Obamacare Rebate Ends Capitalism

By Van Irion | July 27, 2012 | Liberty Legal Foundation

Obama eligibility attorney, obama ballot challenge lawyerLast week I was surprised to receive a check from my insurance company. I hadn’t filed a claim, hadn’t canceled a policy, and couldn’t think of any other reason they might be sending me a check. It wasn’t huge, less than $100. But still, why would they be sending me money? Usually it goes the other way.

When I read the letter that came with it I thought it was a joke. I actually read it twice. Then I showed it to my wife to make sure I wasn’t imagining things. Once I realized that the letter actually said what it said, and recovered from my shock, I was furious.

The letter from my insurance company explained that the new “Affordable Care Act” caps the amount of money insurance companies can make. It explains that the new “80/20 rule” requires insurance companies to use at least 80% of premiums received from their customers for payments to health care providers. In other words the insurance company is prohibited from retaining more than 20% of its income from its customers. Once a year the company has to give its customers back any “extra” money the company has collected.

Understand, the 20% the insurance company retains must pay all corporate costs for running the company, including all employee salaries, sales, advertising, and all other overhead.

Our Federal government has decided that it is illegal to make “too much” profit.

I am not a fan of insurance companies. As an attorney I’ve heard more horror stories than you can imagine about insurance companies treating their customers poorly and committing outright fraud. However, these kinds of behaviors by companies, as well as the act of charging “too much” would be naturally limited if our government would allow the free market to be a free market.

If insurance companies were not regulated and restricted to the degree that they are, there would be MANY more insurance companies in the marketplace.Insurance is a pretty good business to be in, if it actually worked as “insurance” instead of the twisted quasi-governmental welfare program it has been forced to become.

If there were more insurance companies in the market, and they could adjust their prices to compete for customers without having to ask the government “Mother may I?” every time they make a change, then prices would stay at fair market values. This would happen without governmental intervention. Treating customers poorly would also stop because truly free markets naturally maximize benefits to customers.

Which brings me to the main point. This “80/20 rule” is just another aspect of Obamacare that was intentionally designed to force private insurance companies out of business. Why would any reasonable person stay in the insurance business when the government caps revenue at a point where the company can barely pay its own bills?

Before Obamacare it could be argued that governmental destruction of markets was unintentional, or at least it was not the goal. Now we have a Federal government that is actively, intentionally, purposefully trying to destroy a market so that the government can take over that market.

Congress didn’t have enough support for socialized medicine to simply outlaw private insurance. So, they made it impossible for insurance companies to stay in business.

If Obamacare is not stopped the government will quickly become the only provider of “health care.” It will then move on to another industry, and then another, and another. Capitalism has already been effectively outlawed for some sectors of our economy. If we don’t stop this trend, we will become the Soviet Union. Obamacare’s individual mandate proved that as the government takes over the economy, it will inevitably take away non-economic rights as we have seen in the loss of conscience rights for medical providers.

This is what is at stake here. Freedom, or slavery. Capitalism or Soviet Union style socialism.

Liberty Legal Foundation is still fighting to have Obamacare overturned in court. Please help us stop Federal government in its attempt to become our primary oppressor.


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