The Obamacare monopoly

In practice, Obamacare creates a government monopoly due to favoritism of companies which join the exchanges. Photo: AP

WASHINGTON, October 3, 2013 — Health insurance companies fortunate enough to be integrated into the Obamacare exchanges and rollout are benefitting at the expense of taxpayers. In practice, the Affordable Care Act has created a taxpayer-sponsored monopoly.

The Affordable Care Act forces all Americans to either buy health insurance or pay a fine. When the government legally compels people to buy a specific product or service, the seller will see a drastic increase in profit.

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The U.S. government is spending millions in taxpayer dollars to advertise Obamacare on television, in magazines, and more. The beneficiaries of these advertising dollars are not the taxpayers, but the health insurance companies that participate in Obamacare exchanges.

These health insurance companies are promoted to consumers, and will be more easily accessible than those which function privately off the Obamacare exchanges. Companies that do not join the exchanges will not benefit from the millions in tax dollars spent to promote Obamacare, and will not receive the free — to them — publicity received by companies that play ball with the Obama administration. In the same way a powerful monopoly prioritizes and promotes its subsidiaries, the government is helping companies which are in its exchanges.

You will only be eligible for the tax credit accompanying Obamacare if you enroll in health insurance through an Obamacare exchange. This means that companies which do not participate in the government exchanges are at a disadvantage.

This also means whenever a government official touts the Obamacare tax credit, he is advocating that you drop your non-exchange policy to buy your insurance on an Obamacare exchange.

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Obamacare creates incentives for people to abandon private insurance markets and join the government-controlled, subsidized exchanges — in essence, a cartel. Consumers will naturally want to follow the tax credits when possible. The government will thus push firms in the free market to the periphery and promote the growth of a protected cartel.

Aetna has opted to remain a private business and not participate in the Obamacare exchanges in numerous states. In those states, people on Aetna plans will be ineligible to receive the subsidies people on Blue Cross Blue Shield (BCBS) — which functions in Obamacare exchanges — receive, and Aetna will probably lose customers to companies like BCBS, which have worked closely with the Obama Administration.

Some states will see dwindling options. Rep. Renee Ellmers, R-N.C., told The Daily Caller that due to Obamacare, the majority of North Carolinians will only have access to one plan in the Obamacare exchange: BCBS. 

BCBS has worked closely with the Obama Administration and Enroll America, a 501(c)(3) close to the White House that seeks to maximize enrollment in Obamacare. The web that connects those three includes: a BCBS executive on the board of Enroll America; the appointment by Health and Human Services Secretary Kathleen Sebelius of BCBS Louisiana Senior Vice President to the National Committee on Vital and Health Statistics (NCVHS); and the possibility “that Sebelius may have solicited funding … from the health care industry to help implement [Obamacare],” according to the House Energy and Commerce Committee.

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Obamacare benefits health insurance giants. Government subsidization of some companies in a market, but not all, amounts to a government-sponsored monopoly. The government, and only the government, has the power to create a near monopoly by legislative fiat, and the resources to launch a national marketing campaign across all forms of media to convince everyone that monopoly is competition. The government is picking winners and losers in the health insurance industry.

Monopolies eventually reduce the quantity of a product and then sell at a higher price. We can expect decreased health insurance selection and coverage, diminishing quality, and higher prices. This is why the government ought not to be involved heavily in free markets, except to prevent monopolies and to ensure that companies are competing in free and open markets. 

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