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Obamacare

Most of the ground I will cover here I have been over already on this blog but I want to revisit the issue just to point out that it is playing out exactly the way I have predicted and to point out a few important points that some people may be missing about Obamacare.  I wrote this post over three years ago explaining how this bill was meant to destroy the private insurance market.  It deals with the specifics in more detail.

As most people know, a lot of people are losing their plans and experiencing dramatic rate increases in spite of the President’s numerous emphatic promises that this would not happen.  The line from the administration now is that these plans are being cancelled because they are substandard plans which don’t offer all of the coverage that people need.  Leaving aside the fact that the President never once promised that if you like your plan you can keep your plan as long as the government considers it adequate, this is still a complete lie.

It is true that plans are being cancelled because they don’t meet the minimum requirements set forth in the bill.  But these requirements are not in there to protect you from substandard insurance plans.  They are there because the point of the bill is to transfer wealth from the healthy to the unhealthy.  The way this is done is by forcing everyone to buy certain coverage even if they don’t need it and forcing them to all pay (more or less) the same price.  In this way the insurance companies lose money on the sick people but make it up by charging the healthy extra.  This wouldn’t be possible in a free market because companies would compete over the healthy people.  This is why insurance companies support the law, it creates a price-fixing cartel by which they can extract money from their customers without having to worry about that pesky competition.

In light of this it looks like there aren’t going to be enough healthy people signing up to be the cash-cows in this system.  This seems to be engendering a sense of comfort among many conservatives who think that Obamacare will collapse without these people supporting it.  This is a gross misunderstanding.  If you believe that, when healthy people don’t sign up and insurance companies start losing money, the government will wake up and say “hey, maybe our attempt to take over and micromanage the health insurance industry was misguided, I guess we better just let the free market handle it” you haven’t been paying attention for the last hundred years.

It won’t be Obamacare that collapses.  There is no provision in the bill saying that if it doesn’t work, it will go away.  It will be the insurance companies that collapse.  And this is exactly what progressives want because then they will simply say that the evil private insurance companies failed us and the government has to, reluctantly, move in and take over the whole industry.  But don’t worry this means everyone will get all the healthcare they “need” and it will be cheap and easy and provided by pixies and unicorns with breath that smells like sunshine.

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