Obamacare Still Bad for the Rest of Us
8:12 AM, Dec 8, 2011 • By JEFFREY H. ANDERSON
Spike Dolomite Ward’s op-ed in the Los Angeles Times has been getting a fair amount of attention. Ward, a private citizen and an on-again, off-again supporter of President Obama and his party, is now thankful for Obama because Obamacare helped her get health coverage for cancer when she didn’t have insurance. Her basic argument seems to be as follows: At $2.5 trillion over its real first decade (according to the Congressional Budget Office), and at an indeterminable cost to Americans’ liberty, Obamacare is nevertheless worth keeping because — as her own experience suggests — it would occasionally help someone.
Specifically, Ward praises Obamacare’s community (“high-risk”) pools for those with prohibitively expensive preexisting conditions, like herself. These are the same pools that 375,000 people were supposed to have signed up for by January 1, 2011, based on the Medicare chief actuary’s projections. Instead, by that date, only 8,000 people had signed up — or 1 for every 47 that were expected. As of October 1, enrollment had still reached only 10 percent of the projected enrollment for nine months earlier. Why haven’t more people signed up? Because, as I’ve written previously.
“Like the rest of Obamacare, these pools are poorly designed: They’re overregulated, they mandate overly expensive benefits, and (as a result) they charge excessively high premiums. Also, they are underfunded and designed to be short-term, so they — again, like Obamacare as a whole — create great uncertainty and offer little incentive for people to drop out of their current arrangements to join up.
“Admittedly, some people…have been helped by these pools. But a lot more could be helped by better designed, less expensive, less heavily regulated, more locally controlled pools.”
Such well-designed, state-run pools should be one part of the Republicans’ 3-part replacement for Obamacare. The others should be ending the tax code’s discrimination against the uninsured — in other words, fixing a problem of fairness that the federal government created — and lowering health costs (along the lines of the 2009 House Republican health bill, which the CBO has estimated would lower premiums for the average family health plan purchased on the open market by about $3,000 a year — or about $30,000 a decade — versus what they’d be under Obamacare).
Again, as I have written previously,
“Such community pools — ‘high-risk’ is a misnomer, as John R. Graham and John Goodman have noted; these pools are for people who are high cost, not high risk — would be designed and run at the state or local level. They would provide public funding to help cover the cost of insuring people with prohibitively expensive preexisting conditions. To keep people from gaming the system and signing up for insurance only after they’re sick, such plans should ideally cost their recipients more, not less, than most people pay in health care premiums — though far less than such plans would cost on the open market (if they were even available). They should also offer a meaningful, sensible range of benefits; being publicly subsidized, they shouldn’t be Cadillac plans. Such community pools would provide an important safety net for those who otherwise couldn’t get coverage. But they would not throw a net over the entire health care system and everyone who’s affected by it, as Obamacare would.”
Jim Capretta and Tom Miller have estimated that funding for the community pools would cost taxpayers about $150-$200 billion over ten years. That’s about 7 percent of what the CBO says Obamacare would cost over that span.