himself or his family of course. Among the utter nonsense we, as citizens, are forced to believe about our democracy is that our presidents - past, present and future - are just “average Joes” like us. When they say “the rich should be taxed”, we have to pretend they are speaking as “one of us”, just looking out for our best interests and they really mean those other “rich guys”.
Since Truman, no president has suffered the indignity of being poor, or perhaps “genteel poor” is a better term. Truman actually couldn’t afford to be an ex-president, couldn’t travel the country giving speeches at his own expense, couldn’t afford to keep up grandiose appearances. Unlike FDR, poor but blunt Harry said: “Look, I can’t afford it, I’m not rich” – and he was correct, not being a trust fund politician. So, naturally, our country took legislative pity on every ex-president since, providing all manner of taxpayer funded, post-presidential bennies, plus whatever honorariums, lucrative book deals, outrageous speaking engagement fees, etc., the now ex-president could promote toward his personal well-being (ask the noveau-riche Clintons for further explanatory details). Harry believed it was morally wrong to benefit financially from serving the public as president – how charmingly naïve. And no ex-president since Harry has felt quite that way.
Which brings us to the curious revelation that ex-presidents have a lot of wealth, cash or non-cash, provided by a grateful nation and sheltered from those very same income re-distribution plans. And an additional curiosity is that we, in the public interest, won’t permit mass murderers or serial rapists to write books about their crimes and then profit monetarily from their sensational memoirs. Maybe we should extend that common sense idea to ex-presidents as well, especially those who champion income re-distribution schemes during their reign. And if the rest of the world pities us unsophisticated Americans for having a poor ex-president, then we’ll just have to suffer our national mortification in silence.
Nite| 6.28.11 @ 10:48PM
Recently went to Doc. Was told that my ordered prescriptions now have to be entered on a government database. I am on Medicare, so I guess Obama's unelected unconfirmed gaggle of 15 so called experts are beginning to monitor what physicians do for Medicare patients.
weddingdresses | 6.29.11 @ 5:26AM
Recently went to Doc. Was told that my ordered prescriptions now have to be entered on a government database. I am on Medicare, so I guess Obama's unelected unconfirmed gaggle of 15 so called experts are beginning to monitor what physicians do for Medicare patients.
Samuel af Ugglas| 6.29.11 @ 7:27AM
In my lovely country of Sweden that has been ruled by marxists for apr. 80 years, they have taken the ideas presented by your miracle president Obama a step further.
If you drive around in an obsolete old car that dosen´t have any amount of fixed costs, although it runs well you will be taxed as if you could in the future be driving a Porsche.
Michael Ejercito| 11.17.11 @ 1:58PM
Imagine if ObamaCare regulated auto insurance in the exact same way.
Poor persons with multiple drunk driving convictions would be able to get lower premiums that rich persons with perfect driving records.