As he was leaving office, Dwight Eisenhower felt a responsibility to warn the nation of coming threat from within, “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex.” These turned out to be words booth wise and unheeded, as our military expenditures now total nearly that of the rest of the combined nations of the world.

I’m seeing a new threat from within, rising and to some extent already risen. The risk management industry, with insurance companies at its core, has wormed its way, insidiously and  in many layers, throughout nearly every industry and organization in these United States. This cancer has grown much deeper, though through much the same mechanism as the military industrial complex; by taking advantage of fear, both that of the general populace and corporate and government entities.

A friend of mine recently posted a saying: “A book is the only thing you can buy that can make you richer”. I would argue that another profitable purchase would be a Congressman. While I do think there are some career fence sitters in office who pretty much just vote in whichever direction offers them the most favors, I like to think most individuals in government feel like they are doing the right thing, though I think getting to that coveted and contested office nearly requires one to be of the opinion that the ends justify the means, and that it would be distasteful to look too closely at how the sausage was made.

Unlike these individuals, organizations, such as corporations, unions, and political parties, are generally run or heavily influenced by committee and legal advisers. The people of these committees see it as their job to do what is in the interest of those they represent. If, for example an industry of large donors made it clear that their donations to a political party would keep coming so long as the party voted in their favor, then it is quite likely that the party would choose to endorse candidates who have agreed to vote accordingly. They justify this by telling themselves that if they don’t go along, then the other party will, and will win, which logically they would see as being a worse choice than taking the support themselves and  then trying to enact their own ideology. The beauty of this situation from the donor’s perspective is that they really can’t lose. All they need to do is give support to both sides and threaten to withdraw it from the one who gives them the least in return.

These days, everyone in business is obsessed with avoiding liability. The blame usually comes down on people who start frivolous lawsuits, but really, the system is designed to encourage such things. There are three main players in this: businesses trying to avoid being bankrupted by a large lawsuit, insurance companies trying to sell coverage without actually having to pay anything out, and the individual or government agencies trying to get money for a perceived violation.

Kaufman’s Law: A policy is a restrictive document to prevent a recurrence of a single incident, in which that incident is never mentioned.

Business will hire people to keep track of regulations and create appropriate policies, and it isn’t just legal regulations they are following. Insurance companies have their own regulations, some of which must be followed to get coverage, and others which will nullify their responsibility to pay if they are not followed. The nature of such preventative policies is that they raise both the cost and the complexity of doing business to the point where it is nearly impossible for a small business to be competitive. The regulations have gotten so thick that no one even knows them all. This is of course fine with government and insurance companies alike, since anyone not knowing they have violated a regulation is still going to end up paying a fine or be denied coverage as a consequence.

The profit motive of insurance companies should not be discounted. If nothing else, the mere fact that they are profitable means that they are an inefficiency in the system, a middleman who increases wait times, and decreases care options. Obamacare pretends to be a cost saver in the system. The early claims were that it wouldn’t raise costs to taxpayers, that the healthy would be made to pay for the sick. I was disgusted to read this piece of economic ignorance on CNN Money:

“Getting subsidy-eligible people to enroll is important for the overall success of the exchanges. The first to sign up are likely those desperate for health insurance, so they are a sicker and costlier population. They’ll pay for insurance with or without subsidies. But they must be balanced out by younger and healthier folks, many of whom are likely to be enticed by subsidies, experts say. The subsidies were expected to be very popular: The Congressional Budget Office projected that 86% of the 7 million people enrolling in the exchanges for 2014 would be eligible.”

The second problem is one of outreach. Many people, particularly among the lower income, don’t know that they are eligible for subsidies or even that they have to sign up for insurance, said Dan Mendelson, chief executive of Avalere Health, an advisory company for insurers.
“This requires aggressive messaging,” he said. “They need to go into these communities and get them to sign up. The president has been spending his time apologizing.”

So first, the healthy were going to be made to pay for the sick. Now the healthy will have money taken out of their taxes and handed back to them, only to be forced to give it to the insurance companies. And then there is this article in Businessweek, showing that there is a provision in the bill making sure that if the insurance companies find their costs to be too high, that the government will backstop their losses, and also that there are cost saving measures set to make everything seem cheaper at the beginning, which fade out after three years.  Combine this with the website problems and various postponements, and it really looks to me like they are trying to stall until the midterm elections and put forward the appearance that things are great and they are just working out a few minor glitches, rather than making a bubble that will lead to bailing out the insurance companies that we have already paid three times over.

How many times over do we need to pay for our health care? Back in the day a patient went to the doctor with an ailment, saw them promptly, made decisions between the two of them and then the patient payed a reasonable fee. Now we pay insurance companies, our doctors and hospitals pay insurance companies, the government pays insurance companies, and in return, the insurance companies make us go to a doctor who is in their network, they decide what care to pay for, and if you have a problem with your bill, they leave you on hold until the creditors show up. And if that weren’t bad enough, we can’t even wash our hands of the whole thing and take care of ourselves. We’re mandated to pay for the care we don’t use.