"The capitalists will sell us the rope we hang them with." ~Vladimir Lenin

No government program designed to help the poor or disabled should be used to create a private monopoly cartel that hurts Americans. With that in mind, it’s easy to see why the absolute worst thing Republicans can do in health care is to funnel even more money into the insurance cartel to increase its stranglehold over the consumer. Yet that is exactly what they plan to do.

In addition to all the other favors Obamacare does for the insurance cartel, Republicans are working with Democrats to spend billions on a bailout “re-insurance” program. As Chris Jacobs observes, Obama already enacted such a program, and the same insurers owe the government billions of dollars. Paul Ryan and GOP leaders referred to it as the “great Obamacare heist,” yet now they are seeking to create a new heist, disregarding the previous bailout.

How Obamacare exacerbated the government-induced monopoly of the insurance cartel

By far, the most odious aspect of Obamacare on the insurance side was the insolvent regulations that tripled or even quadrupled premiums in some places. While paying for endless free stuff through subsidized exchanges and Medicaid for able-bodied adults, consumers and taxpayers were left with crushing costs. I’m often asked, if the regulations were so harmful, why did the insurance industry fight so hard against repealing them last year? The answer to that question lies in the core problem with health care that was exacerbated by Obamacare.

The patient is not the consumer in health care. The government and the insurance cartel are the consumer. Typically, if I want to go into business, I must offer a useful service at competitive pricing to attract customers. Until then, I start out with zero customers, zero revenue, and negative profits. Consumers are king.

When it comes to health care and health insurance, however, the cartel companies start off with 60 percent of their revenue coming directly from government programs. People forget that 74 percent of Medicaid and much of Medicare is managed by the cartel; they are not pure government programs such as TANF or food stamps. These programs are massive handouts to insurers as well as to hospitals. Most of the remaining “consumers” are also guaranteed to the cartel indirectly by the government, through the $300 billion tax exclusion for employers to purchase cartel insurance.

These policies, as well as a number of statutory favors and handouts, have tilted the playing field and the bargaining power to the insurance cartel. Obamacare merely stepped on the gas pedal through an enormous amount of Medicaid funds and “private” insurance subsidies to the cartel. Policymakers erroneously separate health care into two systems – public and private – but they fail to see that the private system is not really private and the public system is not fully government-run. The private system is heavily influenced, regulated, distorted, and subsidized by government, especially after Obamacare, while the public programs line the pockets of “private” entities. Thus, we are left with a system where the health insurance cartel controls health care and hospitals make a killing off these programs and price-fix with the insurers in a symbiotic relationship. The consumer is completely cut out.

Now we can understand why the cartel not only isn’t bothered by the Obamacare regulations, but downright need them. With the endless pre-Obamacare and post-Obamacare subsidies, they are flush with cash and have enough to cover the costs with the regulations. For example, they don’t care if the cost per average consumer is $5,000 a year and they charge $8,000 or if government regulations raise the cost to $20,000 and they charge $25,000. They don’t care if government raises the cost to $1 million. They will still get their margin of profit and pass the cost down to the non-subsidized individual consumer and the corporations for group plans (which in turn will bite into the paychecks of employees). At this point, the regulations are actually helpful, because they are so prohibitive that they ensure that no new innovator can enter the market and offer cheaper prices to consumers as the incumbent cartel puts the screws to them. The regulations mixed with the subsidies are a match made in heaven for the cartel while creating a living hell for consumers.