Rather than “hope and change,” Barack Obama offers a warmed-over Republican policy — Romneycare — that has already failed in Massachusetts. The core of Obama’s fake reform (described most recently in his address to Congress) is not, as many conservatives suggest, the “public option.” It is instead the proposal to force people to buy politically-controlled insurance. (For details on the Massachusetts fiasco, which Obama hopes to replicate on a national scale, see the articles by Paul Hsieh and Michael Cannon.)
It is the mandate that ties together the various tenets of Obamacare, particularly insurance controls (regarding coverage and pre-existing conditions) and expanded subsidies.
Regarding pre-existing conditions, I’ve pointed out, “Forcing insurers to ignore pre-existing conditions means allowing consumers to wait until they get sick to buy insurance… The logical consequence of forcing insurers to ignore pre-existing conditions is to force everyone to purchase insurance…”
Obama made the same point in his speech: “Unless everybody does their part [and purchases insurance under compulsion], many of the insurance reforms we seek — especially requiring insurance companies to cover pre-existing conditions — just can’t be achieved.” Just so.
Nevermind the fact that federal policies largely created the problems of uncovered pre-existing conditions.
Obama admits, “More and more Americans worry that if you move, lose your job, or change your job, you’ll lose your health insurance too.” But why is health insurance (and not any other sort of insurance) tied to employment for most Americans? It is because of federal tax distortions that drive expensive, non-portable, employer-paid insurance.
As I’ve noted (and again), the vast net of continuously changing insurance controls also helps to effectively outlaw stable, long-term policies that would remedy the problem of pre-existing conditions.
For more on this issue, please see Paul Hsieh’s outstanding article, “How the Freedom to Contract Protects Insurability.”
Obama wants to force insurers to ignore pre-existing conditions and also force insurers to cover preventative care (which would, incidentally, outlaw my high-deductible plan and force my wife and me to buy dramatically more costly insurance). The inevitable result of such controls is to jack up insurance premiums (leaving aside Obama’s fantasy that giving people more “free” health care will somehow curb costs).
Mandated insurance requires expanded subsidies. After all, you can’t force somebody to purchase a product that they literally cannot afford. If Obama follows the lead of Republicans, his “tax credits” will in many cases be direct subsidies.
Obama hopes to cheat a little on his mandate, claiming “there will be a hardship waiver for those individuals who still cannot afford coverage.” (Whether you can “afford” this politically-manipulated “coverage” will be determined by the federal government.) Apparently Obama would subsidize these “hardship” cases through some combination of tax-funded welfare and tax-funded insurance.
With or without the “public option,” the core of Obamacare remains the same: force everyone (or nearly everyone) to buy insurance, federally control what insurance people can buy (making it more expensive), and forcibly transfer more wealth to pay for health.