Wednesday, May 31, 2017

May, 2017, Part 3, The Unfolding Disaster That Is Obama Care: The Unbent Cost Curve, A Democrat Oopsie, and Common Sense Economic Ideas To Fix Obama Care

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements its rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

  • Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
  • Our food chain is infested with overdoses of high fructose corn syrup, salt, sugar, and other unhealthy additives.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The country is in serious need of health care tort reform.Barriers to insurance company competition across state lines need to come down.
  • Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
  • Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
  • Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.
You cannot resolve any problem unless you understand and address the underlying root causes. No difference here: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused insurance premiums, deductibles and copays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

1) Obama Care and Obama promised to “bend the cost curve,” i.e. it would finally slowdown the rise in the nation's healthcare costs. In fact, Obama promised many, many times that not only with the growth rate in health care costs be slowed but that American families could see up to a $2,500 a year reduction in their health insurance costs. Wow, what a great piece of legislation this is!

Or is it? Seven years after it has been passed, has the cost curve been bent? If you look at the real world data over the years, this appears to be another broken promise or outright deception of Obama Care. A recent article in the July, 2017 issue of Reason magazine, an article by John V.C. Nye that had nothing to do with health care, gives some insight to this additional failure of Obama Care. 

The name of the article, “Your Neighbor’s Fancy Care Should Make You Feel Better About Income Inequality,” contained a historical line graph that was developed by Mark J. Perry of the American Enterprise Institute. Mr. Perry took government Bureau of Labor Statistics data from 1996 and tracked how much the cost of 13 family purchases had risen in price over the past twenty years. His findings included the following results:

  • Overall inflation had risen 57.1% over the past twenty years according to official government data.
  • Of the 13 expenses tracked, seven expenses saw price rises less than the overall increase of 57.1% and two expenses, food and housing, were right around there 57.1%. 
  • However, four expenses tracked much higher than the total inflation rate including health care costs which rose at around twice the rate of inflation.
Now one could make the case that healthcare costs were rising much faster prior to Obama Care taking effect and that Obama Care helped keep the rise in health care costs to only about twice the rate of overall inflation. You could say that and you would likely be wrong.

If you look at the rise in health care costs over the past twenty years, it is basically a straight line rise at about a 45 degree angle on the chart in the article, there has been no "bending of the cure” since Obama Care took effect. It is just an almost perfectly straight line increase that started in 1996 and continued through 2016, there is no trace of a “bending of the cost curve.” In other words, based on government data and the chart in the article, health care costs continued their long term, constant year over year increase despite the promises of Obama Care. Nothing got bent.

2) Recently, there was a racist based attack in Portland where a racist individual ended up stabbing three people who were trying to defend some women from the racist. Two of the three defenders unfortunately died and the third was seriously injured. 

A Go Fund Me page was started to help the survivor with what is likely to be extensive health care costs as he tries to recover from his heroics. Which got the attention of a Democrat in Congress, Keith Ellison who issued the following tweet:

“Our healthcare system is so cruel that one of the heroes of the Portland stabbing has to crowdfund his life saving medical care.”

The tweet was quickly removed from the good Congressman's account when he realized that this was certainly an indictment of Obama Care. Remember, Obama Care was supposed to:

  • To reduce annual healthcare insurance costs up to $2,500 a year for families, making healthcare insurance cheap and available to anyone.
  • Made sure that every American had health insurance coverage, either free via Medicaid or subsidized via an Obama Care policy.
  • Bend the cost curve to make medical care and insurance less and less expensive.
  • Allow every American to get health care insurance coverage.
Thus, seven years after Obama Care was passed, why does one of its supporters think that today “our healthcare system is so cruel?” Wasn’t Obama Care supposed to fix all that cruelty? You can see why that tweet disappeared almost as quickly as it was posted, this Democrat was actually pointing out the failure of Obama Care.

3) Kevin Williamson, writing for the National Review website on May 5, 2017, talked about the overall concept of economic scarcity and how it applied to healthcare costs in this country. It is an in-depth article with some very interesting economic viewpoints and common sense that I will not go into here.

However, he did have some excellent recommendations on how to fix the problem of ever rising healthcare costs in this country, recommendations that Obama Care scarcely noticed nor incorporated into the legislation:

  • Prescription drug costs could be lowered by making the government approval process less expensive and time consuming.
  • Drug costs could also be further reduced by “tweaking a few intellectual-property procedures.”
  • Unlike Obama Care which made medical devices more expensive and reduced the amount of research money available to develop new devices, making the government approval process for devices less expensive and less cumbersome could also reduce costs.
  • Increase the supply of doctors available in this country with the right immigration procedures and incentive plans to encourage doctors from around the world to come to this country to practice medicine, a simple economic concept that if you increase the supply of any economic entity, the price goes down (of course, the AMA lobbyists would fight this tooth and nail in order to protect the current domestic doctor cartel).
  • Reduce the government regulation and burdens on insurance companies to make them eager to enter the health insurance market, unlike Obama Care which chased insurance companies out of the market.
  • Change the paradigm on simpler, ordinary medical needs by changing it to "how people pay for food, cars, housing, and World of Warcraft expansion packs.
  • This previous change would allow “insurance to be insurance: a financial product that helps to mitigate certain risks related to unexpected health-care costs. This would allow for the emergence of robust, competitive, consumer-oriented markets like we have in cellphones and pornography and other innovative markets where choices abound and prices keep going down because the consumer is king.” 
Rational, sound ideas based on reality, unlike the entire Obama Care legislation which was based on who knows what.

That will do it for today: rational answers from an economic theory perspective, a big “oopsie” by a Congressional Democrat where he proves that Obama Care is a disaster and real world and real data proof that Obama Care never “bent the cost curve.” More disasters to follow.

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