What do National Review, The Hill, The Orange County Register, The Week, The New York Post, The American Spectator, NPR, Vox, The Huffington Post, The New York Times, and The Washington Times all have in common. At first blush the answer is probably nothing substantial other than that they are all media outlets of one fashion or another that publish in English (spoken or written) in the United States and that each tends to cover political content of the day. But there the commonality seems to end.
National Review, The New York Post, The American Spectator, and The Washington Times are all to the right-of-center while the Hill, NPR, Vox, The Huffington Post, and the New York Times are left-of-center and The Orange County Register and The Week sit somewhere in-between.
But the fall of 2015 saw each of these publications issue articles on the structural problems and the corresponding growing issues of the Affordable Care Act (ACA). In other words, concerns about the economic integrity of the system, more commonly known as ObamaCare, are being raised all across the political spectrum and that, in and of itself, is worth noting. Regardless of your politics, the immutable facts of economics remain constant and, unfortunately, merciless.
Now to be clear, I personally like the overall aims of the ACA. The idea of opening access to regular health care to the largest possible segment of American society is laudable. As is the aim of lowering cost by competition and keeping coverage transportable by lessening the ties between policy and place of employment. These are admirable requirements that are firmly couched in the ethical notion that man is intrinsically worth something – that each human being has a value quite independent of his economic output.
But while we can ignore economics in defining our ethically-based goals we can’t ignore it in our plans to achieve these goals. Immutable laws of nature, both inanimate and human, must be taken into account. As well discussed in this interchange
there is no logical support that allows us to go from the idea that human life, in general, is the most valuable thing in society, to the idea that an infinite value should be place on an individual human life, since there is not a infinite amount of resources to apply to the well-being of any person.
And yet, the enactment of the ACA seems to have been done in full denial of this economic reality of life. The evidence for this is found peppered throughout the coverage that came out this past fall.
In the article Obamacare Is Dead, Kevin D. Williamson of the National Review, notes that of the 21 million participants needed to provide a cost-sharing base, only about half are actually participating. In addition, the current demographics are heavily weighted towards the sick and/or elderly, who are looking for a payout, while the younger and healthier buyers, needed to offset the rising costs, are staying away. There are several mechanisms used by this latter group to ‘opt-out’. Some decide that their most rationale course of action is to simply pay the penalty rather than join. Others, 12 million in last sign-up cycle, took advantage of the 30 exemptions. As a result, and despite the federal subsidies, already half of the co-ops have gone under financially. Williamson also points out that the ACA further distorts the notion of insurance, turning it into a badly-constructed cost-sharing program, and that private industry (e.g Medi-Share) does a much better job of delivering health care than government.
Robert Pear of The New York Times points out in his article Many Say High Deductibles Make Their Health Law Insurance All but Useless that many consumers are complaining that ‘sky-high’ deductibles make it impossible to actually go to see a doctor. Pear cites many cases, the most startling being a median deductible of $5000 in Miami, with the obvious implication that there are policies for which the deductible is even higher (probably much higher depending on the spread of the distribution).
Deductibles this high cause a perverse outcome in which the healthiest people stay out of the exchanges altogether. The reason is that the law gives them a disincentive. David Catron, of The American Spectator, argues in his piece entitled ObamaCare Endures the Death of a Thousand Facts, that a healthy consumer faced with high deductibles (e.g. the Miami median of $5000 mentioned above) is quite rational in electing to give up their health coverage, even if the premiums are low, and pay the small penalty ($695) – it is cheaper to stay away. This approach is especially attractive since the consumer can’t be denied coverage later if a catastrophic illness were to arise.
It is true that not all plans have high deductibles. Policies with relatively low deductibles use higher premiums to offset the cost. So the consumer has to pay one way or another – either up front with the premiums or on the return with deductibles. And, as Sarah Kliff of Vox notes (Why Obamacare premiums are spiking in 2016), it looks like premiums are heading up across the board. So even affordable premiums, independent of deductible size, may be a thing of the past. In her analysis, Kliff lays the blame at the feet of insurance companies who “underestimated how sick health law enrollees would be.”
But the flood of sick enrollees shouldn’t have unexpected and, therefore, underestimated. The ACA attracts the sick while giving the healthy (and their money) a reason to run and hide. These kinds of perverse economic incentives are at the root of massive losses in the state-run co-ops. Akash Chougule (Obamacare Enters a Downward Spiral as Co-ops Fail and Enrollment Slows) notes that:
- 22 of 23 co-ops lost money in 2014 despite receiving $2.4 billion in taxpayer support
- Iowa and Nebraska co-op offered artificially low rates causing a tenfold increase in enrollment over what was expected; this forced the co-op into liquidation
- Louisiana’s co-op went under due to “onerous burdens” sending 16,000 enrollees looking for new policies
Chougule also points out that individual-market insurance costs rose by 49% in 2014, so the additional increases that Kliff sees on the horizon amount to adding salt to the wound.
I could go on but I’ll stop here by noting that I barely scratched the surface of all the articles that are out there. Additional food-for-thought is easy to find. Here is a sample
- ObamaCare's predictable collapse – Rick Manning of the Hill
- Obamacare at 5: Sick and getting worse – Mark Landsbaum of The Orange County Register
- The quiet unraveling of ObamaCare – Shikha Dalmia of The Week
- A new taxpayer bailout to cover up ObamaCare’s failure? – Betsy McCaughey of the New York Post
- Many Health Co-Ops Fold, Others Survive Startup Struggles – NPR
- The Figment of Affordable Health Care - Washington Times
Each and every one, spanning all parts of the political spectrum, is touting the gloom and doom of the ACA. Each and every article serves as a reminder that there is no such thing as a free lunch. To bad the champions of the ACA didn't want to recognize that.