I read a book about ObamaCare and wonder how the contender lost the 2012 election. Had as much been known about the Affordable Care Act during the election as is known now, I suspect the outcome might have been different. Maybe politicians really don’t read and understand proposed and existing legislation. 

Why didn’t Romney know the themes of the Affordable Care Act are upside down? Was he another pretty face in an empty suit? He didn’t seem to focus on the act’s real issues.

1. The act takes money, via Medicare reductions, from older Americans — people who often have medical conditions and expenses — and sprinkles the green stuff liberally on younger Americans, who are usually pretty healthy. The reason? To make it “affordable” for younger citizens to have health care and to incent them to contribute to health insurance, thereby, pumping more dollars into the system, dollars that will be available to older citizens, at least in theory.

2. The act is not uniform. Businesses that have an ax to grind with certain parts of the regulations seem to be able to get waivers, so they may not have to comply. This helps destroy the idea of universality and can change the cost-benefit calculus.

3. It was reported a week or so ago that an exchange in California is initially going to charge $200 monthly for a single person in his or her 20s to have health insurance.  If that person does not buy insurance (or has it through his or her employer), he or she will be subject to a $95 yearly ($7.92 monthly) tax. It was thought of as a penalty originally, but the Supremes said no, it can’t be a penalty, but it can be a tax — or 1 percent of income, up to a maximum of $285 ($23.75 monthly), whichever is more. 

Hmm. If I were in my 20s and not overloaded with cash, would I take the monthly $7.92/$23.75 option or the monthly $200 option? But wait, there’s more. It seems as though I can simply take the $7.92/$23.75 option until I get sick. After I’m sick, I can buy into the exchange and use it to pay for my condition. When I’m well again, I may again choose to opt out of the system and pay the monthly pittance. Even if the $7.92/$23.75 is indexed, one must remember that today’s California exchange rate of $200 monthly will rise too, and so there may always be a similar variance between the penalty — oops, tax — and premium. If young people avoid the overall plan, the horrible result will be higher health care costs for older Americans. Gaming the system in any way is likely to destroy the hoped-for result of universal coverage. 

4. One projection in Nick J. Tate’s “ObamaCare Survival Guide” (Humanix Books, 2012) shows the 2019 projection thusly: uninsured Americans without Obamacare equal 41 million; uninsured Americans with Obamacare equal 41 million. Folks, it’s the same number. Because of the Affordable Care Act, Oklahoma has to, on December 31st of this year, give up its Insure Oklahoma plan. The net reduction in insured people, according to our local newspaper, will be about 9,000. I’m betting there may even be less insureds with the new regime than the old — in other words, author Tate’s prediction may be conservative. Again, this is likely to drive costs up, not down.

5. It’s not just about Romney. Hospitals, which seemed to originally embrace or support the act (no more of those nasty uninsured cases in the ER daily), are now in increasing financial trouble. Some doctors are now threatening to leave the profession because of lower reimbursement rates (which are part of the act; however Congress rarely ever enforces reductions in such allowances, bringing into question the funding logic). And the AARP, the mighty and massive senior citizens’ organization, endorsed the act — what was its leadership thinking at the time? How can reductions in benefits and likely increased costs for older Americans be good for members? Why would seniors continue to financially support such an organization? What kind of deal was struck between AARP and Washington? 

Romney had a millstone around his neck during the presidential election — when he was governor, he set a plan in place in Massachusetts that wound up insuring 97 percent of the state’s citizens, which may be a far larger percentage than wind up with insurance under Obamacare. Pretty much the same people that designed RomneyCare moved their designing skills to the federal plan.  

However, no matter how hard the compromise and how painful watching the butchering of the act through the typical chopper/shredder political process, the Affordable Care Act may turn out to be bad sausage. Only time will tell. My personal opinion is that there’s nothing wrong with universal coverage, but there must be fairness and logic across all the bands of society.

One of the reasons Social Security works well is that President Franklin D. Roosevelt was smart enough to know it had to benefit all Americans; if it did not include well-to-do citizens, it would die a future political death quickly. I’m not seeing the same inclusionary process in the Affordable Care Act. It may just wind up insuring different people and winding up with the same net-number of insureds. If the care is not universal and does not work, we all lose.

Have a terrific week and keep your health insurance healthy.

 

For more from Richard Hoe, see:

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