The decline of Obamacare

A couple of columns re: Obamacare. The first is the usual excellent analysis by Charles Krauthammer, who describes a process of devolution that I have posted about, as well. I agree with Krauthammer that there will be something that Obama can call health reform that will be passed by Congress this fall. The Democrats are not going to throw Obama’s administration under the bus by denying him his signature political issue. The caving of the “Blue Dogs” because they were given $100 billion in cuts to the program (money that can easily and stealthily be added later) is a symptom of that ultimate party loyalty.

That said, what ultimately emerges as “health reform” likely will  be far different from what the administration in its heady early days envisioned. The goal of Obama health care reform has been downsized to Obama health insurance reform. And even that is being diluted: Talk in the Senate now is to switch from “government option” (which several Democrats have now conceded is a way to drive private plans out of business and create “single payer”) to “non-profit cooperative” of “affordable” plans. BTW, as to that last, I see that as only marginally less likely than a government option as being unfair competition to regular private insurance. Even that program is likely to suffer further alterations as the reality of what is being peddled more and more sinks in for the public and members of Congress hear from their constituents, by far most of whom (according to surveys) are happy with their plans.

Krauthammer concludes that the final bill likely will contain further restrictions on insurance companies to promote portability (a good idea, if one is going to have regulations) and a ban on pre-existing conditions exclusions (probably a good idea, depending on the details). I would be in favor of a more thorough revamping of the system in favor of private choice, but, from the point of government regulation, these seem the least bad.

But, what about the cost? Who pays? As so often, it will be a wealth transfer from the politically less-involved, more naive, and poorer (the young) to the politically-active, numerous, and comparatively wealthier (the aging baby-boomers). After all, as the CBO and others have conclusively demonstrated, the rising cost of health care is a function of an aging population:

“But wouldn’t this bankrupt the insurance companies? Of course it would. There will be only one way to make this work: Impose an individual mandate. Force the 18 million Americans between 18 and 34 who (often quite rationally) forgo health insurance to buy it. This will create a huge new pool of customers who rarely get sick but will be paying premiums every month. And those premiums will subsidize nirvana health insurance for older folks.

Net result? Another huge transfer of wealth from the young to the old, the now-routine specialty of the baby boomers; an end to the dream of imposing European-style health care on the U.S.; and a president who before Christmas will wave his pen, proclaim victory and watch as the newest conventional wisdom reaffirms his divinity.”

This sounds like other government programs (Social Security) where the relatively shrinking number of productive younger workers subsidize the no longer productive older retirees. It has the same dynamic as the welfare state, though, as a private enterprise (heavily regulated) it will be operated more efficiently.

The second article is light-hearted, but practical advice from Andrew Malcolm at the L.A. Times blog, on how to deal with the Obamacare salesman coming to your house.