The Obamacare Slow Leak

Maybe you have read some articles in the past weeks about insurance providers leaving the Obamacare market in some states (I just read another one today).  Well, it likely will get worse.  Here is what is happening.  First we need to understand how Obamacare works.  The entire scheme was predicated on the ability to tax (directly and indirectly) those with higher incomes and health care providers and redistribute this to poorer people and those who did not (often simply would not) have health insurance.  The health care providers were taxed directly in some cases but also indirectly by requiring the free provision of some services—which, by the way were already available either free or at extremely low prices.

At any rate, some insurance companies have found that all this free stuff is costly and that they cannot recoup their costs sufficiently to make a profit—which by the way is legally required to satisfy their stockholders and is necessary to pay for costs like salaries, light, heat, phone service, water, etc.  So they leave those more expensive markets.  As they leave competition goes down, leading to higher premiums and/or deductibles.  In some cases the companies stay and charge (or attempt to charge) higher premiums and deductibles.

You can see where this is leading.  Just as many predicted, including me, Obamacare is unsustainable.  It will either have to be substantially modified or scrapped and replaced.  I have suggested before my own preference and what I would replace it with, so I won’t rehash it here.  But it is time for citizens and voters to wake up and realize who put this unworkable policy in place—and who now refuse to lift a finger to change it.  This is the kind of misguided policy that only gives more power to bureaucrats, as we have seen with over 17,000 pages of regulations, and fails to achieve the good it was touted to highly to achieve.  When it comes to policy it would be nice if we lived in a world of complete objectivity, but we don’t.  We live in a fallen world in which individuals will inevitably make choices (and vote) to satisfy their own narrow agendas.  So I ask too much if I simply say we need some sort of “bipartisan” effort to “tweak” Obamacare.  I am afraid it needs much more than that, and secretly I bet even some Democrats agree, if they consider their constituents at all.  But they likely won’t do it.  So conservatives will have to do it.

19 thoughts on “The Obamacare Slow Leak”

  1. Uninsured are in the list of people taxed not given money. Also the healthy are taxed to benefit the unhealthy or old.

    So let’s think about this logically. Let’s say you had a marketplace to easily sell your wares, basically no price sensitivity due to the subsidies, and little or no competition. From a market perspective doesn’t that sound extremely enticing? I think companies like Aetna are trying to send a message rather than do what’s best for themselves and their shareholders. Namely price gouge.

    1. Uninsured are taxed only if they do not purchase Obamacare. But I am not talking about them. Second, you assume that businesses are always selfish, or that is, that their owners are always selfish. But why aren’t government officials selfish? Do we have one human nature for one group and another for a different group? Price gouging is a really ambiguous term, and very difficult to argue has occurred. In this case, clearly, costs for insurance companies have clearly increased. They cannot stay in business if they have to continuously operate at a loss. No firm can do that in the long run.

      1. Dr. Clauson, I wasn’t being mean. I was suggesting that due to a bad program that wasn’t completely thought through the incentives are there to raise prices sky high.

        I don’t blame insurance companies for raising prices. I blame them for not raising their prices further and staying in every market possible.

        Businesses are selfish. That is their job. Governments are selfish. It is their job in one sense.

      2. Since the ACA came into being, the fortunes of the companies in the DJ US Healthcare Providers Index have improved significantly.

        The index itself has nearly tripled over the last five years. In the long term, stock prices closely follow earnings, and the continuously rising prices suggest that investors have overestimated the damage the ACA would do to health care providers.

        Of course, some companies do better than others, but any notion that the ACA is bankrupting the majority of health care providers is ludicrous. I am not saying that is what you said, but I hear that a lot from those who really do not know what they are talking about.

  2. Democrats will simply say that it needs “fixing;” “mend don’t end.” But this leads to a broader follow on question; perhaps worthy of a further post. Why is it that government programs are alway in need of reform? Part of the main answer is that the market “reforms” a program through bankruptcy; there is a market test of satisfying customers–profit and loss. There is no analog on the government side. There is no necessary linkage to a government program’s continuation and its meeting constituents’ needs, as long as its meeting some key constituents need. As we learned in Animal Farm, we’re all equal, but some are more equal than others.

    1. I have to disagree with you. There is a test, voter opinion.

      The reason is because things need to adapt. In business it’s not succeed or go bankrupt, businesses change their tactics all the time, they are constantly in need of reform. But no one talks about it like that (unless it’s a pharmaceutical company then they should repent) because they just do it, government doesn’t just do anything. Here are two examples one from either side of the aisle. The American public is in favor of some more restrictions on abortion and they have been in favor for years, nothing happens. Same thing with gun control. If you don’t use the words gun control then the majority of citizens (including the majority of NRA members) are in favor of some more restrictions on purchasing guns. But nothing has happened with that.

      I did love animal farm, i was in high school when I read it, it’s an excellent reminder for us all.

  3. I appreciate the VOTE part. Being on Medicare – we are experiencing this big time and each year trying to find the policy (supplemental policy to cover what Medicare won’t take care of, which by the way is not FREE either) that won’t break the bank (our very small retirement from full time mission work). We pay for not only our care but the millions that DON’T or WON”T have their own insurance. Wouldn’t it be lovely if our Federal Government workers on the Hill had to figure out and pay for their own medical care?

    1. I agree that Congress should have to feel the repercussions of Obamacare, specifically by using it themselves. Furthermore, they should live under the same laws and programs they create for the people they are “serving,” seeing as there is very little incentive to pass the unpopular but necessary legislation.

  4. “We pay for not only our care but the millions that DON’T or WON”T have their own insurance. ”

    Which is why in large part all are required under the ACA to have insurance–or pay a penalty if they choose not to do so.

    That is one of the better aspects of ACA. Too many want to be free not to buy insurance yet want to be free to call 911 when a heart attack or stroke hits.

    1. The individual mandate is nothing more than governmental parenting. The true end goal of the left has, is, and always will be, government controlled single payer. In 2009-10, opposition to single payer was too great for them to overcome. In my opinion, the resulting ACA was intentionally constructed to make a system so confusing and burdensome that in time the opposition to government controlled single payer will greatly lessen.

      1. Sounds like something one would hear from a talk radio channel.

        Do you not understand the benefits in strongly encouraging people to buy health insurance? I don’t like paying higher rates for people who refuse to buy their own plans and then run to the inefficient and costly ER as soon as they feel out of breath.

      2. Do you deny that single payer is the eventual goal that the left wishes to reach?

        And I understand perfectly the reasoning behind the individual mandate. Why must you assume that because I have issues with something you clearly support that that somehow means I don’t understand it?

  5. Obamacare, like many government programs, has its roots in a desire to help those among our society who are less fortunate. However, I believe that this program was rushed into use without proper time taken to predict and prepare for the negative impacts that its implementation has caused.

    1. “However, I believe that this program was rushed into use without proper time taken to predict and prepare for the negative impacts that its implementation has caused.”

      So true. Personified by Nancy Pelosi’s “We have to pass the bill to find out what’s in it”.

  6. “Do you deny that single payer is the eventual goal that the left wishes to reach?”

    Obviously some on the “left”–wherever that is–would like that.

    Your conspiracy theory is what I take issue with. The notion that the ACA was “intentionally constructed to make a system so confusing and burdensome” sounds like something some kook on talk radio would say.

    Do you have any EVIDENCE for this outlandish claim? Or do you just FEEL it?

    The individual mandate promotes individual responsibility and discourages freeloading. Not surprised you would oppose it.

    You may have a career as a Trump doublespeaking spindoctoring hack. Update your resume, lol!

    1. “Do you have any EVIDENCE for this outlandish claim? Or do you just FEEL it?”

      I believe I said “in my opinion”. So, yes, I FEEL it. I was not making a declarative absolute statement. I acknowledge I could be wrong on it.

      “The individual mandate promotes individual responsibility and discourages freeloading. Not surprised you would oppose it.”

      What makes you think I support freeloading? Because I do not care for you chosen method to combat it? Who knows, maybe if done in a less intrusive or heavy handed way different from the ACA, I might be open to some sort of mandate. After all, I acknowledge that in the past, many Republicans, not just Democrats, spoke favorably of such mandates. If you think my dislike for a mandate is purely partisan, you are mistaken. If you think that I do not question why many of those who once favored it now oppose it you would be mistaken. If you do not think that I recognize that there are positive things in the ACA, you would be mistaken. For instance, I look favorably on the pre-existing conditions aspect of the legislation. That is also one possible area in which I recognize the mandate has some usefulness because if everyone waited until they needed insurance to get it then of course it is a major problem. On that, which you mentioned, you are right. But the simple fact is that I dislike anything that lets the government force anybody to do anything. Whether the mandate is good or not, beneficial or not, doesn’t change that. It is still governmental parenting and I believe it could be a dangerous precedent. So I would like to see what other methods might be viable to accomplish the same goals. You make the mistake of assuming that someone who would prefer an alternative solution other that yours to a problem does not recognize the problem in the first place.

      If anything, I guess I do not understand why you equate “forcing” with “promoting”. To me that does not encourage individual responsibility if the decision is not theirs to begin with. One can encourage one to make a certain choice, and getting health insurance should certainly be encouraged, but if they are forced to get it then phrases like “promoting” or “encouraging” are inapplicable.

      “You may have a career as a Trump double speaking spindoctoring hack. Update your resume, lol!”

      Will it ever be possible for you and I to have a discussion without such insults? I am trying to do better about that but you don’t seem to make much effort on your part. I did my best to not say anything that might be of a personal nature about you in this conversation yet you have managed to question my intelligence (“Do you not understand…” and “not surprise you would oppose it (discouraging freeloading)”) and refer to me (by the above comment) as a doublespeaking spindoctoring hack.

      If you do not want me to try to be more respectful toward you, just say so (or continue making comments like your recent ones) and we can resume (to the displeasure of everyone else) hijacking this site’s comment sections with a back and forth of personal insults once again.

      Now, if you would not mind, I would be interested if you have any response to the comments by Anonymous and myself regarding the reckless manner in which the ACA was instituted. Does your support of the individual mandate outweigh the very real problems the ACA has? Do you deny the very real seriousness of some of these problems?

      “Obamacare, like many government programs, has its roots in a desire to help those among our society who are less fortunate. However, I believe that this program was rushed into use without proper time taken to predict and prepare for the negative impacts that its implementation has caused.” – Anonymous

      “So true. Personified by Nancy Pelosi’s “We have to pass the bill to find out what’s in it” – me

      P.S. I just want to say for the record I generally agree that the motivation for the ACA was a desire to help the less fortunate. I simply question the means, not the ends.

      1. Our laws have two primary reasons for existing. First and foremost is protecting others from our actions. That’s why we are required to have auto insurance. That’s why we are required to have health insurance. The second reason is much more controversial and you would disagree with, to protect us from ourselves. That really seems to be the reason pot is illegal.

        I’d love to hear an alternate proposal that isn’t as heavy handed.

        By the way, the preexisting conditions part of the law is why we’re in this boat. It’s wealth redistribution. I agree with it, but it is what it is.

  7. I agree that even democrats need to realize that obamacare needs more than just a “fix.” It truly is unsustainable and paying for our own insurance and also the millions of people who don’t care to get their own insurance. I agree with statements already made, its intentions were to help the less fortunate but it was rushed into and it ultimately failed.

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