Sunday, March 26, 2017

ObamaCare Lite came ... and went

Anyone concerned with ballooning government debt should be against the Republican replacement for ObamaCare, which I'll call ObamaCare Lite. 

It now appears enough Republicans did not like the ObamaCare Lite legislation, so it is now on hold.

Obama took 17 months to build a Democrat consensus to support ObamaCare -- some Democrats had to be bribed with special deals for their states.

Republicans seemed to think 17 days was enough to build a consensus = stupid.

ObamaCare Lite did not take away the freebies included in ObamaCare, and was probably worse than the original.

ObamaCare too often prevented insurance companies from charging high-risk customers more than low-risk customers.

To make ObamaCare work, young and healthy people had to buy medical insurance -- but the penalties if they didn't, especially at the beginning, were too low to force healthy young people to buy.

In the Supreme Court, Justice Roberts said ObamaCare penalties were too small to compel anyone to buy insurance
(or else I assume he would have found ObamaCare to be unconstitutional).

Roberts considered them to be a "tax", rather than an 'unconstitutional coercive penalty to force a commercial activity'.

The Republican "ObamaCare Lite" bill:
This replacement for ObamaCare would have removed all "taxes" on people who didn't buy insurance, and penalties on employers who didn't provide insurance to their employees.

But Remember:
Without lots of healthy young people buying medical insurance, and getting little in return, insurance premiums have to be high!

ObamaCare Lite would have made that ObamaCare problem worse!

I think many healthy people used to buy medical insurance pre-ObamaCare only because if they waited until they got sick, most insurance companies would not sell them a policy. 

Allowing people to buy medical insurance after they need it is like allowing people to buy auto insurance to cover the damage after they had the accident. 

ObamaCare mandates and penalties were always unpopular.

ObamaCare Lite would have kept the popular parts of ObamaCare
(subsidized access, pre-existing conditions waivers, expansion of children’s coverage until age 26) 

ObamaCare Lit would have ended the unpopular parts of ObamaCare (mandates and taxes/penalties). 

-- As a replacement for ObamaCare penalties, ObamaCare Lite would allow have allowed the insurance companies to charge a 30% premium increase for new customers who had allowed their previous medical insurance coverage to lapse.

But a 30% premium increase would have been too small to force many healthy people to buy insurance.

-- The bill would have reduced choices and increased premiums faster than the original ObamaCare!

-- People buying ObamaCare Lite insurance would mainly be those who got enough tax credits to get it "free" or nearly free ... and really sick people whose insurance premiums would have been cheaper than their medical bills.  

-- Many people would have bought catastrophic plans with very high deductibles to pocket the difference between their tax credits and the lower cost of the catastrophic plans. 

-- If they got a serious medical condition, with high out-of-pocket expenses likely, they could quickly switch their coverage from a high deductible plan to a low deductible plan, probably without paying the 30% premium for lapsed coverage.

Unlike Libertarians, Trump believes government solutions can work as long as they are “smart.” 

ObamaCare Lite was not smart.

Our bloated and unsustainable health care system consumes 18% of GDP, compared to 10-12% of GDP in most of the world's social welfare democracies.

$24 trillion in various health care entitlement spending is projected over the next decade -- that's nearly twice the projected $13 trillion spending for Social Security over the next decade.

ObamaCare barely changed the ObamaCare 'entitlements':
-- The combined Federal / State cost of Medicaid over the next decade, for one example, would be $8.5 trillion under the current ObamaCare law -- and maybe $500 billion less under ObamaCare Lite -- a mere 7% reduction.

The Main Problem With US Health Care:
The current third-party payment system for medical care almost eliminates careful consumer shopping behavior in the medical industry.

Almost everything is paid for by third-parties, so people are not price-conscious, cost-minimizing consumers who have a lot of their own money at risk.

The medical industry has also become Washington's greatest crony capitalist lobby.