The primary difference between communism and fascism is that under communism, the government directly owns and runs the companies that provide the goods and services comprising the economy.
Under fascism (a.k.a. corporatism), companies are ostensibly independent, yet are so tightly controlled as to serve as extensions of the government. Less scrupulous companies assent to this arrangement, because as the free market disintegrates under an acid rain of hyper-regulation, only those with a seat at Big Government’s table can survive.
A major benefit to companies that do not resist being coopted by the government is that they do not need to worry about financial losses, which bureaucrats make up on a coercive basis at public expense. ObamaCare is a classic example of fascist economics:
Robert Laszewski — a prominent consultant to health insurance companies — recently wrote in a remarkably candid blog post that, while Obamacare is almost certain to cause insurance costs to skyrocket even higher than it already has, “insurers won’t be losing a lot of sleep over it.” How can this be? Because insurance companies won’t bear the cost of their own losses — at least not more than about a quarter of them. The other three-quarters will be borne by American taxpayers. …
Indeed, it’s bad enough that Obamacare is projected by the Congressional Budget Office to funnel $1,071,000,000,000.00 (that’s $1.071 trillion) over the next decade (2014 to 2023) from American taxpayers, through Washington, to health insurance companies. It’s even worse that Obamacare is trying to coerce Americans into buying those same insurers’ product (although there are escape routes). It’s almost unbelievable that it will also subsidize those same insurers’ losses.
What would have been even more unbelievable would be insurers going along with ObamaCare instead of shrieking bloody murder from the very beginning if they had not received a little insurance themselves. Anyone with even a rudimentary understanding of the economics involved would understand that ObamaCare would quickly collapse the entire medical insurance industry without massive infusions of taxpayer money:
As Laszewski explains, Obamacare contains a “Reinsurance Program that caps big claim costs for insurers (individual plans only).” He writes that “in 2014, 80% of individual costs between $45,000 and $250,000 are paid by the government [read: by taxpayers], for example.”
Being furtively backed by Washington’s printing presses will make ObamaCare appear to be less of a disaster than it really is by keeping rates from shooting straight into the stratosphere.
But that’s only part of the payoff for insurance industry collaborators. A federal mandate that we buy their product is another. Here’s a third:
Laszewski writes that Obamacare also contains a “Risk Corridor Program that limits overall losses for insurers.” So insurers not only don’t have to pay out all of their costs; they also don’t have to swallow all of their losses.
Laszewski explains that if an insurance company expects its costs in a given year to be X, and those costs end up being more than X plus 2 percent, taxpayers will come to that insurance company’s rescue — thanks to Obamacare. In fact, once an insurance company covers that initial 2 percent in unexpected costs, taxpayers will cover at least 80 percent of any additional costs the insurer accrues.
Nice deal, huh? It’s a win-win situation for both power-mad socialist bureaucrats and greedy crony “capitalists.”
However, the deal doesn’t work out so well for the rest of us. We will be forced to pay through the nose for lousy healthcare bogged down by excessive regulation.
In the end, it won’t work out so well for insurers either. Feeding the alligator may cause it to eat you last, but it will still eat you. Eventually leftists will have the political leverage to dispense with the charade and cut out the middle man rather than share tax loot with insurance companies. That’s when ObamaCare fascism will give way to “single payer” communism.