The video heads off track quickly with the lead argument that education, fire and police protection, water treatment and the postal service are already socialized.    ..WHOA moment!  Fire and police protection are not Federal programs they are locally run and supported predominantly by local tax dollars.  Water treatment does have more  federal oversight for use but is still managed at the state and local level (I pay my city not Washington DC) and get my water from local resources.    The post office and public education are not the best examples of great social programs.   The post office is going bankrupt and customer service is severely lacking.     Public education spends 1000s more per student than private schools and continues to deliver a substandard product (judged by the world testing standards that liberals love).  Judged yet another way, politicians elect to keep their kids out of public schools and voucher programs in any form have waiting lists.  Hardly the goals we should set for our health care.

Needless to say it started badly… but we listen on…He said these were all essential services, just like health care.   I admit without health you are missing much.  What about food, shelter and clothing?  Are they less important then fire, postal service and public education?   Should the federal government mandate housing, food products and issue standard clothing (brown shirts) to all citizens?  These are far more essential then any such services.  In fact, only the Post office is enumerated in Article I, Section 8 of the Constitution.  The rest, as documented and reiterated in the 9th and 10th amendments, are left to the states (besides standards and regulations set forth).

40 seconds in …we plow on…He gives a basic and not invalid description of insurance.   But leaves out the glaring fact that a large population of people using the pool of money are not putting into the pool.  That is not insurance, it could be called a loan, but with no plan to ever pay it back it is closer to robbery or extortion.  Let it ride…

Now on to the newest talking point for the left the “Big Insurance” company and their evil profits.   Again a blatant lack of understanding…this one borders on flat out known manipulation.   He states that the profits are taken from people.  Basic math knows that profit is left over when expenses are subtracted from income.   The wording he uses is intentional.   The belief put forth is that by raising premiums they increase income.  By denying valid claims the companies limit expenses.  Therefore, increase profits on the backs of their customers.  Not untrue on the whole but a bit overstated.  It is missing the fact that should this be known and publicized in the courts and private sector the company would lose business, destroy its reputation and fail.  Customers would find another company with which to do business.  That is how the free market operates.   That is, if the government would allow sufficient competition between insurance companies to give consumers a choice [i.e.  purchasing across state lines, personal insurance policies].  What choice do you get in a socialized system when you get abused or denied?   You get to suffer and die.  See Canada, UK and closer to home Portland, OR.

And those evil fat cat investors he references. ..401k , mutual funds and pension plans?   A basic lack of understanding about the “owners” of public companies.  Let’s take a quick look at any… I picked Aetna.

To translate.. all stock owned by Aetna employees (insiders) and personal investors with 5% or more stake totals 0%.  90% of all Aetna stock is held by funds and institutions (i.e. Pensions).  I am sure some rich people have invested in those funds as well but they do not control them.   The illusion of a few rich owners is wholly invalid.   Simple math…that leaves 10% of the company held by all private investors combined.  To whom are they beholden?

We digress….

Back to it…2:10 in…He moves on to non-profit solutions.  Based on his misunderstandings of free markets and undue credit for local government’s value…he surmises that non-profit government run health care would be good for us.   Using Medicare as his hallmark example he touts a 3% overhead compared to 10%-20% for insurance companies.    Quick return to Aetna…26% gross profits in 2008…ewww.  Ok, now adjust for operating expenses and reinvestment (and don’t forget taxes..790 million$) and you drop to 4.4% net income to investors that loaned their hard earned money to Aetna (via stock).

He right that their overhead is higher at 28% in 2006 and dropping to 18% in 2008.   A recession is a good way to trim excess out of the system…unless you are government which is growing.   That extra overhead has a lot to do with advertising and sponsorships which cost money.   The government program needs no such overhead, since they simply take the money from your paycheck and every paycheck of working Americans.   It also ignores the cost of regulation on the private doctors, the costs of government buildings it does not own.   Also think again about simple math… the government program serves the unhealthy older population which have higher and more recurring claims then most private companies which include younger working Americans.  Therefore, with less overall people they can process more money out the door, thus lowering their overhead as a % of outlays.    Translated: double the denominator ($6000+ versus $2700 annual outlay per person) and the result is halved.  Government programs also do not pay taxes back to the government.  So this comparison is mostly invalid. Should we desire to take his data at face value…Medicare’s operating expenses are 3% which is better as a non-profit.   Problem, Medicare is not non-profit, it is net negative.  In fact it’s unfunded liabilities over the next 10 years is 2.7Trillion dollars.   What would their numbers look like if they actually had to pay for the expenses with income?   What will your expenses look like when “the pool” grows to include 100% of residents (not 100% of citizens)?  In summary, if you can run at a loss, excluded major expenses and mandate expenses on your competitors through regulation you can make your numbers look better.  By some estimates that attempt to equalize the numbers Medicare is running at8% or higher (some as high as 27%).

Moving on… can it get worse?  Oh and it does.   He moves on to a comical yet invalid metaphor about “what if Fire worked like health”.   The problem here goes beyond the fact that fire is a local service and not controlled by Washington DC.    Start at about 3:15.  It is worth getting his take on it.   So in his metaphor he claims that Fire protection is free and goes so far as to claim that the repair to the house is free as well.    The Fire Department does not fix your house and in no way covers you for damages.  Fire is  “emergency service” and they put out the fire.   Home owners insurance fixes the house.  That insurance could deny your claim if you started the fire via negligence or arson.

The metaphor is great because it fails so badly to prove his point that is proves the opposite.     Does your home owners insurance cover you changing the air filters in your furnace?  What about cleaning the dishes?  Do the firemen come to your house and conduct routine maintenance and trim trees to prevent a future problem?  Could you buy home owners insurance after the fire and ask them to fix it (pre-existing condition)?   On the health care front the metaphor follows.   Emergency services (emergency room care) cannot be denied by law and is provided at other insurance carriers expense.   So we already meet the comparative standard defined by his argument.

Many have come to believe the Health Insurance should be different.  That it should pay for everything and ignore the past.   That is nonsense.   Health insurance should be a personal policy to covers the services you elect to pay for and protects you in case of unforeseen catastrophe, just like home, life and auto.   See, we can agree.