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Sunday, June 2, 2013

Obamacare Distortions

Ezra Klein is a sometimes guest host on MSNBC, a columnist at the Washington Post, and a member in good standing of the "Protect Obama" segment of the liberal media.  He is also quite intelligent.  What that means, then, is that when Klein makes an argument to support the Obama policies, it is usually the best that can be found.  That reality makes Kleins latest column about Obamacare truly damning.

In his column, Klein is doing damage control for the disclosure that in California, the health insurance sold in the Obamacare exchanges will cost up to 146% more than current policies available in that state.  It is a staggering increase for people who are already struggling to make ends meet in the Obama economy.

So, what is Klein's answer to this news?  It comes in multiple parts.

First, Klein tells us that only a small group of people are affected at all.  Indeed, according to Klein, only 7 million people will buy insurance through the exchanges in 2014.  That answer is almost funny.  The question being addressed is what will people buying insurance through Obamacare exchanges in California have to pay in premiums.  That there will be ONLY seven million such policies written in 2014 does not change that question.  Klein's answer is a non-sequitur. 

And seven million people is hardly insignificant.  Just imagine Klein's response if a new federal immigration policy were announced that illegal aliens over the age of 35 were to be subject to immediate deportation without appeal once law enforcement determined their status as illegal.  Such a change would only affect fewer than five million people, but I doube Klein would think it unimportant.

Second, Klein complains that the current base rate in California ignores all those who cannot get insurance at that price.  Twelve percent of applicants cannot get private insurance.  Thirteen percent of applicants pay higher than the base rate because of their medical histories.  Klein acts as if this somehow changes the numbers.  It does not.  For the thirteen percent who currently pay higher rates than the base figure, the average price is still substantially below the latest estimate for the rate from the Obamacare exchanges.  The premium increase would not be 146%, it would only be in the area of 70%.  This is a fact that Klein leaves out.  In other words, fully 88% of those buying this insurance would see major increases in their premiums.  Klein also fails to mention that the other 12% who cannot get the regular insurance can obtain a policy under the high risk plan already in effect.  Most of these folks do not bother to get that insurance, however.  The Obamacare plan will lower the premiums for those folks by 10 to 15%, but one has to wonder if that will actually lead to many more policies being sold.  The truth is that nearly everyone will see an enormous increase in premiums while only a small group of people will see a decline.

Third, Klein points out that the coverage in the Obamacare policy will be "better" than the coverage in the current policies.  That, of course, depends on which current policy one has.  Without a doubt, a great many current policies operate as insurance against catastrophe.  If a person gets a serious disease that requires ongoing expensive treatments, the insurance takes care of it.  For day to day medical needs, however, the cost remains mostly on the individual.  Klein, however, fails to notice that Obamacare does the same thing.  The policy from the Obamacare exchanges will still have deductibles; they vary according to income. Klein, in fact, proudly points out that for someone who has income of 100% of the poverty level, the deductible will be only, ONLY about $2000 per year.  Does Klein really think that is a good thing?  How many poverty stricken people does he know who have $2000 to spend on medical care?

Fourth, Klein says that Obamacare will subsidize the poor including those making up to four times the poverty level so that the insurance will not cost all that much.  This is perhaps the most telling and the most dishonest of all of Klein's positions.  Think about it.  Does a government subsidy change the cost of the Obamacare policy?  The answer is no; it only changes who makes the payment.  Indeed, were the current insurance policies to remain in place, government subsidies could be introduced as well which would reduce the cost to the poor.  The overall cost of the policies, however, would be much, much lower.  Obamacare raises the cost of insurance with countless mandates, regulations and restrictions.  If the government pays for some folks, the cost increase does not change.

Klein is clearly enamored with the idea of government subsidized health care.  That bit of socialized medicine, however, does not change the enormous damage that Obamacare itself does to the cost structure of the health care industry.  Obamacare forces a major component of waste into the system.  We will all pay for that waste and no one will get any benefit from it.  The sad thing is that Klein's arguments make clear that he actually recognizes this reality.  Klein's refusal to deal with the reality exposes his pathological need to support Obama, no matter what.  It would be nice if Klein decided for once that his allegiance ought to be to America rather than to Obama.



 

 

 

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