Community Reinvestment “The Healthcare Edition”

I’m sure you’ve heard a common definition of insanity as doing the same thing over and over while expecting different results.  Enter the latest version of the Community Reinvestment Act.  If you remember, the Community Reinvestment Act is what forced lenders to make loans to high-risk individuals at regulated prices.  It was a clear solution for the liberal minded.  As you know, the rest is history.  Fannie Mae and Freddie Mac made loans to people who couldn’t afford them at rates that were unsustainable.  Then they repackaged those loans with other assets and sold them to investors.  When the house of cards collapsed, the government took our tax dollars and bailed them out.

Obama is now working to make Blue Cross Blue Shield the next Freddie Mac and Fannie Mae and Aetna the new AIG.  Consider his healthcare bill.  It forces insurance companies to sell to anyone no matter how high risk while limiting what they can charge.  It makes businesses who can barely afford payroll buy their employees health insurance with one size fits all plans.  In the meantime, Obamacare makes insurance companies too big to fail by limiting competition and forcing everyone to buy.  Insurance companies, who survive on shared risk, will be forced to take on more risk than they can handle while not being allowed to raise the capital they need to cover it.

Imagine what will happen when the next animal flu pandemic hits and every American goes to the doctor, sending the bill to their insurance company.  The doctor bill will be higher because all their billing will be subject to insurance discounts plus Obamacare adds VAT (value added tax) to medical institutions, clinics, and medical supplies.  Insurance companies won’t have the funds to cover these costs because in addition to price controls they will also be paying higher VAT under Obamacare.

How long will doctors work for free when the insurance reimbursement backlog reaches six months?  A year?  And what does Obama do when insurance company shareholders read their company’s financials?  I think we’ve seen what happens with AIG, Citigroup, GM and Chrysler.  In addition to being forced to buy insurance, we will be forced to own the too big to fail insurance companies.

When the government owns all the insurance companies, already regulates what they can charge, and has assumed by “necessity” all of their risk, Obama will finally have what he set out for in the beginning: a socialist, single-payer tax funded solution.  It will cover abortion, and it will be a system just as efficient, viable, and fair as Social Security.

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