The Wall Street Journal reported today [pay site] that the Department of Health and Human Services is urging hospitals and pharmaceutical companies not to buy Obamacare benefits (aka “health insurance”) for poor individuals. Why? Because the internal contradictions of Obamacare have created a conflict of interest.

The hospitals, the drug companies, the government, and the insurance companies are facing off in a circle of mutual robbery.
 A hospital can sign poor, sick patients up for Obamacare and pay the premiums these people would otherwise have to pay themselves. The hospital would end up paying as little as $100 per month, or $1200 per year, once all the subsidies are taken into account. Then, those people's hospital bills will be paid by the insurance companies participating in the scheme—hospital bills worth much more than $1200—hospital bills that the patients themselves would never have paid.
The insurance companies can't refuse to accept these sick people because Obamacare mandates “guaranteed issue.” And they can't charge high rates for these sick people, because Obamacare mandates “community rating,” one price for all. But if the companies get mostly sick people signing up for Obamacare, they'll go bust unless the rates they charge get raised —a lot! This is one of the internal contradictions of Obama’s scheme.
 understanding obamacare
Why is there a conflict of interest? Because Obamacare destroys the freedom on which honest, win-win trade is based. It means that one sick person's health care benefit comes from robbing other healthier, wealthier people. It means that the hospitals, the drug companies, the government, and the insurance companies are facing off in a circle of mutual robbery.
Imagine if a supermarket, like Kroger or Safeway, decided to pay for all the groceries some of its customers wanted. There would be no conflict of interest: all donations would come out of the supermarket’s pocket: not a penny more or less. And the supermarket could never prosper financially from doing this: no one else would be footing the bill. That's the way it would work in a free market.
If we had a free market in health insurance, insurance companies would be thrilled if hospitals would subsidize their patients' health insurance. Of course, the price of insurance for any individual would reflect his actual expected health expenses, so there would be no appreciable difference between the cost of caring for that individual at the hospital and the cost of his insurance. There would be no robbery and no conflict of interest.
Fans of Obamacare like to argue that one great thing about it is that millions of uninsured poor people will have their medical bills covered . But if too many poor, sick people sign up, insurance companies are screwed and the whole system collapses.
A system that must beg people not to sign up is a sick system. The cure for ObamaCare is freedom. The cure for the idiocy that created Obamacare is reason.


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