Democratic Solutions to ObamaCare

 

Democrats are fighting to preserve ObamaCare. In a recent post (What Americans Really Say About ObamaCare) I discussed their strategy and their claims that most Americans favor keeping this failing healthcare system.

But sooner or later reality will force them to consider changes to sustain the law. It’s only a matter of time until ObamaCare collapses of its own weight, when there are no insurance options on the ObamaCare exchanges in most states. When that happens what can we expect the Democrats to propose?

Karl Rove, writing in The Wall Street Journal, quoted Dr. Ezekiel Emanuel, one of ObamaCare’s original architects, who discussed his recommendations recently in an interview with Salon. Emanuel had three suggestions:

  • Renew billions in now-lapsed payments to insurance companies – to hide premium increases.
  • Raise penalties for violations of the Individual Mandate – to force more people to purchase insurance they don’t want.
  • Increase subsidies on the exchanges – to cushion premium increases for low-income Americans at the expense of middle and high-income families.

 

Renewing billions in bailouts to insurance companies has always been the Democratic response to ObamaCare’s failures. The Obama White House tried to do the same thing in 2015 but was thwarted by the Senate largely due to the objections of Senator Marco Rubio. The ACA provided these bailouts on a “budget-neutral” basis only, meaning insurance companies could only be bailed out the same amount that they paid in for excessive profits. When the losses greatly exceeded the profits, there was no money left for the bailouts. But the Obama administration tried to provide them anyway.

Bailing out insurance companies for their losses is simply making taxpayers foot the bill for the cost of a system that wastes money on unnecessary coverage mandated by the law and inappropriately priced by the law’s regulations. (We’re already $20 Trillion in debt!) The young and healthy are forced to pay more than the cost of their care while the old and sick pay less than the real price of treatment. This means the insurance pool is made up of far too few young and healthy people and too many old and sick. Throwing more money at the problem is a waste of the taxpayers’ money and doesn’t solve the real problems.

Raising penalties for violations of the Individual Mandate is just more government coercion to force people to purchase a product they don’t want. This was never considered acceptable in the history of our nation until the Affordable Care Act was passed – and even then it only passed muster with The Supreme Court when they considered this a tax rather than a penalty. If government can force us to purchase health insurance, what product will they consider next – solar panels?

Increasing subsidies on the exchanges only widens the gap between the middle class and the poor – and further discourages work. The marginal “tax “ of earning more but losing more subsidy has already been calculated to discourage employment by economists Casey Mulligan at the University of Chicago and Greg Mankiw of Harvard University. Mulligan calculated the marginal costs of working due to the perverse incentives of ObamaCare and concluded that they lower the return from working by 10%. Mankiw says the negative effect on workers results in a loss to the economy on the order of 5% of GDP – or more than $800 Billion a year. More subsidies will make this even worse.

Senate Majority Leader Chuck Schumer was recently asked for his recommendations to fix ObamaCare. In addition to the same suggestions offered by Ezekiel Emanuel, Schumer called for a “Public Option.” This refers to a government-run insurance company that offers insurance plans that would compete in the marketplace with private insurers. This idea was discussed in the original healthcare debate before the passage of the ACA but dropped from the final bill when even Democrats did not fully support it.

The truth is that a “Public Option” is simply a tool to force us into socialized medicine. Any government-run insurance plan will easily undermine private insurance because it can under-cut the price of insurance and eliminate the private competition – then lean on the taxpayers to bail out the government when it loses money. Soon there will be no private insurance market – and no way to get around a government-run healthcare system that chooses your doctor, your treatment and when or if you receive it.

All of the Democratic suggestions have one real purpose. They are just progressive manipulations to achieve their ultimate goal of total government control of healthcare. It has been their goal since the days of Teddy Roosevelt and they have no intention of giving up now when they are closer to that goal than ever before.

 

(Note: For more on the history of healthcare reform over the last hundred years, read my book The ObamaCare Train Wreck available through a link on this same page. For more on socialized medicine, read the second book, The ObamaCare Reality.)

 

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