‘Oracle of Omaha’ Still Has His Blinders On
Last week Warren Buffett, the man acclaimed the Oracle of Omaha and the savant who endorsed Barrack Obama in the 2008, weighed in on the Democrat health care “reform” plan and confirmed once again that he’s incapable of subordinating his progressive impulses to the dictates of common sense.
To wit, his statement in a CNBC interview when he said that “if it was a choice today between Plan A, which is what we've got, or Plan B… the Senate bill, I would vote for the Senate bill. But I would much rather see a plan C that really attacks costs.”
I thought that the whole point of the Democrat plan was to reduce health care costs. Wasn’t it President Obama who said that we couldn’t fix the economy until we got health care costs under control?
Mr. Buffett’s observation that the Obama-Reid-Pelosi plan will do nothing to control costs isn’t news to anyone who’s followed the now year-long debate on health care “reform”. What is news is Mr. Buffett’s confession that the "[Democrats] came up with a bill that really doesn't attack the cost situation that much” while still continuing his support for the folly that is health care reform.
How come the media isn’t all over this?
Sorry. Dumb question.
Despite his refusal to come out in opposition to the Senate bill, at least Mr. Buffett has confirmed, albeit in the eleventh hour, what conservatives have been saying all along: There’s no real “reform” in health care reform.
Rather than restoring the market conditions that would “bend the cost curve downward”, the Democrat plan doubles down on entitlement spending and increases the demand for health care services without doing anything to improve supply.
In fact, the Senate bill that Nancy Pelosi is so desperately trying to get passed in the House is a prescription for significantly higher health care costs in the years ahead.
Here’s why the Democrat plan will make health care more expensive:
- It perpetuates an expensive, dysfunctional insurance model. Instead of allowing consumers to purchase low cost major medical insurance to protect against the consequences of a high cost illness or injury, the Democrat plan effectively outlaws this approach in favor of an insurance model that provides coverage for even to most routine health care purchases. It’s like having homeowners insurance that pays for cutting the grass! This isn’t insurance, it’s overpriced pre-paid medical care that will inevitably lead to higher levels of consumption and shortages in supply.
- It discourages competition between insurance companies and limits choice. Instead of promoting competition by allowing insurance companies to sell the kinds of policies people want to buy (think major medical), the Health Choices Czar will dictate mandatory benefit packages and force every insurance company to sell what is essentially the same product. Insurance carriers will be reduced to the status of public utilities and will have no ability to differentiate themselves in the marketplace by offering a selection of products at a variety of price points.
- It leads to adverse selection in the risk pool and higher insurance premiums. Although the Democrat plan imposes an (unconstitutional) individual mandate requiring everyone to purchase health insurance, the penalties for those who refuse coverage are so light that many will simply opt out. Coupled with the “guaranteed issue” provision in the legislation that forces insurance companies to accept those with preexisting conditions, there’s a strong incentive under the proposed plan for healthy people to avoid buying insurance until they’re sick and need medical care. As a result, risk pools will tend to attract more of the chronically ill, which will cause premiums to increase, which in turn will cause increasing numbers of healthy people to drop their coverage altogether. In the end, only those whose premiums are heavily subsidized by the government will be able to afford insurance.
- It produces massive cost shifting onto the private sector. President Obama and the Democrats continue to tout deficit reduction as a key selling point of their health care plan. Even though it’s a fiction, they make this claim believing that many Americans will equate deficit reduction with cost reduction. But they are not at all the same thing. Under their plan, deficit reduction is accomplished largely with taxes on health care purchases (high value insurance plans, medical devices, over-the-counter drugs, etc.) and Medicare spending cuts that slash hospital reimbursement rates, both of which will result in significant cost shifting back to the private sector. This shell game may reduce the deficit, but it will drive up insurance premiums and increase costs for consumers.
The American people have grown weary of the debate over health care. They are fatigued by the effects of a severe recession and frightened by the prospects of a diminishing prosperity. Now is not the time to impose major social change via legislative fiat; change that will fundamentally alter the relationship between government and the people.
The cynical among them are so distrustful of the Democrat’s motives that they believe the only purpose behind the reform agenda is to make health care so bureaucratic, and health insurance so expensive, that the only option eight or nine years from now will be single payer, universal health care.
What’s happening in Washington D.C. – the disinformation, the pandering and the manipulation of the legislative process – is fundamentally corrupt. If Democrats succeed in forcing through their health care legislation it will foment a level of resentment that will poison political discourse in this country for the next twenty years.
When the voters elected President Obama they thought they were getting a post-partisan centrist who would fix the economy and govern as a moderate. His message of “change you can believe in” was a pledge of accountability and a promise to the American people that he could be trusted to do the right thing.
President Obama needs to reflect on that promise and on his duty to the American people.
President Obama needs to do the right thing and stop forcing change on a nation that wants no part of it.