June 28, 2012 Leave a comment
The nastiest aspects of the Patient Protection and Affordable Care Act are the individual mandate, guaranteed issue and the partial community rating. The individual mandate survives thanks to the Supreme Court deeming it a tax today, even though Obama said it wasn’t. It stipulates that all persons not covered by an employer sponsored health plan, Medicaid, Medicare, or other public insurance programs, purchase an approved private insurance policy or pay a penalty.
So the government forces poor people to buy insurance from large companies. Just like they encouraged poor people to become homeowners and patronize banks, fueling a housing bubble and economic disaster. Just like how they feel that the maximum number of people possible need to go to college, because if 20% of the population go to college and get good jobs, then if 50% of the population go then 50% of the population will have good jobs. Few realize this is just diluting the value of a degree two-and-a-half times over, making the parchment increasingly expensive, causing our horrific levels of graduate unemployment/underemployment and creating yet another bubble.
Remember when insurance was a way of protecting against the risk of some low-probability/high-cost misfortune befalling you? It feels rather silly to point this out, but coming of child-bearing age and choosing to use contraception is not an insurable event. The United States is attempting an insane experiment that completely changes the nature of insurance. Americans are actually an over-insured people. This has been going on since World War II, when the Roosevelt administration decreed that compensation for labor in the form of employment-based health insurance does not count as taxable income, creating some very perverse incentives. Americans rely too much on third-party payment, whether by governments or private companies. Obamacare exacerbates this problem. Paying a third party to cover the costs of predictable, routine health costs leads to prices shooting upwards.
The guaranteed issue and the partial community rating compel insurers to offer the same premium to all applicants of the same age and geographical location without regard to most pre-existing conditions. Obamacare will thus turn every large insurance corporation into the equivalent of Fannie Mae and Freddie Mac, requiring permanent taxpayer bailouts to stay afloat. When they fail, the corporations will be nationalized and unfettered capitalism will be blamed. Which I have always believed is Obama’s end goal.
Remember all those mortgages banks gave to people without the ability to pay back in recent years? This is the same thing, with insurance. How much hand-wringing do I have to do here, dammit? Why do we never learn?
By the way, I suspect many of us will be arguing with our colleagues at work or university on the role of the state in healthcare. I recommend reading these articles to start pumping you with a little intellectual ammunition:
What Soviet Medicine Teaches Us, by Yuri N. Maltsev
Medical Care Facts and Fables, by Thomas Sowell