Just as the Affordable Care Act (ACA) was a knee-jerk response to rising health insurance costs, the events that led to those inflated costs were congressional hasty responses to yet other events affecting the economy since World War II.
The war years
It all began innocently enough when Congress approved the Emergency Price Control Act (EPCA) of 1942, which set the price for goods, services, wages and salaries at their Sept. 15, 1942 level.
Attempts to directly control the economy never end well. They always include unforeseen circumstances. This was no different. Employers couldn’t attract and retain workers at the wages that lawmakers set, so Congress followed up with the Stabilization Act of 1942, which excluded from wage controls "insurance and pension benefits in a reasonable amount to be determined by the president."
Accident, health and hospitalization insurance was nothing new in the United States, but Congress and then-President Franklin Roosevelt gave it a boost by exempting such employer-provided benefits from payroll taxes while offering employers a tax deduction.
No such tax deductions were provided for those who purchase individual plans for themselves and their families, however. After all, health insurance was the exception — not the rule.
But decade of the 1940s saw health insurance policies explode from fewer than 10 million to more than 80 million. As of 2012 about 61 percent of Americans had private health insurance, according to the Centers for Disease Control and Prevention (CDC). ( But the private individual seeking insurance is still given no tax advantage.
Later, and in response to U.S. vs. South-Eastern Underwriters Association, 322 U.S. 533 (1944) a decision that addressed price gouging and monopolies and placed insurance companies under control of the Commerce Clause of the Constitution, Congress approved the obscure and McCarran-Ferguson Antitrust Act of 1945.
This legislation gave states the power to regulate the insurance industry, but it had the unintended consequence of preventing individuals and employers from purchasing insurance across state lines, thus preventing interstate competition among insurance carriers.
In response, Rep Paul Gosar, R-Ariz., introduced H.R.372, the Competitive Health Insurance Reform Act of 2017. It would repeal the McCarran-Ferguson antitrust exemption for health insurers, while leaving it in place for other types of insurance, such as property-casualty and life.
The House approved the measure in March and was sent to the Senate.
LBJ’s Great Society: A pact with the devil
Part of the series of domestic programs known as The Great Society launched by former President Lyndon B. Johnson, Medicare came into being in 1965 to provide medical care for the aged through the Social Security Act. The following year, the Medicaid program was established to provide medical care for welfare recipients of all ages.
But the problem of financing both programs was soon revealed. Medicare was to be financed in part through each employee’s FICA taxes withheld from his paycheck. Medicaid would be administered by the states but financed through the federal government.
In order to soften the blow to the taxpayer, medical providers made an agreement with the devil.
"A grand deal was struck between the government, insurance companies and doctors that private insurance companies would overpay for medical services so that Medicare and Medicaid could pay much less,” medical services administrator Marion S. Frank observed.
As a result, those who play by the rules and provide for their families by purchasing health insurance so as to avoid being a drain on society, are ultimately paying the brunt of the costs. The only way private insurers can overpay for services is by overcharging for policies of insurance.
Even many Democrats agree that Obamacare is a complete disaster. Former President Bill Clinton called it "the craziest thing in the world," observing that the true victims of the the ACA were the hard working Americans bearing the brunt of its costs. Gov. Mark Dayton, D-Minn., said “the Affordable Care Act is no longer affordable.”
Correction. It never was affordable to middle America; it’s very affordable to those who know how to game the system by taking advantage of subsidies — paid for courtesy of middle America. As the proverb, possibly first uttered by Saint Bernard of Clairvaux, says, "The road to hell is paved with good intentions."
It’s no different with respect to healthcare. Each step of the road to Obamacare was a measured response by Congress to a perceived crisis, with the end result being an excessively expensive and in many cases a useless health insurance plan.
In May of this year, syndicated columnist Charles Krauthammer predicted that within seven years the endgame for America would be the rationed healthcare of a single-payer, government-controlled system — just like Canada.
The way things are proceeding on Capitol Hill, I can’t argue with that, and I trust his crystal ball more than I do that of Congress. If he’s right, it would would be a shame. Where would Canadians go for medical services?
Michael Dorstewitz is a retired lawyer and has been a frequent contributor to BizPac Review and Liberty Unyielding. He’s also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter, who can often be found honing his skills at the range. To read more of his reports — Click Here Now.
© 2022 Newsmax. All rights reserved.