_
Possibly the Lord will have mercy on our still favored land, but, may
His will and purpose be accomplished.
Obamacare
Is Dead
nationalreview.com
[/] [/] http://j.mp/0OcareDead
or http://www.nationalreview.com/article/426550/obamacare-failures
It
doesn’t work because it couldn’t work.
Regardless
of whether there is a President Cruz or a President Rubio in January
2017, regardless of the existence or size of a Republican majority in
Congress, the so-called Patient Protection and Affordable Care Act
(ACA) has failed. The grand vision of an efficient pseudo-market in
health insurance under enlightened federal management — the heart
of Obamacare — is not coming to pass. Obamacare, meaning the
operating model that undergirded the law that Congress passed and
President Barack Obama signed with great fanfare — is dead, and it
will not be revived. What remains is fitful chaos.
A
brief refresher:
The
fundamental problem with ACA is that under it, insurance ceases to be
insurance. Insurance is a prospective financial product, one that
exploits the mathematical predictability of certain life events among
very large groups of people — out of 1 million 40-to-60-year-old
Americans, x percent will get in car wrecks every year, and y percent
will be diagnosed with chronic renal failure — which allows
actuaries and the insurance companies that employ them to calculate
premiums based on risk, thus funding the reimbursement of certain
expenses incurred by the insurance pool’s members. Insurance is, by
its very nature, always forward-looking, considering events that have
yet to come to pass but that may be expected and, to a reasonable
extent, predicted with some level of specificity. Under ACA,
insurance is retrospective. ACA mandates that insurance companies
cover pre-existing conditions, meaning events that already have
happened, which renders the basic mathematical architecture of
insurance — the calculation of risk among large pools of people —
pointless. Insurance ceases to be insurance and instead becomes
something else, namely a very badly constructed cost-sharing program.
Not
all cost-sharing programs are bad ideas. Medi-Share, for example, is
precisely the sort of voluntary, privately administered mutual-aid
program that could — and, I believe, will — end up displacing
government-run health-care programs entirely. But Obamacare is a very
different kind of beast: It creates a deeply perverse incentive
structure by combining compulsory coverage of pre-existing conditions
with a mandate that is enforced in theory more than in fact. The
mandate is necessary to prevent the ruthless exploitation of the
preexisting-coverage rules: If insurers have to cover you no matter
what, then there’s no point in buying insurance — thereby sharing
in the costs — until you are sick enough to need it.
As
James Freeman reports in the Wall Street Journal, the ACA’s
plethora of exemptions — there are at least 30 of them — ensure
that a great many people — 12 million last year — will simply opt
out. “It is easy to avoid or limit exposure to the penalty with
some simple tax planning,” he writes. In 2016, there were supposed
to be 21 million people enrolled in ACA programs; the Obama
administration currently predicts that the actual number will be
somewhat less than half of that. This was entirely predictable; in
fact, it was predicted in the pages of National Review, in my book
The End Is Near (and It’s Going to Be Awesome), and elsewhere.
Many
of Obamacare’s failures came fast and early. Strike one: “If you
like your doctor, you can keep your doctor.” Strike two: Obamacare
will save “the average family $2,500 a year on their premiums.”
Strike three: Obamacare will add “not one dime” to the deficit.
We all knew that was coming, just as we knew that people would
respond to the very strong incentives not to buy insurance by not
buying insurance.
Other
failures took longer to become manifest. The architects of Obamacare
are deeply distrustful of the role of for-profit companies in the
health-care business because, in their nearly pristine ignorance,
they falsely believe profits to be net deductions from the sum of the
public good rather than measures of the creation of real social
value. So they created incentives to set up co-ops, nonprofit
enterprises that would administer Obamacare plans in particular
states and jurisdictions. It was obvious from the beginning that if
Obamacare’s
perverse incentives created insurance pools that were older and
sicker rather than younger and healthier, these co-ops wouldn’t be
economically viable: You need lots of young, healthy insurance
subscribers to offset the costs associated with your older, sicker
subscribers. Many of us — myself included — assumed that the
federal government under President Obama would simply write these
co-ops huge checks to keep them afloat. We were half right: The
government is writing them huge checks, but they are failing anyway,
so fundamental is their economic unsustainability. Half of the co-ops
have gone belly-up already, including large, prominent, splendidly
subsidized ones in Kentucky, New York, Louisiana, and South Carolina.
Hundreds of thousands of customers have lost their coverage as a
result. Hundreds of millions of dollars in taxpayers’ money has
been poured into these enterprises, to no avail.
Almost
all of Obamacare’s basic promises have failed, it is an economic
shambles, and it is a political mess
Obamacare’s
partisans were confronted with the economic facts long before the law
was even passed, and their answer was: “Never mind the
economics, we’re the good guys, and you want poor people to die.”
Democrats argued that Republicans literally wanted to kill poor
people, that their plan was for the poor to “die quickly.” This
is a habitual mode of discourse among progressives: Reality doesn’t
matter; only the purity of Democrats’ motives matters. Obamacare is
what it is: Another damned five-year plan based on wishful thinking
and very little else.
The
fact is that Obamacare has fallen apart without Republicans’
dismantling it. Almost all of its basic promises have failed, it is
an economic shambles, and it is a political mess: Unsurprisingly,
people still don’t like it. Less than a third of Americans support
the individual mandate, three-fourths oppose Obamacare’s tax on
high-end health-care programs, and more voters oppose the law
categorically than support it. A quarter of voters say the law has
hurt them personally. The question isn’t why Republicans haven’t
gotten around to repealing and replacing it — the answer to that
question resides at 1600 Pennsylvania Avenue for a while, still —
the question is when Democrats will get around to admitting that,
purity of their hearts notwithstanding, they and they alone — not
one Republican voted for Obamacare — have created a mess that has
introduced nothing to American health care except chaos.
The
basic principles of meaningful health-care reform are these: Let
insurance be insurance; understand that ordinary, regular
medical procedures, such as physicals and prostate exams, are not
insurable events, and account for that in your calculations; the only
way to mitigate the effects of scarcity on health care is to make it
less scarce by expanding the supply of medical practitioners and
facilities; the only way to make insurance more competitive, and
therefore more affordable and more responsive to consumers, is to
increase the number of players in the markets; the best way to deal
with people who are, for example, profoundly disabled, children, or
otherwise unable to provide for their own care, is direct, clear-eyed
subsidy of their medical expenses, rather than laundering those
payments through the insurance market; so long as practicing medicine
pays less than filing frivolous lawsuits against doctors, there’s
going to be a lot of politically induced inefficiency in the system.
Of
course markets work for most people, and of course there are
exceptions to that. For 93 percent of the population, the solution to
health-care reform is: Let markets do their thing. The only
real argument is how big a check to write to those looking after the
other 7 percent, and how to structure the payments. That’s
a real fight, too, but it isn’t the one we’re having. Right now,
the Republicans and the Democrats are two political coroners arguing
over what time and cause of death to put on the paperwork; rigor
mortis set in long ago.
— Kevin
D. Williamson is roving correspondent at National Review.
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