| Wednesday, August 14th, 2013 | | | | |  | | | Free Markets: Just What the Doctor Ordered | | | - Why you'll face higher out-of-pocket costs... while one tight-lipped witness sits on her tuchis and collects checks...
- Insurance providers laughing all the way to their yachts: how big insurers and the administration have you hoodwinked...
- Plus, Dr. Ron Paul on why the president is not, in fact, a socialist... and plenty more...
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| | | | | | | Riddle me this…
What superpower can turn small stock moves into big, BIG profits?
Do you think you have the answer?
| | | | | | | | Peter Coyne, examining a trail of breadcrumbs wending its way around Capitol Hill...
 | | Peter Coyne | Lois Lerner leaned back in her chair.
Her lawyer whispered into her ear. Then, once again, she returned to the microphone to say: "I will not answer any questions or testify about the subject matter of this committee's meeting."
"She gave an opening statement," congressional staffers whispered. "Can she even plead the Fifth now?" Papers ruffled. Camera bulbs flashed. As things quieted down, chairman Darrell Issa (R-CA) gave up and excused the witness.
The date: May 22, 2013. The scene: A House Oversight and Government Accountability Committee hearing. This particular hearing had long since reached the "broken record" stage. Lois Lerner had her legal advice... come hell or high water, she planned to stick to it.
"In February 2010, the Champaign Tea Party in Illinois," USA Today reported a week earlier, "received approval of its tax-exempt status from the IRS in 90 days, no questions asked." Over the next 27 months, not a single Tea Party application would be approved.
More than 300 political organizations -- many of them organized to oppose "Obamacare" -- had their applications for a tax-exempt status withheld in the Cincinnati IRS office alone. The applications spent anywhere from 18 months to nearly three years in the system... during the very months the Affordable Care Act was being debated in Congress.
Since pleading the Fifth, Ms. Lerner, a senior official at the IRS tax-exempt organizations division, has been on "administrative leave." She's not actively working... but she's still receiving an IRS paycheck.
Sarah Hall Ingram has a different story. Ms. Ingram, the former director of the IRS department in charge of tax-exempt organizations, claimed ignorance of the whole scheme... and was promoted.
"As a practical matter," Ms. Ingram said before all this hullabaloo, back in 2009, "we cannot subject every application for tax-exempt status to a painstaking, leave-no-rock-unturned review. Nor can we audit every organization's 990 every year. Nor would you want us to do so, right? To govern is to choose, and we must choose appropriately which applications or 990s to focus most attention on."
In hindsight, we're only left to assume she chose not to focus on applications from those groups who, at the time, opposed the new health care legislation.
Several months before the committee hearing, Ingram was promoted to head the IRS Affordable Care Act office in Washington -- the very same office you'll have to deal with if you fail to comply with the Obamacare legislation.
[A brief moment for you to follow the breadcrumbs yourself...]
Coincidence?
Perhaps.
Yesterday, the Obama administration announced a delay in the cap on "out-of–pocket costs" associated with the new plan. The third such delay.
The out-of-pocket cap was a major selling point for the law's supporters. Individuals would have had their deductibles and copays limited to $6,350. Families were supposed be capped at $12,700. Now beneficiaries of the cap will have to wait until 2015.
In the meantime, they could pay up to twice those amounts on both doctors and filling prescriptions. Apparently, insurance companies say their computer systems won't be able to jibe with the rule in time.
How convenient.
For its part, the House of Representatives voted to cleave the IRS' role from Obamacare two weeks ago. The vote passed 232-185... but it's a symbolic gesture because party leaders have already vowed a similar vote will never reach the floor of the Senate.
How did the IRS get involved in implementing and enforcing a health care law in the first place? That's a good question.
"This is your government in action in anno Domini 2013," Dave Gonigam suggested in yesterday's 5 Min. Forecast. "Contra Nancy Pelosi three years ago, even passing the bill doesn't guarantee 'that you can find out what's in it.'"
"You Yanks threw out the baby with the bath water," interjects one reader from Toronto, "and now you are complaining. The U.S. is alone -- or just about alone -- in having a multipayer system, controlled by ultra-greedy providers. No wonder the thing is a horror."
Heh.
Politicians and insurance companies alike came together to create this Frankenstein piece of legislation... and have all but doomed it to failure from the get-go. And thanks already to the administration's delays, large employers and health care providers are giving each other high-fives.
"A careful examination of the policies pursued by the Obama administration," writes our guest essayist today, "shows their agenda is corporatist." In today's episode of The Daily Reckoning, Dr. Ron Paul corrects Obama's misdiagnosis of rising medical costs in the U.S. and writes his own prescription to fix the health care system. Read on below...
[Ed. Note. If you can, chuck your left-right political ideology for a moment. There are many ways you can lower your medical expenses starting today. We've spent over five months researching each of them for you. You do, however, need to act before some of Obamacare's most egregious changes take effect. Here's what to do, and when.]
[Add'l Side Note: We've been asking for your dream retirement numbers this week. There's more than a $4.5 million difference between what "average" Americans have saved compared with what you're telling us you need to live a dream retirement.
That's why, starting tomorrow, we'd like to introduce you to something we call the "30-Day Retirement Plan." In short, it's a way to start with just a few hundred dollars and turn that stake into your dream retirement number ($4,514,076) in just 30 days.
How? Well, it has to do with a hidden subniche of the markets -- a niche that most of Wall Street actually can't touch (that's why you've probably never heard of it). Keep your eyes trained on this space in tomorrow's episode for details.]
| | | | | | | External Advertisement
This Man Got $3,195 in Tax-Free Income
Bert Hoff is a native of Seattle, Washington. He's using a tax law loophole to boost his income. And even though he's brand-new to the whole process, Bert's already picking up an extra $800 every few months in guaranteed tax-free cash.
In his first full year, Bert will take in a little more than $3,195. In his second year, he's set to bank upwards of $4k.
| | | | | | | | The Daily Reckoning Presents
| | | | Free Markets: Just What the Doctor Ordered | | | | by Dr. Ron Paul | | | Lately, many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility toward the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.
Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design policies that give those interests a monopoly position, to the detriment of both competitors and consumers.
A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill does not establish a Canadian-style government-run single-payer health care system. Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care "exchanges."
Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.
To call the president a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the president's agenda.
When he is a called a socialist, the president and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the president's policies, industry remains in nominally private hands. Using the more accurate term -- corporatism -- forces the president to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. This also promotes the understanding that though the current system may not be pure socialism, neither is it free market since government controls the private sector through taxes, regulations and subsidies, and has done so for decades.
Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place.
Government is the problem; it cannot be the solution.
The fundamental problem with health care costs in America is that the doctor-patient relationship has been profoundly altered by third-party interference. Third parties, either government agencies themselves or nominally private insurance companies virtually forced upon us by government policies, have not only destroyed doctor-patient confidentiality. They also inescapably drive up costs because basic market disciplines -- supply and demand, price sensitivity and profit signals -- are destroyed.
Obamacare, via its insurance mandate, is more of the same misdiagnosis.
Gabriel Vidal, chief operating officer of a U.S. hospital system, sees this problem squarely in his daily work. As he explains, Obamacare will only make matters worse because it fails to recognize that "costs are out of control because they do not reflect prices created by the voluntary exchange between patients and providers... like every well-functioning industry."
Instead, "health costs reflect the distortions that government regulators have introduced through reimbursement mechanisms created by command-and-control bureaucracies at federal and state levels," he continues. "But it is theoretically and practically impossible for a bureaucrat -- no matter how accurate the cost data, how well-intentioned and how sophisticated his computer program -- to come up with the correct and just price. The (doctor-patient) relationship... has been corrupted by the intrusion of government and its intermediaries (HMOs, for example) to such an extent that we can no longer speak of a relationship that can produce meaningful pricing information."
Absent such pricing information, our system increasingly resembles socialist systems with centralized price setting, shortages, rationing, apathy and declining quality of care. As the situation deteriorates, fewer bright young people want to practice medicine and fewer foreign doctors seek to immigrate.
The problem is acute and worsening. Obamacare's third-party insurance mandate is only the first step toward what the political left really wants: a single-payer government health care system.
Meanwhile, conservatives seem resigned to a third-party insurance system and therefore fail to present a viable alternative to the American people. They continue to speak in terms of saving the health care "system," when in fact what America needs is a rejection of all government systems in favor of free market mechanisms.
| | | | | | | Could This Completely Derail The Gun Control, Obamacare, and Internet Sales Tax Debates?
It's shocking stuff. Bigger than anything you might hear on Talk Radio.
A Florida-based computer expert is breaking an incredible story. Perhaps the biggest political story of the next decade.
In short, the last five years of the Democratic Party's agenda could be undone.
Gun control. ObamaCare. Internet sales taxes. All could be rendered irrelevant. Sooner than anyone thought possible before…
For obvious reasons, you likely won't see this story picked up in mainstream media outlets.
Instead, this whistleblower is putting everything he discovered up in a free video.
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In a free market, most Americans would pay cash for basic services and maintain inexpensive high-deductible insurance for catastrophic injury or illnesses only. Health insurance would be decoupled from employment, which would unleash entrepreneurs who now fear quitting their jobs and losing their health insurance. Costs would plummet due to real competition among doctors, price sensitivity among patients and elimination of enormous paperwork costs. Doctors would be happier, spending their time treating patients, rather than managing their practices.
Congress needs to let markets work by aggressively repealing health care laws, including: the HMO Act of 1973, the Medicare Part D prescription drug benefit passed in 2003 and the Obamacare bill passed in 2010. Furthermore, we must begin scaling back Medicare coverage altogether for younger generations so they will not rely on a system that cannot remain solvent in future decades. Only by taking these steps now can we begin to undo the harm done by government to the once noble field of medicine.
Instead of mandating the same failed entitlement health care schemes that are bankrupting Europe, Congress should fundamentally re-examine the case for free market health care. Our current model, based on employer-provided health insurance, did not arise based on market preferences. On the contrary, it makes no sense to couple health insurance with employment. But federal wage and price controls instituted during World War II left employers with no alternative to attract workers in a tight labor market other than offering extra benefits such as health insurance and pensions. Over time, these nonwage benefits became the norm, especially since employers could deduct the cost of health insurance premiums from their income taxes, while individuals could not. The perverse consequence is that employees lose both their paychecks and their health insurance when they lose their job.
As reliance on third-party health insurance grew, patients became detached from the true costs of their doctor visits. In the 1970s, the Nixon administration, along with the late Sen. Edward Kennedy, championed the cause of health maintenance organizations (HMOs). Congress accepted the faulty premise that HMOs would reduce costs through centralized management of patients, when, in fact, the opposite was true: More bureaucracy would only lead to higher costs, less accountability and worse patient care.
In recent years, Congress has only intensified the problem with more laws and more regulations, especially with the disastrous Medicare prescription drug benefit. The drug benefit was another example of naked patronage to a politically connected industry, and it exponentially worsened the federal government's balance sheet. Obamacare will be the last nail in the coffin of our bankrupt entitlement system.
More laws are not the answer. Instead, we need to allow a market system to operate that reflects consumer choices while rationally pricing services. In a market system, patients likely would pay cash for basic services while maintaining relatively high-deductible catastrophic insurance for serious illnesses and accidents. The cost of most routine medical care would drop if the patient paid the bill on the spot, especially if doctors no longer needed to employ large staffs solely to deal with insurance and billing.
Let me repeat: We need a system in America where patients pay cash for basic services, and carry insurance only for serious illnesses and accidents. "Health maintenance" is the responsibility of each of us individually. We cannot continue to collectivize the costs of health care and expect things to get better.
Authoritarianism is bad for your health. Congress should end the Obamacare mandate and allow market-based medicine to flourish.
Regards,
Dr. Ron Paul
for The Daily Reckoning
[This essay is a compilation of Dr. Paul's thoughts on the Affordable Care Act during his time in Congress.]
[Ed. Note: For all the mandates that come with Obamacare, there are ways to "opt out" of the system -- ways we detail in our special report, The Obamacare Antidote: 6 Ways to Get the Best Health Care of Your Life and Save up to $2,000 per Year.
These aren't pie-in-the-sky theoretical solutions. We're already getting notes of thanks from readers like you who've put our advice to work. "I was putting off a lipid panel since I had lost my insurance last year," one writes, "and a walk-in clinic wanted $75 for an office visit plus another $75 for the test."
After reading our report, he sought out an online provider we recommend. "Bought the full panel on Monday. Drew blood at a lab five minutes from my house on Tuesday. Got the results this morning (Wednesday) at 10 a.m. Total cost: $43.19!
"An excellent report with all working links (I clicked and saved them all)."
The report is free to all members of the Laissez Faire Club. You can join their ranks right here.]
| | | | | | |  Dr. Ron Paul is a former Republican member of Congress from Texas and the author of The Revolution: A Manifesto, End The Fed, Liberty Defined, and Farewell to Congress. | | | | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
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