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Affordable Care Act (ObamaCare)


April 2013 by Scott Swain
I had a brain tumor removed in 1995 and since then the only insurance I could find for myself is super expensive. Or I could sign up for ObamaCare. Healthcare is hard to confront because most of our problems are caused by our own poor choices in life. While I know that there are always exceptions like me, two-thirds of health problems are self induced; smoking, drinking, drugs, bad food, and no exercise. Our culture makes it easy; even encourages unhealthy consumption.

The idea and intention of something close to Universal health care is beautiful! I share that intent. I'm guessing you do, too. We know that it costs our economy when people are sick so therefore, it is economically beneficial for more people to be healthy. We know there is a huge disparity in income, so if we "spread it around," it seems there would be a net benefit. Sounds elegant and compassionate. And hey, given the statistics we have all seen, odds are anyone who is reading this is not part of the upper 1%, so you probably like the idea of you and your family getting nearly unlimited and guaranteed medical care, should you have health problems.

I'm a programmer so please bear with me as I get nerdy. In any equation, there are values on both sides of the equal sign. In this case there are benefits and there are costs. I mentioned the benefits. We love to think of the benefits! I am worried that not enough people are thinking about the the unseen costs now and in the future.

The "Affordable Care Act" (ACA) aka "ObamaCare" reduces choice for patients, doctors, and insurance companies. Insurance companies traditionally assess risk in order to set rates. When you force us to use the insurance companies and force those companies to ignore important factors like pre-existing conditions, rates necessarily rise. That's the surface economics. Just below that, we see rates rising for another reason: ACA forcing customers to use a small pool of insurance companies. Putting it simple, this means higher rates because of less competition.
 
Speaking of competition, ACA will also accelerate the loss of competition in regard to care givers. Why shop around for a better doctor or better prices when insurance pays for most or all of it and even provides you with a list of "recommended" providers? Most of us know just how much health care prices have risen over the past 40 years. When we reduce doctors' choices and incentives to be doctors, we draw less doctors into the field of medicine. Yet this law will bring more patients into the system. Less doctors but more patients. See where this leads? Quality drops as demand and prices increase.
 
I want to correct a common misconception. There is a belief that because ACA forces everyone to get insurance, this means more responsibility for those who would not have had insurance before. In other words, if everyone has insurance, no one can take advantage of the system (free emergency room, for example) and it becomes more fair. Let's look a little deeper.
 
(1) ACA forces insurance companies to ignore pre-existing conditions and other factors they would normally take into account when determining rate, deductible, and coverage. Think of a person with their house already on fire calling to get fire insurance and the insurance company being forced to pay up. This defeats the idea of insurance! This means insurance companies are being forced to take higher risks and thus, must necessarily - and will - raise their rates.
 
(2) The higher rates will be paid by everyone, except those who qualify for government subsidies. Remember: Government subsidies are paid by tax payers. And, as we know from our history of the ever rising costs of education, government subsidies drive up prices. This becomes a vicious circle of prices rising, requiring more government subsidies to keep them "affordable", higher taxes, etc. So actually, everyone pays more. Oh and if you think the ~49% of Americans currently not paying taxes means they actually do benefit from this system, then please remember this: (a) When those who provide other products and services, like food for example, pay higher taxes, they must raise their prices to stay afloat, and this hurts the poorest first and foremost. (b) The inflation our government knowingly creates by printing money is a tax on the poor because it raises the price of all goods and services. 
 
(3) In the past, most hospitals had insurance to cover the cost of people who can't pay. This added cost had a negligible affect on overall hospital prices. If you want to understand how health care has become so expensive, look to this article and video: How Government Solved the Health Care Crisis.

As if that isn't bad enough: Here is where it gets scary for me: Logically, this kind of system must lead to expansion of government's power to monitor and mandate how we eat, play, smoke, etc. Why would they not want to control behaviors that directly affect your health if others pay when you need medical care? Combine this common sense about human nature with (a) Recent revelations about how much the government has been snooping on us (NSA); and (b) The newly proposed CORE education standards with a massive increase in information gathering about our children and even parents, and yes, it gets ugly.

When the system starts showing it's deficiencies, what programs or people will be cut first? Will the high risk elderly be first? With an aging population, baby boomers retiring, underfunded liabilities (rising tide of cities that can't pay pensions, for example), rising unemployment, perpetual war, and a $16 trillion National debt, how can we possibly afford this? Remember what happened with RomneyCare in Massachusetts and how much of the State budget (over 50%) goes to RomneyCare right now?

Most health care Utopias (like Sweden and Norway) are good for basics but not for higher end care, which it is typical to pay separate for or even make a trip to another country and pay. And for those who can not afford private care, they often find themselves the victims of rationed care; waiting. Additionally, Europe and most nations get to funnel tax dollars into their healthcare system because the US pays for all or most of their National Defense; think NATO. Now remember Europe is broke! Let me say this again - they are broke supporting their social welfare systems (and yes, other factors, including massive corruption). So the point is moot because their systems could never work over long periods of time. At some point you have to pay the bills. When you design an unsustainable system, that is what happens. This is the current world wide problem because the bills of the previous generation are now coming due. This is why all major countries on earth are printing money like crazy. How's the health care in Greece? Norway has huge surpluses due to oil royalties so they don't count. So all of these examples used in talking points by political hacks do not work because they are all going broke. Same with Canada, by the way.
  
Finally, ACA has brought us this:
Charitable hospitals that treat uninsured Americans are being subjected to new levels of scrutiny of their nonprofit status and could face sizable new fines under ACA. A new provision in Section 501 of the Internal Revenue Code, which takes effect under ACA, sets new standards of review and installs new financial penalties for tax-exempt charitable hospitals which devote a minimum amount of their expenses to treat uninsured poor people. Approximately 60 percent of American hospitals are currently nonprofit. Charity for the uninsured is one of the factors that could discourage enrollment in ACA, which requires all Americans to purchase health insurance or else face new taxes themselves from the IRS. These hospitals are required to do a "community needs survey" and file additional paperwork with the IRS every three years to prove that the charitable hospital is still needed in their geographical area 'needed' as defined by ACA and overseen by IRS bureaucrats. Failure to comply, or to prove this continuing need, could result in the loss of the hospital's tax-exempt status. The hospital would then become a for-profit venture, paying income tax. 
 
How do we get from where we are now to a more healthy (pun intended) and sustainable system? While I would personally prefer removal of all government meddling (yeah, I'm a Voluntaryist), there are many ways we can improve our system. Some advocate "middle ground" solutions to reduce the pain of transition as much as possible while we move in the direction of less dependency on government.

One example:
A few points from one person's "Compassionate Transition Toward Less Dependency" strategy:
(1) Take money that is credited to businesses right now and credit it to consumers instead. People would be able to write medical expenses off in their taxes.
(2) Reduce the difficulties and expenses of malpractice litigation in order to reduce the prices doctor's have to charge.
(3) People with terminal illnesses would be tax exempt while they are suffering or incurring medical costs due to the illness.
(4) Guarantee that Medicare and Medicaid funds go to those programs.
(5) With over 50% of the National budget going to war spending, The author of this plan has repeatedly stated that cutting the war budget down to "defense only" would free up enough money to pay for the gradual transition as we slowly dismantle the corruption in our government.
Here is the full stated plan: ron_paul_written_plan.asp.

In spite of how much the ACA promises to potentially help me, personally, I am willing to face the painful facts and recognize how unfair it is to force others to take up the slack because of my misfortune. After looking at all variables in the equation, my opinion is that the Affordable Care Act will hurt doctors and patients and contribute to the economic decline of the USA.
 
Updates:
 
Look what is happening in California: 
http://reason.com/blog/2015/02/10/california-medicaid-conundrum-what-good










UPDATES:
2015-05-04 - Emergency Room Visits Continue to Rise Under Obamacare
 

Comment from a friend:
 
"While premiums are now limited, deductibles have drastically increased. The cheapest plan that Steven and I qualify for is a $300 per month premium (after a subsidy!) with a $13000 deductible! Meaning we'd be poorer because we'd be spending $300/mo, and we wouldn't even be able to afford to use the health insurance in an emergency. What ACA means for us is that we still don't have health insurance, and now we have to pay a yearly fine with our taxes. So worse off all around." 

 
What is Voluntaryism?
Democracy (and the "Republic" we have) is a majority dominating the minority. It's potentially marginally better than a monarchy but still coercive government. People with power over others will, except for rare cases, be corruptible and be high value targets for those with the most money. Is the solution to steal their money or to not subscribe to the idea that it's ok for some people to rule others?

 Contact Scott Swain for mediation and Emotional Intelligence Tools training for business, love, and parenting.