By

Cognitive Dissonance

“The truth is that the State is a conspiracy designed not only to exploit, but above all to corrupt its citizens.”—Leo Tolstoy

Like millions of other individuals and families in the USA, Mrs. Cog and I have reached a point this year where we must make decisions regarding Health Sick Care Insurance for 2015. Before I begin I would like to point out we are attempting to take back control of our health by eating better, exercising more, mostly by way of regularly working on the homestead, while practicing preventative/proactive care using such things as natural herbs and supplements, organic teas and honey and so on.

Our point of view is simple: other than possibly needing emergency medical assistance for major accidents and injuries or catastrophic illness such as heart attack, stroke etc., we don’t use the health sick care industry nor do we wish too. Our preference would be to have access to a catastrophic emergency care insurance policy with a large deductible (say $15-25,000) to keep the insurance premium manageable. We will handle our day to day health issues as well as preventive care on our own.

We do understand, and generally agree with, the need for catastrophic health injury/illness insurance to meet our responsibility of limiting our, and society's, liability and expenses. We do not wish to be a burden to others or to ourselves. We have in the past, and continue today, to express our willingness and desire to participate in a common insurance risk pool to mitigate that possibility. Mrs. Cog and I do not wish to receive a free ride, where others pay for our medical expenses, nor do we expect to just show up at the local emergency room and demand treatment without the ability to pay either out of pocket or via insurance for services rendered. That said, let me begin.

Not the way to exit the sick care racket.

Dammed if we do, dammed if we don’t doesn’t even begin to describe the situation we find ourselves in this December of 2014. Aside from the ‘normal’ annual increases, our present health sick care insurance provider jacked up our premium rates in April and again in August of this year to (they claim) bring our present policy into compliance with the Obamacare ‘mandate’. The total increase over the last eight months was 65% with the majority coming in August. Worse, we just received notice of another 10% increase set for January 1, 2015. So much for the flat out fraudulent and horrifically misleading declared ‘inflation’ rate of 2%.

While I will not discuss specific details, our present coverage is far removed from what the medical system describes as a ‘Cadillac’ plan. The per-person deductible is several thousand dollars each and the total family deductible is well north of six thousand dollars, a figure which doesn’t include co-pays and out-of-network surcharges. The maximum out-of-pocket potential is more than ten thousand dollars a year.

Making matter worse, up here on the mountain there is no doctor network to speak of, further driving up first dollar costs for Mrs. Cog and me. While we take some responsibility for this because it was our decision to move to this rural mountain area in the first place, why all doctors cannot participate in several different national insurance networks is beyond me. It is so much more than just reimbursement rates that determine which doctors are in what network.

The latest correspondence from the health sick care insurance company helpfully informs us we may visit their website before Jan 1, 2015 and select from a variety of ‘affordable’ health sick plans, thus clearly admitting our present day policy is no longer affordable……though it never was for the services desired or received. It is almost as if the system is set up to bolster insurance company profits first, drug and medical services company profits second, doctor and clinic profits third and patient care last. Of course we are told otherwise by all of the above.

The letter ran several pages long and was laid out in a question and answer format obviously intended for those with a sixth grade education or below. Several questions followed along the lines of “Where’s my health care subsidy/premium tax credit” followed by a simple answer; ‘We the (little) People’ were out of luck unless we visited the official ‘Health Insurance Marketplace’. You mean the rabbit hole goes deeper?

Photo courtesy of Lobby365

What rabbit hole?

For nearly two decades I was a licensed life and health insurance agent and sold both individual and group health insurance policies during that time. In addition, from 2001 until 2008 I helped select and structure a midsized employer group health insurance program for my employer as well as the day to day administration of the plan. But even with that large experience base I am far from an expert on the ins and outs of the animal called Obamacare. And I seriously doubt there are more than a few in this entire country who are expert other than the insurance companies who actually wrote the law in the first place.

My blind spot is the nuanced intricacies of the Affordable Care Act (ACA). Even after they passed it I was still not able to read and fully understand it. But mama didn’t raise no fool. Speaking as one of millions of semi(un)informed ‘consumers’ of health sick care insurance in America, when I say the game is rigged and ‘We the People’ are the bait, the prey and the patsy, it is more than just me smelling a skunk in the woodpile. The rabid skunk not only sprayed me, but bit me as well and for the life of me I can’t find medical care at a reasonable cost. Welcome to a brave new world.

Nurse - "Doctor, the patient died."

Doctor - "It's OK nurse, we extracted the wallet in time."

As many of you know Mrs. Cog and I moved to the mountain in June of 2013 and have followed a path of asset divestiture and debt pay down, done primarily to extinguish debt and to greatly simplify our lives. Anyone who has followed this path understands the way to play the financial ‘game’ is NOT to do as we are doing, but to hold on to the assets in order to keep leveraging up while avoiding the tax man’s ugly wrath.

The net effect of our financial insanity is that the Federal and State tax (wo)men have been richly rewarded for our self proclaimed liberation, though some would definitely call us foolish. We are deliberately working ourselves into the poor house, with gross and net incomes that now land us squarely among the lower middle of the middle class.

The good news is while our income has dropped dramatically, so has our outgo to an even greater extent. The net result is while others in our income class are really struggling to make ends meet, we are not in a dire situation because our housing and transportation costs, other than insurance, utilities, gasoline, upkeep and taxes, are nil compared to many others.

Still, considering our unsubsidized health sick care insurance premiums now represent almost 25% of our gross income, this is no laughing matter. In just four short years, beginning shortly after Obamacare (aka the Orwellian named Affordable Care Act or ACA) was passed under the cover of deliberate ignorance and confusion, health sick care insurance premiums have more than doubled in price and in some cases tripled, quadrupled or more.

Something has gone horribly wrong for the average Joe and Jane Doe and this was not an accident or a product of unintended consequences by any stretch of the imagination. How is it that among all first world countries the USA charges on average 50% more for health sick care services with results/outcomes no better than, and often much worse than, the rest of the first world nations and many second world nations?

Modern day treatment plan in practice.

While I have watched health sick care insurance premiums rise at triple or quadruple the officially declared inflation rate for more than two decades, what has transpired over the last four years is nothing short of criminal. Even though insurance companies claim the expanded ‘mandate’ of the ACA is directly responsible for the significant premium increases, two things stand out as glaringly obvious even to a blind man.

One, the first dollar deductibles and co-pays have risen even faster than the premiums, indicating to me that any greater risks absorbed by the insurance companies from the ACA has been at least partially offset by more money out of the public’s pocket even before the insurance company collects its first greatly increased premium or pays its first dime in benefits.

Two, one look at the huge increase in health insurance company profits since the ACA was ushered in, not to mention their stock price, is a sure sign these companies are not suffering, but rather profiting handsomely simply from the process of preparing for the full implementation of the ACA. They understood quite well a simple ‘bidness’ (a la Tony Soprano) concept. When change is imminent the key to making (more) money is to complain like hell about the threatened legislation while quietly lobbying behind closed doors for the ability to write said legislation. And that is precisely what they did, and continue to do, with the (re)writing of the fine print by the administering government agencies.

Insurance companies brought out the big gun lobby for the ACA

"Watch out for the kick (back)."

Similar to automobiles, housing and higher education, ultimately the price of any expensive product (in this case health sick care insurance) is based upon who is paying (in part or in full) and how easily it can be financed and/or subsidized. When expensive items are easily financed at favorable terms or subsidized/fully paid for by others, there is little incentive to hold prices down because ‘price’ is no longer a critical barrier to entry for the purchaser. As well, if you distort and distribute the price paid among several parties and no one feels responsible to hold the line, another incentive to keep prices manageable is lost or ignored.

The majority of medium/large employer group health sick care insurance premiums are paid by the employer, though as those costs continue to rise the burden is beginning to shift towards the employee through various cost sharing arrangements. While the ACA changed and accelerated that dynamic somewhat, with even more to come over the next few years, for the most part the employer sponsored and heavily subsidized group health sick care insurance policy remains alive and well for now.

What is important to remember here is the lack of a real and significant incentive by the employer, employee and the insurance company to restrain premium increases since no one party bears the brunt of the entire increase. The employer doesn’t wish to upset their employees with sudden and significant premium increases when real wages have been stagnant for years. And after several rounds of layoffs, or at the very least the ever present threat of downsizing/relocation/merger, many employers wish to keep their remaining productive and profitable employees working. It is usually cheaper to keep a (slightly) more expensive employee than to go through the significant expense of replacing him or her, then training a new one who at least initially is less productive.

The employee will likely complain, then grin and bear it because they are concerned about keeping a job in a world increasing populated by part time work with no ‘fringe’ benefits at all. And the insurance companies just want to make hay while the sun shines. As long as someone pays the increased premium, what incentive does the insurance company have to mitigate increases other than to increase company profits? Death by falling drops of water is slower than a rushing tsunami, but the end result is just the same.

The individual or family without access to a (subsidized) group policy, but still able to ‘afford’ to purchase health sick care insurance before the recent changes, will most likely continue to buy the insurance despite the premium increase. They might try to lower the financial impact by going with higher deductibles and co-pays rather than go without insurance so long as they are (self) employed and bringing in an income.

But with the implementation of the ACA and the accompanying penalties…..err……‘taxes’, one is limited in how high they can raise their deductibles in order to save money without triggering the penalty……tax. Meaning if they try to purchase a low cost high deductible catastrophic sick care insurance policy they will still be forced to pay the penalty tax in addition to the insurance premiums. Talk about a cattle chute.

What could possibly go wrong?

What was missing from the general insurance risk pool before the ACA (along with the higher insurance premiums) were the chronically uninsured aka the poor, the unemployed, chronically ill, injured, disabled and so on. Make no mistake about it; this wasn’t a case of the insurance companies not wanting those higher risk individuals and families in the risk pool. There just wasn’t anyone available who would, or could, pay the higher premiums associated with the risk. Essentially an entire class of people, a whole new line of (profitable) business if you will, was missing from the insurance company’s portfolio because no one was willing or able to pay. Until now that is.

With the passage, and now ongoing implementation of the ACA, this ‘oversight’ has been rectified. However, the high premiums charged are essentially meaningless or of little consequence to some of the people in this pool because many of the poorest will pay little or nothing after the government subsidy is applied in advance on a monthly basis. It just doesn’t get any better than this for the insurance company(s). The crony nanny state has now firmly inserted itself into another aspect of daily life in America, bringing an already vulnerable class of poorer Americans that much closer to the nourishing teat of total governmental dependency and control.

But it is not just the poor or lower middle class who were, and are, affected by the ACA. While I just said employer sponsored group policies are still going strong, it appears their time in the sun will be limited. Especially after employer ‘mandates’ kick in next year (2015), more and more employers will throw in the towel and cease to resist the impulse to let go and let government totally control the health sick care insurance arena.

If a study of world history (altered and propagandized as it may be) is any indicator, a despotic tyrannical governmental force will eventually be bound and determined to spread its corruption and control as far and wide as possible. It makes perfect sense for this to be promoted since the more citizen slaves nourished from the government teat, the more the newly corrupted converts will fight to remain at the fiat bloated breast.

Once firmly attached and dependent, the suckled will fight any ‘enemies’ the government claims will threaten their government milk supply. This is not to imply everyone, or even anyone, who takes a government subsidy in order to afford their grossly overpriced and underserved health sick care insurance, is a bloated freeloader who doesn’t wish to earn their keep. Far from it in fact. It is a tightly sprung trap not even Forrest Gump could outrun even with his damn box of chocolates.

Run Forrest Run

The socioeconomic system in general, and the ACA in particular, was specifically designed to corral nearly everyone into the cattle chute of coerced cooperation in the collective corruption of the nanny police state. But for those who claim this frightening trend is new are in our opinion way off base. This is the direction this country has been moving for decades and it was only when the acceleration reached liftoff velocity on its exponential curve to outright oppressive slavery did people begin to notice they had fallen down and couldn’t get back up.

While I fully agree corruption starts at the top and filters down, in so many ways it has now permeated the general public by presenting nearly impossible situations which, while they may be wearing the façade of several ‘choices’, only one choice presents itself as practical, the one which was originally designed to be the ‘only’ choice from the beginning.

The secret to administering the modern day ‘democratic’ nanny police state is to subsidize the illusion of freedom which when you boil it all down is expressed as freedom of choice. The key is to manage those choices in such a way that no ‘good’ choices (defined as fair and beneficial to “We the People”) are presented and the worst best choice further ensnares the public in the corruption nets like an encircled school of sardines. To do this, the government and its joined-at-the-hip special interests most often employ the carrot and stick approach.

Let the games begin.

With Obamacare the process works like this. Currently mandatory health sick care insurance policies are so expensive even the reasonably well off income wise will swallow hard at the price tag. To mitigate the mandatory pain the public is informed they can always opt out if they don’t like the choices. But if they do so they must visit the penalty tax box each year to ‘pay’ for their freedom to choose none of the above. As planned we are given several bad choices to choose from.

Next we are introduced to the carrot after a firm shaking of the stick. Offer to subsidize all those bad choices on a sliding (and generous) scale so individuals whose income is well above ‘poverty’ level, itself a fictitious number pulled out of thin air which is supposed to represent abject suffering but in reality is so much worse, as bait to entice them into the spring loaded mouse peasant trap. Anyone with an adjusted gross income between 100% and 400% of the ‘poverty’ rate is eligible for a (government printed paid) subsidy on a sliding scale. See, that anal probe doesn’t hurt so bad now does it?

You may ‘choose’ to purchase the exact same policy directly from the insurance company and receive no subsidy at all, either on a monthly basis or when tax preparation time rolls around. Or you can use a Federal or State government sponsored and created internet information gathering portal, spill your guts on line and expose all your financial and personal information to the government (and any competent hacker or NSA operative) to receive a subsidy for the exact same policy. Some ‘choice’, huh?

And all this is presented with the straightest of straight faces, as if not only is this perfectly normal but it has always been this way. Besides, it’s for your own good. While not exactly a Hobson’s choice, it’s too damn close to tell the difference.

Annual insurance company executive conference

Essentially the insurance companies get to author the law and then raise premiums for four years in anticipation of the law’s enactment. Upon implementation (and after further premium increases) the insurance companies are paid some or all of the high risk ‘pool’ insurance premiums directly by the government on a monthly basis. Best of all, if the subsidy was incorrectly applied or calculated and the taxpayer insured received too much, the IRS is the bill collector, not the insurance company. It just doesn’t get any better than this.

The Affordable Care Act is a prime example of the ‘legal’ process by which an increasingly despotic and fascist government joins hands with other powerful and moneyed entities in opposition to the very people who supposedly ‘support’ the government in order to maintain power over a system that is rapidly collapsing primarily because of the corrupt influences of the government and its cronies. The crony nanny state isn’t here to protect you, but to protect itself and its cronies from you.

It takes very little imagination to recognize similar behavior in the higher education/student loan juggernaut, the military/industrial/political/false flag war machine, the banking/Wall Street/Federal Reserve/IRS parasitic fiat organism, the oil/petrodollar/puppet dictator/empire collective, the nanny state/militarized police/fake terrorism/freedom of speech area/bash and gas the protestors/left-right illusion of freedom game, the Hollywood/NFL/NCAA/MLB/NBA public financing of private assets/bread and circuses distraction, the 1984/FCC/MSM/ISP/DOD/ATT/NSA et al spying on citizens in the name of terrorism/blackmail of anyone useful dirty underwear program and the Corporate Welfare/State Tax Concession/phantom jobs added/Congressional donations, kickbacks and bribery crony capitalism scam to name just a few of the more obvious.

Wait......I think there's more blood left in this turnip.

The one party left out of this you-scratch-my-back-I’ll-fill-your-pocket game is the citizen in whose name all this is justified and done. As The Powers That Be (TPTB) leeches of the slave plantation system bleed ever more life sustaining financial fluids from the population, the natural tendency of said population is either to flee the system or to cutoff and burn the leeches. The leeches, being quite smart and enterprising sociopaths, understand their hosts might actually revolt if something isn’t done and have begun to turn the vise ever tighter to seriously clamp down on dissent and ‘disorder’.

The solution, at least for the leeches, is to dig their suckers in even deeper while injecting ever more anticoagulants and painkillers in the form of more bad choices, narrower cattle chutes and a lot more extra judicial killings by the elite status quo enforcers aka the militarized police. Whom, I might add, are increasingly protected by a corrupt and co-opted judicial system endorsed and enforced by executive order and new Congressional Critter ‘laws’ making it all nice and legal.

All it needs to make it complete is a pretty red bow on top and NSA/FBI operatives conducting sneak and peak investigations (also known as a ‘legal’ breaking and entering) to examine our person and papers while planting drugs, child porn and/or incriminating documents on our computers and in our paper files while harassing any remaining dissidents brave enough to stand up and just say no.

Plenty of room at the inn for dissidents.

The system itself is completely corrupt and thoroughly rigged folks. There is no way out and no possibility of making changes from within because, similar to the methods employed by organized crime, the system will protect itself from those it claims to be protecting while shielding those who most benefit from this arrangement in order to feed itself. What started as the totalitarian tiptoe has now turned into an extremely dangerous crony capitalist state. The nanny police state no longer needs to sneak about since its only remaining purpose from here to perpetuity is to grind our bones to make its bread.

Sadly the more average Jane and Joe becomes aware of the trap, the more dangerous the police state becomes as each citizen/slave is recognized less as a food source to the leaches and more like an enemy combatant come to destroy. Our ignorance is the police state’s bliss and the gearing up for battle by the police state is rapidly extinguishing the public’s ignorance in an all consuming positive feedback loop of shocked awareness. We ain’t in Kansas anymore Toto.

Those of us who now recognize we are sleeping with the enemy, and worse the enemy is rapidly becoming you and me as we are consumed by the engorged system, have some stark and disquieting choices to make, all of them bad with none of them leading to a satisfactory solution. As the nanny police state continues to destroy its host in order to feed itself those choices will not remain static, but instead will move hand in hand with the political wind and the continuing dollar debasement.

Mrs. Cog and I do not have answers to all of our own questions regarding how to protect ourselves, along with those we love and care for, from the encroaching, and suffocating crony nanny state. What we do know is profound in its overwhelming simplicity. When you find yourself in a deep hole with a shovel, the first course of action is to stop digging and begin the process of climbing out.

Or in this case when you find yourself face to face with the crony nanny state, the first course of action is to withdraw to the best of your ability, take stock of the situation and your resources, then begin to forge a path towards more sustainable living and less dependency upon the nanny state. Since everyone’s situation is different, there is no ironclad advice to give you other than just to begin the process. Essentially do everything you can to buffer yourself from the state while bolstering your own position.

Now get to work.

12-20-2014

Cognitive Dissonance

Hard at work calculating next year's premium increase.

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