The price tag for Obamacare has gone from shocking to preposterous. In March 2010, the Congressional Budget Office estimated the ten-year cost of the law at $898 billion; by February 2013, that number had climbed to $1.6 trillion, and it is likely that further revisions will be in the upward direction. That is a very high price to pay for a system that will, by the admission of its own supporters, leave some 30 million Americans uninsured. Long gone is the fiction pronounced by President Obama and repeated by his media enablers that the law will not add “one dime” to the deficit; the latest estimate is that Obamacare will add as much as $6.2 trillion to the long-term national debt, according to the Government Accountability Office. No thinking person takes President Obama seriously on fiscal questions, but those alleged experts and pundits who argued for Obamacare on fiscal grounds should be regarded as thoroughly discredited.
As mind-boggling as its price tag is, expense is not the main reason to repeal Obamacare. What is not sufficiently understood is that Obamacare does not reform or regulate health insurance: It effectively abolishes health insurance. Health insurance functions by creating pools of beneficiaries large enough that the incidence of particular health-care expenses — for everything from heart attacks to injuries in car accidents — can be predicted by actuaries with some statistical reliability, thus enabling costs to be distributed among beneficiaries over time. Obamacare demands that all insurance beneficiaries be offered identical rates regardless of health-related variables, and severely restricts the kinds of plans that may be offered. The most important variable is, of course, the question of whether somebody already is sick. Under Obamacare, an uninsured person who develops a serious illness can demand that he be insured at a rate no different from that of a person who had been purchasing insurance for decades before he became ill. The “individual mandate” was supposed to prevent that problem by requiring all Americans to purchase health insurance, but it is a mandate that manages to be both too invasive and too lax at the same time: The mandate will invite the micromanagement of individuals and businesses by the federal government, but Americans will in many cases find themselves financially better off paying the tax for not getting insurance (as Chief Justice Roberts has reformulated the mandate) until they become sick and need insurance. Because of that defect, the main rationale for Obamacare — bringing all Americans into a large insurance market that can then be regulated and subsidized to bring it into accord with the tastes of the central planners in Washington — will prove impossible to realize.
[Update a couple minutes later]
Good news, if true — ObamaCare isn’t forever:
It is not hard to envision future reforms that peel back the onerous regulations of Obamacare, lowering the costs to the government, while keeping the 30 million or so new beneficiaries under the federal umbrella. From a Madisonian perspective, if the central political problem of Obamacare was that it created too many losers alongside its winners, then a successful conservative alternative would be a free-market approach that makes these losers whole again without depriving the winners of their new gains.
We’ll see.
The amazing thing is that al of this was not only completely predictable (despite what Queen Nancy said about having to pass the bill to find out what was in it) but predicted, and obvious to anyone with half a brain.
[Update a few minutes later]
The ObamaCare IT nightmare:
Wow, what can go wrong here? Let me assess this based on my years of experience in this industry. The federal government is going to build 50 exchanges, using a data hub that doesn’t exist physically and in fact, the design hasn’t been solidified, and must be accessible to a variety of data processing technologies that range from archaic to old. Each of the 50 states have different eligibility rules, and with a significant number of states opting out, the federal government now has to learn the intricacies of each state’s Medicaid eligibility models which then scale to different applicability rules for different members of a given family. The thousands of pages of bureaucratic rules that will drive requirements haven’t been completed yet, and those requirements are needed to drive design not only for the application programs, but for the entire processing architecture. The issue of network, processor, and storage performance has to be decided, modeled and tested.
To complicate matters, the convoluted federal procurement rules for hardware and software have to be adhered to, which require mixing different hardware brands, software packages and service providers. Add to this compliance analysis to validate and revalidate trusted sources of data. All legal requirements at the local, state, and federal level have to be met by the design.
And last but not least, staffing up for customer support which requires hiring, training on applications not yet designed and real world tested, the creation of support documentation, building or retrofitting facilities for these folks, setting up backup sites for the required redundancies, plus hardening the sites for natural disaster power failures. Additionally, the people hired must meet the Equal Opportunity criteria, and all GUIs must be handicapped usable, as well as the facilities themselves. I could be here all evening defining additional work to be done. Oh, did I mention this will be done by next year. Now I know why this has never been attempted. We are a country made up of 50 separate and distinct states, with all their own rules of governing, and to make things more unworkable are all the federal rules that have to be adhered to. I think we the people are going to be safe for quite awhile here.
[Late morning update]
ObamaCare will increase individual claim costs by 32%.
But other than that, it’s great.