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Jan 8, 2017

Obamacare: A Legacy Unsustainable Death Spiral



Obamacare passed with no Republican votes. Democrats made all of the false promises. "If you like your doctor, you can keep your doctor. If you like your plan, you can keep your plan." There was no way either of those statements could be true under the law that the Democrats passed. Everybody except Nancy Pelosi knew it. She "had to pass it to see what's in it." Democrats made all of the enabling regulatory decisions, like the contraceptive mandate. Democrats own Obamacare.

Obamacare is in a death spiral right now. As rates go up, fewer, sicker, people sign up, then rates go up more. Obamacare was designed to be a huge government health subsidy program, but Democrats claimed that it wouldn't need subsidies. So Marco Rubio made them put it in writing. One of the funding bills says that there will be no insurance subsidies from the government. That's why all of the low ball rates have bankrupted the made-for-Obamacare coop insurance companies.

There is no way an individual insurance market can be sustainable without a prior condition exclusion. Everyone just waits until they are sick to sign up. 
The penalties for no insurance would have to be almost as high as the cost of the insurance to induce people to buy the insurance.

The program also didn't allow rate differences by age. This was designed to force younger and healthier people to subsidize older, sicker people. Unfortunately, the younger and healthier people are having trouble finding jobs in Obama's crummy economy, so they can't afford the overpriced insurance.

The Democrats brag that they have a plan. The Democrats say the Republicans don't have a plan. The problem is that the Democrats' plan is a gigantic failure, so it's not a real, sustainable alternative. The Republicans want to use free market mechanisms to lower the overall costs of healthcare in the economy. The Democrats say that's not a plan, because the government has no active role. Given how badly the government has messed up healthcare under the Democrats' Obamacare plan, do you really want the government to be more involved in any new plan?

One area the federal government might fix is in the supply of medical care. You do not need to be a full-fledged MD to see patients with ordinary complaints like sore throats, runny noses or minor injuries. In the US Military, these functions are handled by Physicians' Assistants and Nurse Practitioners. Perhaps the new healthcare plan should establish federal licensing requirements for Medicaid recipients that would allow them to be seen by Physicians' Assistants and Nurse Practitioners whether the state licensing laws allow it or not.

Another thing Congress could do is limit malpractice awards in Medicaid cases to no more than twice the economic damages. This would lower the cost of delivering healthcare to the needy. The federal government should also set up high risk pools for people with uninsurable preconditions.

The government could mandate published prices for procedures for both doctors and hospitals. The statistics should include both the list price and also the average price paid by private insurance as well as the average price paid by government sponsored insurance. If the government can force nutritional labeling standards on food products, it should be able to force published price lists on hospitals and doctors. The trend away from first dollar health insurance coverage is well under way. The federal government should take steps to lower built in costs, increase information available to consumers and encourage price competition.

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