Why Obamacare 2.0 is Like Cap-and-Trade
This was the trick behind cap-and-trade: Politicians know that the only real way to reduce energy usage is to raise its price much higher. They also know that doing so would lose them their jobs, so instead of passing a simple carbon tax, they created a cap-and-trade system that would force private companies to be the bad guys. They then try to hide this basic fact with a lot of distracting arm-waving about green jobs and wind power.
The new Obama health proposal, which looks a heck of a lot like the old Obama health proposal (same basic features, same lack of detail) plays a similar game. Do you remember all that Obama talk about mysterious brilliant ways to reduce health care costs? Where did they all go? It turns out that the only real idea they had for reducing health care costs was to deny people care. They just try to hide this with a lot of distracting arm-waving about gold-plated insurance and electronic medical records.
This denial of service is unpopular. In fact, it is a great (and sad) irony that Obama is trying to harness anger at insurance companies that is caused mainly by denial of coverage for certain procedures with a system that will deny coverage for even more procedures. Just like carbon taxes, Obama has fixed on a scheme where once again he sets up private enterprises to be the bad guys to give himself some sort of quasi-plausible deniability. Obama is proposing artificial price caps on insurance premiums. The inevitable result:
For example, as I have written elsewhere, artificially limiting premium growth allows the government to curtail spending while leaving the dirty work of withholding medical care to private insurers: "Premium caps, which Massachusetts governor Deval Patrick is currently threatening to impose, force private insurers to manage care more tightly "” i.e., to deny coverage for more services." No doubt the Obama administration would lay the blame for coverage denials on private insurers and claim that such denials demonstrate the need for a so-called "public option."
Alan Reynolds has more. And Peter Suderman. And Phillip Klein points to an interesting anti-progressive angle:
Like the Senate bill, Obama's proposal doesn't include a strict employer mandate, but it does penalize businesses who do not offer insurance to workers who then get their insurance through the exchange. The Obama proposal provides more subsidies to small businesses, and helps mid-sized businesses by exempting the first 30 workers when calculating the tax, but large employers who do not offer coverage would face higher penalties under the Obama proposal. In the end, the tax will make it more expensive for large employers to hire lower income workers (who qualify for government subsidies), and thus exacerbate unemployment.
My read is that this all takes a hodge-podge mess and, uh, makes it even hodgier-podgier.
By the way, my take is that there is only one health care cost reduction proposal worth talking about, and that is making individuals more responsible for their own health care costs, not less, thus creating incentives to do the thing we do for every other purchase we make: shop around.
