Thursday, July 5, 2012

Self Fulfilling a Prophecy

If you listen to opponents of the Affordable Care Act, and it is hard not to hear them with all that yelling, you know that they predict a cataclysmic failure of the law once fully implemented.  Costs will continue to rise, the number of uninsured will not change significantly, and the government will slowly but surely take over the system.  In response to the imposition of the individual mandate, the plot of Red Dawn will be played out across the cornfields of Amerika.  Opponents are hoping for failure. 

What you will also hear opponents saying just as loudly is that they are actively doing everything within their power to see that their prediction comes true.  They are actively working to insure the failure of the ACA.  If repeal doesn’t work, they’ll disembowel it.

Governors Bobby Jindal and Rick Scott of Louisiana and Florida respectively have announced that their states will take no steps to set up health insurance exchanges as called for under the law.  This no doubt pleases their constituents who voted for Jefferson Davis in 2008 as a write in candidate and believe that secession from the Union needs to be revisited.  The consequence of a state refusing to establish their own exchange is that the law then requires the federal government to step in and create the exchange.  At that point, we will no doubt hear the cries of Cajuns and Floridians screaming, “I told you that Obama was going to take over our health care!”, when in fact, Jindal and Scott are inviting the Feds in by their own stubborn partisanship.

One of the weaknesses of the ACA is the cost control apparatus.  The cost of health insurance to consumers is addressed but not the underlying expense of the health care services.  Consequently, health care costs may not slow as expected, or may continue their rise unabated.  Why?  The simple answer is that many key cost control elements of the ACA were stripped out before final passage.  Cost control guidelines were demagogued as ‘Death Panels’ and socialist rationing, and therefore removed.  What we are left with are price controls without cost controls.  When the cost of health care continues to rise, the Right will be in the position to say, “See? We told you Obamacare wouldn’t work”, when it was the GOP caucus that deliberately eliminated the cost controls components of the bill.

Another drawback to the ACA as currently conceived is not that the mandate is a tax, or penalty, or disincentive, or fee, or up charge.  It’s that the tax or penalty or disincentive or fee or up charge is too small.  When the time comes to have a tax or penalty or disincentive or fee or up charge amount that actually drives the preferred behavior, i.e. buy health insurance for yourself, that when the Right will pounce with the tried and true ‘tax and spend’ song and dance.  As designed now, it is cheaper to pay the tax or penalty or disincentive or fee or up charge and then buy insurance after you are sick since you cannot be denied.  The Right screams about the ‘tax’, but it is meaningless at its current level.

The recent SC decision on the ACA removed the Medicaid subsidy mandate.  Those funds are targeted to help lower the number of uninsured in the states.  Some GOP governors have already signaled their intention to refuse the federal funds.  In those states, the ranks of the uninsured will not go down, and they might even increase.  When that happens, I predict you will hear a familiar song:  “Obama promised his massive bill would reduce the number of uninsured, but that’s not what we’re seeing in MY state!”

Don’t worry kids. Romney has a plan to fix the whole problem.  He will repeal and replace Obamacare.  Of course, he will leave in place all the good things.  Kids can stay on their parents’ policies until age 26.  Insurers will still be required to honor the removal of lifetime benefit limits.  Those with pre-existing conditions will still be required to be insurable.  He will still expand access to the middle class to affordable coverage.  This is all part of his public statements. 

Here’s the good news – you won’t have to pay for these changes thanks to the magic of “market forces”.  If you never get sick or injured in your lifetime, rates are guaranteed to be affordable and stable.  Good news!  If you are healthy, you’ll be wealthy…and wise no doubt.  If unfortunately you are sick or injured, that is a problem with your self-control or personal responsibility ethic.  You will be be poor, but you have obviously brought that condition upon yourself.

Romney’s party is the same party that passed a prescription drug benefit without any mechanism to pay for it less than a decade ago.  Now they are promising all of the ACA goodies that poll well while blasting the only existing mechanism to pay for it, the individual mandate, the idea that the GOP championed publicly until 2008.  So much for hard choices. 
I have no idea why anyone believes that this group will come into power and address health care fiscal issues in a responsible and fair way.  They have no intention of doing anything on health care, a segment of the economy eating up 17% of GDP.  If you listen closely, they are yelling it.

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