An Inconvenient truth: ObamaCare

To start off, I am very democratic.  I believe deeply that there is something wrong with America's health care system.  Costs are spiraling out of control and if nothing is done to contain them it will hurt families, businesses of all sizes, and devastate the economy as a whole.  This is because health care is currently roughly 18% of our GDP, and costs are rising faster than wages and inflation.  People who really study health care costs predict that it is unsustainable.

ObamaCare does a whole lot to ensure that people get insurance.  It is undoubtedly a monumental piece of legislation.  However, I still find several faults with it.  

First, none of the actually good reforms come into effect until 2014.  The individual mandate, which I will discuss more in-depth later, begins in 4 years.  Insurance exchanges, a central component of common dreams's "public plan choice" doesn't take affect until 2014.  If you have a preexisting condition, private insurance industries will not have to give you insurance for another 4 years.  And I would be fine with all of that, if it weren't for the fact that the delay isn't based in common sense, it's motivated by politics.  

The 4 year delay is a desperate attempt to gain political clout because it creates a skewed estimate from the Congressional Budget Office (CBO).  It does this because when the CBO does their 10 year estimate, it will be taking into account 10 years of taxes (the taxes start immediately), but only 6 years of actually giving out benefits.  That is it.  That is the sole reason.  The delay allows democrats to wave their arms and say "look!  We save money!"  When the reality is that they will be doing absolutely nothing to prevent a rise in healthcare costs and actually devastate the federal deficit over the long-term.  This bring me to my second point.

It does nothing to keep healthcare costs from rising at the rate they are now.  I consider myself relatively knowledgeable about this fiasco, and of all the provisions I know of, not one keeps the cost of premiums down.  They start taxing immediately, that's for sure.  Anyone who was hoping they could pay a 10 percent tax when they go to tanning salons has their wishes fulfilled.  But there are literally zero measures that attempt to contain costs.  Sure, there are shenanigans like the high-risk pools, employer mandate and the aforementioned individual mandate, but they won't do much.  I'd go through every provision I know of and disagree with it, but that would make this post unnecessarily long.  It will have to suffice that I take down the mantlepiece of the reform, the individual mandate.

The individual mandate has so many flaws it's almost humorous.  But before I discuss those, it's funny to point out that the idea originated with the ultra-conservative heritage foundation.  They also thought that Americans needed more choice in the health care market - but that was 10 years ago.  Now that Obama's president and actually trying to pass these things, almost all you can find on their website is reasons why his reforms fail.  However, there are specific reasons why the individual mandate, the glue that holds the reform together, will ultimately fail when it's enacted in four years.  Here are a couple of them:

Lack of compliance.  There is an excise tax that is the government's method of enforcing the mandate, which could ultimately be cheaper for individuals to pay than health insurance.  Any lack of compliance magnifies financial pressures because the private industry needs large numbers of healthy people to offset the costs incurred from sick people.  And the individual mandate on its own does nothing to control costs.  It is likely that people will say Massachusetts proves it will work, however the Massachusetts plan just proves the above argument because they currently allow 20% of sick people to go without insurance through exemptions.  There is zero reason to believe the same problem will not exist with the federal mandate.  The theory is that if everyone has health insurance, then the sick people will comprise a smaller percentage of healthcare costs because there are more healthy people in the system.  However, this falls prey to the fact that the government pays for 85% of uncompensated care right now.  This means that there will be a miniscule effect on private insurers, who are the ones that need cost reductions.  

It's impossible to define a minimum benefits package.  Like with auto insurance, the government will be forced to define how much health insurance people will have to buy.  This is another area of weakness.  Every single special interest group will want their type of care to be included in the minimum requirements.  And if the last year has taught us anything, it's that Washington is great at listening to special interests.

Now, I think a public option is a great way to solve these problems.  When there's a government run healthcare coverage program that can use taxpayer leverage and bargaining power to force reforms in the private industry, healthcare costs will go down.  This post is already too long, so I don't really have space to go into specifics, but I advocate an immediate public option as a solution to the problem.

All of the problems above bug me because Washington has spent over a year debating, thinking, and arguing about health care.  The best thing they can come up with is a politically motivated piece of garbage that will be worse than nothing.  And I'm certainly not the only one who thinks this reform will fail.