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The Fannie Mae Health System By: Ben Shapiro
FrontPageMagazine.com | Thursday, August 20, 2009

President Obama's "public option" health care plan has been temporarily shelved — or, at least, that's what his spokespeople would have us believe. Kathleen Sibelius, secretary of health and human services, said on Aug. 16 that a public option wasn't an "essential option" in revamping the health care system. Sen. Kent Conrad (D-N.D.) is now pushing a new idea: the insurance co-op. "A co-op has some appeal because it is a nonprofit alternative," Conrad says. "At the same time, not government run or government controlled." 

What exactly are co-ops? There are several different definitions. Some co-ops involve private ownership of an insurer; the insurer is operated on a nonprofit basis. Individuals can then buy insurance from the co-op. Another co-op option would be the Ace Hardware model, in which insurers pool their resources and sell to individuals on a for-profit basis.

That isn't what Conrad is talking about, however. According to the Associated Press, "Conrad said $6 billion would be needed — in loans and grants to help doctors, hospitals, businesses and other groups form nonprofit cooperative networks." This isn't a privately-held nonprofit, and it's not a privately-held for-profit. It's a government-subsidized business that will be indirectly responsible for administering government policy.

The health care co-ops are Fannie Mae.

In 1938, the government established the Federal Home Mortgage Association — Fannie Mae — in an attempt to boost mortgage lending. In an effort to get Fannie Mae's liabilities off the government books, however, the government spun off Fannie Mae to private shareholders. Meanwhile, the government continued to pull lending standards strings and offer subsidies. The result? The horrific mortgage policy that led to the current mortgage meltdown.

The most wonderful thing about the Fannie Mae spinoff, of course, was that when the real estate sector imploded, the federal government could blame the private market. They could blame "predatory lenders" and "credit derivative swaps" and "secondary mortgage markets." They could ignore their own role in the development of the mortgage crisis, citing the fact that Fannie Mae was privately owned.

Obama is a quick study.

Obama's "public option" plan was a grand attempt to sweep away all private opposition by making it more affordable for private businesses to dump all their employees on the taxpayer.

His new "co-op" plan follows the Fannie Mae model for undermining public confidence in private health care. It allows the government to subsidize "co-ops" while promoting government care standards —subsidies and standards that will no doubt be overly generous in order to draw new clients.

At the same time, Obama's plan will continue to promote requirements that private insurers cover all applicants, no matter how sick, no matter how bad their pre-existing conditions. Insurers who currently do not make payments to stage 4 cancer patients applying for care will now need to make those payments. Healthy insurance beneficiaries will bear the brunt in increased deductibles. Higher cost and worse care will result for private health care clients.

Even worse, the "co-op" myth will provide Obama the cover he seeks to utterly swamp the private system. When private insurer care drops in quality — a drop necessitated by new regulations — Obama will declare their care insufficient. More and more Americans will opt for the new "co-ops," just as more and more Americans opted for Fannie Mae mortgages.

And sooner or later, when "co-ops" go bankrupt, government will step in to save the day with total nationalization.

President Obama is a determined man. And he is determined to have single-payer, nationalized health care by hook or by crook. The "public option" was by hook. The "co-op" plan is by crook. There's only one question left: Will Americans recognize this new swindle for what it is?

Ben Shapiro, 25, is a graduate of UCLA and Harvard Law School. He is the author of the new book "Project President: Bad Hair and Botox on the Road to the White House," as well as the national bestseller "Brainwashed: How Universities Indoctrinate America's Youth." To find out more about Ben Shapiro and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Ben Shapiro is a graduate of UCLA and Harvard Law School. He is the author of the new book "Project President: Bad Hair and Botox on the Road to the White House," as well as the national bestseller "Brainwashed: How Universities Indoctrinate America's Youth."

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