As the Beast of Obamacare Is Put Out of Its Misery

The stock market was rattled by news of a bigfoot new entrant in healthcare, slowly coming up the horizon … thud … thud … like Godzilla, stomping everything in its path.

Investor’s Business Daily, in its editorial, noted the that that reaction to the news that Amazon was teaming up with Berkshire Hathaway and JPMorgan Chase was the sign of a disruptive force in the market, writing:

The immediate reaction of the stock market to the news that Amazon is teaming up with Berkshire Hathaway (BRKB) and JPMorgan Chase (JPM) to form a new health care company suggests that this is a transformative event. It is in one sense.

The editorial makes the point that the new venture, in a free market, may or may not succeed, and must avoid socialist pitfalls. As the editorial page writers there have a strong grasp of market dynamics and the way companies behave, the piece is well worth reading.

For me, (and full disclosure, I used to write for IBD), what’s vivid is the flip side of this. We seem to be in for a healthcare spring.

Suddenly, a new player, with new ideas, and new innovations, is entering the markets.

Did anything like this ever happen under Obamacare? Actually, it would never have been possible with Obamacare. Obamacare stifled innovation, customer service, added value and everything in healthcare, that, out in retail land, made Amazon great. And now the end of the Obamacare mandate opens the door to improvement. In hindsight, the effect is obvious.

After all, the new venture was announced just after the GOP tax cut, which not cut the corporate rate to 21%, and most significantly, it freed consumers from the nightmare of Obamacare with its detested mandate, as President Trump noted in his State of the Union address last night. That mandate was in fact, a poverty tax on the middle class and working poor people who could not afford Obamacare plans. Paying that poverty tax prevented them from buying anything else in the healthcare market that might work better for them.

Now, the nightmare is over and new companies are springing up, far freer to provide the services customers want and cut costs that drive premiums up and customers away.

The mandate forced unwilling buyers into Obamacare programs run by just a few corporate giants, whether they liked it or not. They were a captive audience, everyone knew it, and thus, the trapped consumers could be jerked around because companies (and their government allies) set the terms. That was one reason why health care costs kept going up and up, and available services kept going down. As buyers quit anyway and went without health insurance, costs went even higher. It was as bad a system as was possible to be, and it encouraged health insurance providers to entrench themselves in their privileges with no incentives to change. They were like a nomenklatura, an elect, an elite, same as in the Soviet Union. Consumers had absolutely no input, given that the Obamacare mandate forced them to participate or be fined.

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