The ObamaCare fight is turning hot and heavy.
House Republicans have made an implausible threat to shut down the
government to defund ObamaCare, but a plausible motive is to create
fear, uncertainty and doubt (which already exists in abundance regarding
ObamaCare) during the crucial sign-up period that begins next month.
On the flip side, the administration's last-minute decision not to require income documentation in the first year can only do wonders for enrollment. A handy Kaiser Family Foundation calculator shows how: A single person who estimates his 2014 income as $33,000 would get a measly $6. Change the estimate to $30,000 and, hey, get $507.
This is war—turning sectors of the economy into partisan battlefields is a cost of their agenda that liberals, with their pure faith in "programs," never factor in. But wars also have a way of leading to unexpected outcomes.
Consider the speed with which Trader Joe's, a grocery chain, went from goat to hero in the media last week for canceling insurance coverage for part-time workers. Bad Trader Joe's. But the chain would also give them $500 each to buy health insurance on an ObamaCare exchange, which would actually be a better deal for most employees. Good Trader Joe's.
The fine balance here is between two
subsidies in our oversubsidized health-care system. Figuring out where
these lines cross is the kind of thing that keeps economists busy. If
all employees for whom it made sense to trade in the tax benefit for
employer-provided insurance in favor of ObamaCare's direct tax credits
did so, how many would shift?
According to a new Stanford study, 37 million (at an additional annual cost of $132 billion).
That's a huge number of people quitting our employment-based health insurance system. The only ones staying would be the affluent, who get the biggest tax subsidy because they're in the highest tax bracket. At a stroke, undermined is the political coalition that has long sustained one of the most destructive and regressive subsidies in our health-care system. And that's just one of the accidental features of the bundle of liberal compromises that make up ObamaCare.
ObamaCare also sets in motion long-run forces that could erode the political foundation of Medicare. Don't believe it?
ObamaCare already contains a large implicit subsidy for the old (regardless of income) in the form of protection of pre-existing conditions and its limitation on how much higher rates insurers can charge the old than the young.
Medicare, for its part, is already means-tested and will become more so. Millions of Medicare users already have opted for a private insurance option. How many ObamaCare customers might one day decide they'd also like to keep their private insurance rather than enroll in fee-for-service Medicare—especially as no signal has been clearer from Washington than the signal that Medicare quality will decline as reimbursements to doctors and hospitals are trimmed back?
Now let's just dream for a moment: If Medicare and the tax handout to employers declined in importance, what would be left would be ObamaCare plus Medicaid—essentially a schedule of declining subsidies (irrespective of age) that phase out with income.
Voila, this sounds a lot like the alleged GOP cure for our health-care system.
Our point is that when Washington legislates on a grand scale, it sets in motion a game whose long-run outcome nobody can predict.
ObamaCare, to be sure, was not reform—it was a piling on of subsidies that can only throw fuel on the fire of health-care inflation. Not even the usual mouthpieces pretend otherwise anymore.
But a society can't give a subsidy to everybody for the same reason you can't give a subsidy to yourself—you end up paying for your own subsidy and aren't better off. In fact, you are worse off thanks to the administrative overhead involved in taking money away from you and giving it back to you.
You are also worse off because of the perverse incentives engendered by diverting yours and everyone's health-care spending through a common pot.
These pathologies have undermined U.S. health care for two generations, and nothing has been solved, nothing has been fixed, due to ObamaCare.
It should be noted, finally, who is really rooting for the Affordable Care Act to be a train wreck: It's people on the left, like L.A. Times columnist Michael Hiltzik, who anticipates that "glitches, loopholes and shortcomings" will lead to a single-payer system. It's people like Sen. Harry Reid, whom Mr. Hiltzik quotes telling voters back in Nevada that ObamaCare is "far from having something that's going to work forever."
Our health-care wars still have a long way to run.
On the flip side, the administration's last-minute decision not to require income documentation in the first year can only do wonders for enrollment. A handy Kaiser Family Foundation calculator shows how: A single person who estimates his 2014 income as $33,000 would get a measly $6. Change the estimate to $30,000 and, hey, get $507.
This is war—turning sectors of the economy into partisan battlefields is a cost of their agenda that liberals, with their pure faith in "programs," never factor in. But wars also have a way of leading to unexpected outcomes.
Consider the speed with which Trader Joe's, a grocery chain, went from goat to hero in the media last week for canceling insurance coverage for part-time workers. Bad Trader Joe's. But the chain would also give them $500 each to buy health insurance on an ObamaCare exchange, which would actually be a better deal for most employees. Good Trader Joe's.
jonathan ernst/Reuters
A tea-party rally in
Washington, D.C., Sept. 10.
According to a new Stanford study, 37 million (at an additional annual cost of $132 billion).
That's a huge number of people quitting our employment-based health insurance system. The only ones staying would be the affluent, who get the biggest tax subsidy because they're in the highest tax bracket. At a stroke, undermined is the political coalition that has long sustained one of the most destructive and regressive subsidies in our health-care system. And that's just one of the accidental features of the bundle of liberal compromises that make up ObamaCare.
ObamaCare also sets in motion long-run forces that could erode the political foundation of Medicare. Don't believe it?
ObamaCare already contains a large implicit subsidy for the old (regardless of income) in the form of protection of pre-existing conditions and its limitation on how much higher rates insurers can charge the old than the young.
Medicare, for its part, is already means-tested and will become more so. Millions of Medicare users already have opted for a private insurance option. How many ObamaCare customers might one day decide they'd also like to keep their private insurance rather than enroll in fee-for-service Medicare—especially as no signal has been clearer from Washington than the signal that Medicare quality will decline as reimbursements to doctors and hospitals are trimmed back?
Now let's just dream for a moment: If Medicare and the tax handout to employers declined in importance, what would be left would be ObamaCare plus Medicaid—essentially a schedule of declining subsidies (irrespective of age) that phase out with income.
Voila, this sounds a lot like the alleged GOP cure for our health-care system.
Our point is that when Washington legislates on a grand scale, it sets in motion a game whose long-run outcome nobody can predict.
ObamaCare, to be sure, was not reform—it was a piling on of subsidies that can only throw fuel on the fire of health-care inflation. Not even the usual mouthpieces pretend otherwise anymore.
But a society can't give a subsidy to everybody for the same reason you can't give a subsidy to yourself—you end up paying for your own subsidy and aren't better off. In fact, you are worse off thanks to the administrative overhead involved in taking money away from you and giving it back to you.
You are also worse off because of the perverse incentives engendered by diverting yours and everyone's health-care spending through a common pot.
These pathologies have undermined U.S. health care for two generations, and nothing has been solved, nothing has been fixed, due to ObamaCare.
It should be noted, finally, who is really rooting for the Affordable Care Act to be a train wreck: It's people on the left, like L.A. Times columnist Michael Hiltzik, who anticipates that "glitches, loopholes and shortcomings" will lead to a single-payer system. It's people like Sen. Harry Reid, whom Mr. Hiltzik quotes telling voters back in Nevada that ObamaCare is "far from having something that's going to work forever."
Our health-care wars still have a long way to run.
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