Once again, there is so much out there that I am somewhat at a loss to focus on a single issue.  If you haven’t been hibernating early, the newsworthy items include the refugee problem, the Paris and Mali attacks, the VA travesty regarding its treatment of veterans, the Missouri-inspired (or was it Yale) episode of alleged aggressions of all sorts, but especially supposed racial offenses, and its associated threat to free speech, the election cycle for both parties, the national debt (but that’s passé, right?), etc.  So I will choose Obamacare and weigh in on the earlier post by my colleague Jeff Haymond.

Obamacare, ACA as it is formally called, is a special interest of mine because in 2010 I spent about two or three days of my otherwise busy life to read the massive text of the bill, in order to speak intelligently on it.  That time, while partially wasted, has also been partially valuable.  The back and forth in the comments of Dr. Haymond’s blog sometimes indicated that some have not read the law or the regulations that followed in order to implement it.  So let’s get into it a bit.

The text of the law was written in such a way as to accomplish several major goals: (1) leave the widest possible latitude for interpretation to federal agencies by vague language and a whole lot of delegation (this can also be seen in the sheer volume of the law, with its hundreds of references to other statutes); (2) the overall aim was to establish a health care system that in which one group would end up subsidizing another group—a hallmark of welfare statism—without much thought about other consequences that might ensue, including the higher premiums, higher deductibles, etc., but achieving the goal of narrowing choice; (3) the overall scheme also involved both new taxes (some 118) and mandates to purchase, the latter necessary in order for subsidies to work; (4) other underlying problems such as non-portable insurance, tort reform, etc, were deliberately ignored (check the congressional history), for obvious reasons; and (5) other odd policies that have had unintended negative consequences, such as for example, the incredibly complex and costly coding regulations related to the computerization effort (don’t get me wrong, I generally favor such things, but this one was ill-conceived and costs us and doctors a lot of money in time).  The bottom line is that the ACA, though touted as a way to get affordable insurance to everyone, was actually intended as a redistributive measure, but one that ignored most unintended consequences of that single-minded focus as well as problems it did intend to ignore for political reasons.

Now there are many issues to be pursued relating to ACA, and many were raised in the comments of the earlier post by Dr. Haymond.  I agree with Jeff Haymond, as I elaborated above, that the aim was a subsidization/redistribution of resources.  But to work, as Jeff said, required enough enrollment to actually sustain the subsidization scheme.  That hasn’t occurred.  Hence the higher costs which the ACA intended to lower, but because of the political zeal and the economic ignorance, have not materialized—at least not for most, except for a certain subset of people.  In addition, we all have lost the value of more choices with more cost options, we have not addressed portability, and we have not even come close to dealing with tort reform.  Insurance companies too have suffered, as we see in the case of United Health, despite the claims of some that they are the “big, bad, greedy” profit-mongers.  Well, guess what, they do need profit to operate, because if they don’t get profits, they can’t pay shareholders (or bills), so they in some cases either have to raise premiums, raise deductibles or go out of business eventually, or reduce service.  Those are not good options.

Are there alternatives, Jeff Adams would like to know?  (see Comments, Haymond blog)  Yes, and in fact the GOP did propose several, but Harry Reid nixed them by disallowing any vote.  And moreover, conservatives also have alternative plans.  Even I had an alternative plan.  These plans incorporated elements of the concerns expressed by many regarding affordability, but also considered that the market, properly functioning (properly, I repeat), would offer the best means to achieve that goal without compromising quality of service.  I don’t know where you would look for these proposed bills, but I am sure they can be found somewhere on the congressional websites or the sites of individual representatives and/or senators.

For Änonymous,”who argues that Obamacare does provide incentives for insurance companies to try to raise health care costs, I reply that if that is so (and I am not denying the possible unintended incentive, but questioning the factuality here), then why don’t we opt for a market approach that introduces real competition which tends to drive down costs and prices—if it is allowed to operate competitively.  What we have now isn’t really competition, but heavily regulated oligopoly.  An example is allowing competition among insurance companies across any and all state borders, instead of state regulation which is often just cronyism.  Another is to unbundle health insurance from the workplace and allow individual choice.

Jeff Haymond is correct to raise  the question of why higher deductibles are inherently bad.  Perhaps I want to pay those to get lower premiums, or have plenty of cash to use upfront.  The point is, we should not make it impossible for consumers to choose higher deductibles, even as we also allow lower ones to be available.  But you really only get that in a market setting.  And after all, isn’t it consumers we want to satisfy?  Moreover Anonymous says lower income people “take these plans because they are available.” If he means that is all that is available, then an argument can be made that the reason that is all is because of Obamacare.  That statute has limited choice and forced certain plans into higher price ranges.  Some people do end up getting comparatively lower-priced plans either because they are directly subsidized (due to low income) or their previous health care costs were higher.  But the data are beginning to show higher costs in one form or another for most.  And as I said, choice is also limited.

For political reasons, Obamacare may be with us for some time, but economically it was far from the best possible solution to rising health care costs.  That is what I most would like to convince those to the political and economic left of me to grasp.  I agree that health care was a big problem before Obamacare, but the solution is itself an even bigger problem, and will only get worse over time.