Monday, August 06, 2018

Murphy’s Plan To Destroy The Insurance Industry

Nearly a year ago last September, U.S. Senator Chris Murphy unburdened himself to Vox reporter Jeff Stein. Vox Media is a reliably progressive site launched in 2014 by founders Ezra Klein, Melissa Bell, and Matthew Yglesias.

Stein titled his 2017 piece “Sen Murphy thinks he can build an on-ramp to single payer health careand provided a helpful single line summary: “The Connecticut Democrat will advance a plan he argues ‘may be the fastest way to a single-payer system.’”

Socialist Bernie Sanders had just extruded a bill that would “create a single government insurer to give Medicare free of charge to everyone in the country with virtually no copayments and no-deductibles.” Quarrelsome free-marketers argued that there is no such thing as a free lunch; a federal insurance program – which would necessarily displace insurance companies – would not be free. Both the Sanders and Murphy plans are tax supported universal health care systems that would cost, some attentive healthcare analysts think, upwards of $30 trillion over a ten year period and a likely annual tax increase of $26,000 per American household – not exactly pocket change.

The elimination of insurance companies which, under a Sanders universal health care system, would simply disappear – and good riddance to them – did not seem to disturb Murphy, who hails from a state that used to be called the insurance capital of the world and which still employs a goodly number of insurance workers. Connecticut still ranks first nationally in insurance carrier employment as a percentage of the state’s total employment, 3 percent.

Murphy told Stein, “… he may wind up co-sponsoring Sanders’s bill…  ‘If I were building a health care system, from scratch, I’d start with a single-payer system.’”

Murphy noticed a fly in the Sanders socialist ointment however. Connecticut’s Junior Senator was concerned that a rapid and irrecoverable destruction of insurance companies might be too shocking for people less progressive than he. And so he proposed what Vox called “a third way” in which the insurance companies, like lobsters, are mercifully dispatched in pots of water, the temperature of which is gradually raised to boiling so that the lobsters are spared a quick and painful death.

Here is Murphy’s idea, according to Vox: “Allow every American, both individuals and companies, to purchase Medicare. Murphy’s hope is that if enough people purchase Medicare — and Murphy is confident they will en masse if they can — then the private health insurance would begin to shrink gradually. As a result, the government will swallow more and more of the private health insurance markets, setting up the trajectory for achieving a single-payer system.”

The problem is not that a single payer system will provide fewer and more inferior services, or that it will over a period of time become nearly as expensive and much more poorly run than the current free market system, or that a single payer system effectively eliminates the kind of competition among healthcare providers that serves to restrain autocratic price and tax increases, or that, once destroyed, the private market in insurance cannot be re-installed; once lost, the private insurance market will be permanently lost.

No, the problem with Sanders’ health care reform is that it is politically awkward. “I have a feeling,” Murphy told Stein, that “if everybody could buy into Medicare, people would choose to do so — and then you’d naturally transition to a single-payer system without a massive political fight.” Murphy’s third way envisions a very gradual destruction of the nation’s largest private sector industry employer. Health care accounts for 13 percent of the total U.S. workforce, having surpassed manufacturing in 2003 and retail trade in 2007.

It’s perfectly obvious that just as Obamacare was a baby step in the direction of universal healthcare, so is Murphy’s "third way" a progressive vehicle that leads in the same direction. Indeed. Murphy’s preference for universal healthcare is unambiguously indicated in his Vox Media interview. The progressive march towards universal healthcare cannot advance without the slow evisceration of the insurance business. Drawing on tax resources, the federal government will simply underprice the cost of insurance until private providers are driven from the field.

It is not obvious from the contributions to Murphy’s reelection campaign that contributors know the Senator is braiding a rope with which he and Sanders will string up financial executives, for the transformation of such a large portion of the private economy will affect every business sector, including the finance wizards contributing mindlessly to Murphy’s campaign which, even now, is bursting at the seams. According to Open Secrets, Murphy has raised $13,341,538 from 2013 – 2018 and has $8,471,202 cash in hand for his reelection, after which he will begin in earnest to transform the national economy. And anyone who believes that his campaign coffers are swelling from contributions made by the proletariat without the assistance of high priced lawyers, financial gurus and even doctors, is a sucker born yesterday.

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