“Con game,” of course, is slang for “Confidence trick,” which Wikipedia describes as:

Confidence tricks exploit typical human characteristics such as greed, dishonesty, vanity, honesty, compassion, credulity, irresponsibility, desperation and naïveté. As such, there is no consistent profile of a confidence trick victim; the common factor is simply that the victim relies on the good faith of the con artist. Victims of investment scams tend to show an incautious level of greed and gullibility, and many con artists target the elderly, but even alert and educated people may be taken in by other forms of confidence trick.

Call me a cynic, but I find the early enactment of select portions of the Patient Protection and Affordability Act (a/k/a Obamacare) somewhat suspicious.

For example, immediately upon Obamacare’s passage, health insurance companies had to allow “children” up to the age of 26 to remain covered under the parents’ plan. As people under 26 are generally in pretty good health, I can accept that that alone won’t add much to the cost of health insurance coverage overall.

However, two new provisions went into effect last week: the so-called “Contraception mandate,” and the refunding of “excess” administrative costs.

The contraception mandate requires health insurance to include totally free “contraception” coverage—all birth control drugs, devices, and services, including birth control pills, injections, implants, IUDs, abortificants, and sterilization—at no cost to the insured: no additional premium, no co-pay, no deductible, etc.

Most readers of The Beacon are likely aware that the reason most of us get our health insurance coverage through our employers dates from World War II, when wage and price controls prohibited businesses from competing for workers on the basis of pay, so they started offering benefits like health insurance to lure scarce workers. In hiring situations today, one of the first things applicants ask about are the terms of the health insurance offered, and it’s frequently the topic of negotiation in successfully recruiting a candidate. Thus, it certainly seems that if having coverage for grown children and free contraception were widely desired, health insurance plans would have been offering them before President Obama and House Democrats mandated them under Obamacare.

Oh, but that’s right. Given how highly regulated health insurance is, it’s likely insurance companies weren’t allowed to offer policies providing for such coverage.

So why include this coverage under the new law?

Also effective August 1, health insurance companies must issue refunds for premiums that went to administrative costs exceeding 20¢ on the dollar. Thus, on Saturday, we received a letter from our health insurance carrier stating:

In 2011, Blue Cross of California spent only 77.50% … on health care and activities to improve health care quality. Since it missed the 80/20 by 2.50% of premium it receives, Blue Cross of California must rebate 2.50% of the total health insurance premiums paid by the employer and employees in your group health plan.

Left to myself, I might be inclined to think that 77.5% of payments going to direct service is pretty good. After all, a non-profit is rated highly if it directs something in the low 80% range, and of course non-profits are known to pay their employees poorly. Thus, overhead of 22.5% for the professional management of a large healthcare concern would seem fairly reasonable.

But the government says it’s not good enough, and we all got the good news that we’ll be getting some money back for Blue Cross’s wasteful ways.

That got me thinking: I wonder how well the government does with the money it takes from me; and, if more than 20% is going to administrative costs rather then the services they provide, can I get a refund?

Unfortunately, figures for administrative costs for government agencies aren’t generally obtainable. The only research I could find that has administrative costs was a study from Pepperdine University’s Davenport Institute that showed for K-12 education in California, direct classroom expenditures statewide are 57.8%. Further, the statewide totals reflect a very wide range of variance among individual school districts, with direct classroom expenditure ranging from more than 70 percent to less than 45 percent.

Thus, if the Obamacare guidelines were applied to the California Department of Education, I would be owed a refund for 22.2% (80% – 57.8%) of my taxes taken for education—which in California is something like 80% of the state budget.

Now that’s a windfall I could really sink my teeth into!

However, I suspect that in this instance what’s sauce for the (cooked) goose health insurance companies is not going to be sauce for the well-compensated government administrators.

But shouldn’t I be happy that I’m getting all these upfront goodies from Obamacare—free contraception, coverage for my unemployed grown children, and a refund to boot—all at no additional cost to me?

If so, my November vote choice is clear: express my good faith in those great guys and gals who passed this package of goodies and reelect them! Don’t think about the increased taxes and reduced access that I’m not going to see until 2014 when the new taxes and other Obamacare provisions start kicking in!

However, those not quite so subject to the greed, dishonesty, vanity, credulity, irresponsibility, desperation, and naïveté that make for a good confidence man’s victim just might want to take a second look at some of the multiple materials available on this website cautioning against the con game known as Obamacare:

For information on the pivotal alternative to Obamacare, see our resource section on Priceless: Curing the Healthcare Crisis

For the contraceptive mandate, see for example, “Religious Objection Not the Only Problem With Obamacare Contraception Mandate,” by Paul Theroux.

Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, she is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, former Chairman of the Board of Advisors for the Salvation Army of both San Francisco and Alameda County, and Vice President of the C.S. Lewis Society of California.
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