Obamacare: Arbitrary and Unfair

Superb article in the Wall Street Journal today by John C. Goodman president of the National Center for Policy Analysis, that pretty much destroys every argument Democrats are making to save Obamacare.

A sampling:

While the president and his party struggle to find more convincing reasons why we need ObamaCare, three huge problems won't go away.

An impossible mandate. For the past 40 years real, per capita health-care spending has been growing at twice the rate of growth of real, per capita income. That's not only true in this country; it is about the average for the whole developed world.

Clearly, this trend cannot go on forever. So what does ObamaCare do about that? It limits the government's share of the costs while doing nothing to protect individuals or their employers.

The law restricts the growth of total Medicare spending, the growth of Medicaid hospital spending and (after 2018) the growth of federal tax subsidies in the health-insurance exchanges to no more than the rate of growth of real GDP per capita plus about one half of 1%. This means that as health-care costs become more and more of a burden for the average family, people will get less and less help from government—to pay for insurance the government requires them to buy!

Unworkable subsidies. A family of four at 138% of poverty level is able to enroll in Medicaid in about half the states and obtain insurance worth about $8,000. Since the coverage is completely free, that's an $8,000 gift. If they earn $1 more, they will be entitled to join a health-insurance exchange and obtain a private plan that costs, say, 50% more in return for an out-of-pocket premium of about $900. That's a gift of more than $11,000.

At the same time, the employees of a hotel who earn pretty much the same wage as in the two previous cases will be forced to have an expensive family plan and they and their employer will get no new government help. The only assistance is the long-standing tax break that exempts employers' premium payments from federal income and payroll taxes. Even so, the ObamaCare mandate amounts to about a $10,000 burden on these businesses and by extension their employees.

These are only a few of the many ways in which ObamaCare's treatment of people is arbitrary and unfair.

Mr. Goodman didn't list two goals that Democrats had in passing the legislation: 1) Control. The ability of government to control health care and ostensibly its costs, but also control people "for their own good," of course; and 2) Ration health care. By making it prohibitively expensive for most Americans to get routine treatment, the government hopes to limit people's use of the health care system. Those high deductibles are a feature, not a bug.

Goodman also writes of the effect of Obamacare on the economy. Read the whole thing for some fascinating insights.

Superb article in the Wall Street Journal today by John C. Goodman president of the National Center for Policy Analysis, that pretty much destroys every argument Democrats are making to save Obamacare.

A sampling:

While the president and his party struggle to find more convincing reasons why we need ObamaCare, three huge problems won't go away.

An impossible mandate. For the past 40 years real, per capita health-care spending has been growing at twice the rate of growth of real, per capita income. That's not only true in this country; it is about the average for the whole developed world.

Clearly, this trend cannot go on forever. So what does ObamaCare do about that? It limits the government's share of the costs while doing nothing to protect individuals or their employers.

The law restricts the growth of total Medicare spending, the growth of Medicaid hospital spending and (after 2018) the growth of federal tax subsidies in the health-insurance exchanges to no more than the rate of growth of real GDP per capita plus about one half of 1%. This means that as health-care costs become more and more of a burden for the average family, people will get less and less help from government—to pay for insurance the government requires them to buy!

Unworkable subsidies. A family of four at 138% of poverty level is able to enroll in Medicaid in about half the states and obtain insurance worth about $8,000. Since the coverage is completely free, that's an $8,000 gift. If they earn $1 more, they will be entitled to join a health-insurance exchange and obtain a private plan that costs, say, 50% more in return for an out-of-pocket premium of about $900. That's a gift of more than $11,000.

At the same time, the employees of a hotel who earn pretty much the same wage as in the two previous cases will be forced to have an expensive family plan and they and their employer will get no new government help. The only assistance is the long-standing tax break that exempts employers' premium payments from federal income and payroll taxes. Even so, the ObamaCare mandate amounts to about a $10,000 burden on these businesses and by extension their employees.

These are only a few of the many ways in which ObamaCare's treatment of people is arbitrary and unfair.

Mr. Goodman didn't list two goals that Democrats had in passing the legislation: 1) Control. The ability of government to control health care and ostensibly its costs, but also control people "for their own good," of course; and 2) Ration health care. By making it prohibitively expensive for most Americans to get routine treatment, the government hopes to limit people's use of the health care system. Those high deductibles are a feature, not a bug.

Goodman also writes of the effect of Obamacare on the economy. Read the whole thing for some fascinating insights.

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