Tags: nfip | flood insurance | obamacare

Obamacare's Future Same as Failed National Flood Insurance Program

Image: Obamacare's Future Same as Failed National Flood Insurance Program
(AP Photo/Kathy Willens, File)

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Tuesday, 18 Jul 2017 04:36 PM Current | Bio | Archive

Where have you heard this before? There’s a federal insurance program designed to protect citizens from catastrophes that can devastate families. A program fashioned by experts who employed "best practices" as they formulated and priced this vital insurance protection.

Naysayers contended the federal government had no role in this market. Proponents said government is supposed to protect citizens from potential disaster and it’s heartless to abandon people and leave them subject to the tender mercies of the market.

Now it looks like the wretched naysayers were correct. The entitlement is plagued by users, with pre-existing conditions, who repeatedly cycle in and out of the program. These frequent flyers drive up costs and their premium dollars don’t begin to cover the government’s outlay.

Combined premium income from the entire coverage base falls short year after year forcing the program to run a deficit that won’t ever be reduced.

The combination of an unfavorable cost structure and unrealistic coverage requirements have forced private sector insurance companies to abandon the market, leaving the feds as the insurer of first and last resort.

Now you’re thinking you’ve seen this movie before. You know that under Obamacare limited government dies a lingering death.

But this isn’t Obamacare.

The National Flood Insurance Program is an earlier intrusion into the insurance marketplace where Uncle Sam bet against the rain and lost. NFIP should have served as an obvious warning. That’s one benefit of the federal colossus. It’s so large and so meddling that if you look hard enough there’s surely a program from the past that has a lesson for today.

Our problem is no one bothers to look. America’s elected and appointed "leadership" is so intellectually lazy or blinded by ideology that no one bothers to examine past results.

Particularly if those results might reflect poorly on their current hobbyhorse.

Just as the Veterans Administration is the failed pilot program for government single-payer healthcare, the equally disastrous National Flood Insurance Program is the pilot program for Obamacare, had anyone in the know-it-all Obama White House bothered to look.

The Washington Post — whose writers are immune to irony or analogy — wrote about the travails of the flood insurance program at the same time the Curator of the Senate, Mitch McConnell was trying to replace Democratic interference in health insurance with Republican interference.

Neither group noticed the similarities in the two programs.

Pre-existing conditions in the flood insurance market are homeowners who built on a flood plain and sure enough, get regularly flooded. Case in point is Leni-anne Shuchter. She’s been filing claims since the Reagan Administration! She doesn’t even have to buy wallpaper any more. Leni-anne can just use canceled federal insurance checks to cover the dining room.

The bureaucrats at FEMA have concocted a term for frequent filers: "Severe repetitive loss property." What they haven’t concocted is a solution.

In Houston there’s a dwelling that’s the housing equivalent of the Obamacare morbidly obese individual who smokes, tokes, and injects opioids. It’s worth $72,400 and "has received more than $1 million in payouts — nearly 15 times its assessed value."

FEMA estimates there are 11,000 pre-existing claimers nationwide. This tiny fraction of the 5 million total policyholders accounts for 30 percent of the program’s claims.

The solution for Shuchter and the Houston homeowner that FEMA missed isn’t a "reformed" insurance program. The solution is requiring "severe repetitive loss" homeowners to follow the same advice the late comedian Sam Kinnison gave repeat famine victims in Ethiopia, "MOVE!"

When a car owner experiences a crash that extensively damages his car, the insurance company doesn’t pay to rebuild it. Instead it declares the auto a total loss and gives him a check. Once a homeowner has filed say two flood insurance claims, the next one should trigger a total loss clause and a visit from Bekins.

Private insurance companies left the flood market because they weren’t going to continue to pay for losses to homes built where the fish and the antelope play. It takes a politician to volunteer for that duty. And once politicians have assumed the job the burden gets passed on to taxpayers. Congressional vote buyers now demand that 20 percent of the policyholders pay below-market premiums, so it’s no surprise NFIP has a debt of almost $25 billion that it will never be able to cover.

The lesson of the NFIP is Congressional policy makers are incompetent businessmen. They allow a stubborn fraction to burden the vast majority with their bad decisions and politicians lack the courage to change the situation.

$25 billion in debt might be a cheap lesson if someone realized the NFIP is Obamacare’s future unless it’s repealed. Unfortunately, no one is paying attention.

Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.

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MichaelShannon
$25 billion in debt might be a cheap lesson if someone realized the NFIP is Obamacare’s future unless it’s repealed. Unfortunately, no one is paying attention.
nfip, flood insurance, obamacare
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2017-36-18
Tuesday, 18 Jul 2017 04:36 PM
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