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Obama: ObamaCare Didn’t Work, So Let’s Completely Socialize Medicine


President Obama recently published an overview of the results of ObamaCare in the Journal of the American Medical Association.

It’s a pretty extraordinary article, because in important ways it acknowledges that ObamaCare has basically failed—and it lays the cards on the table for what we always knew was going to be his next step.

Remember that the whole point of ObamaCare was to make health care affordable. Its official name, after all, proclaims it is the Affordable Care Act. But Obama acknowledges that health insurance premiums have turned out to be much higher than the law’s advocates promised us. Or at least this is the closest you are likely to get to an admission from a politician:

[B]oth insurers and policy makers are still learning about the dynamics of an insurance market that includes all people regardless of any preexisting conditions, and further adjustments and recalibrations will likely be needed, as can be seen in some insurers’ proposed Marketplace premiums for 2017…. [W]hile the ACA has greatly improved the affordability of health insurance coverage, surveys indicate that many of the remaining uninsured individuals want coverage but still report being unable to afford it. Some of these individuals may be unaware of the financial assistance available under current law, whereas others would benefit from congressional action to increase financial assistance to purchase coverage, which would also help middle-class families who have coverage but still struggle with premiums.

Let me translate that for you. Forcing insurers to cover people who are already sick and to charge them the same rates as healthy people has jacked up insurance premiums for everyone else. So because the law didn’t make insurance affordable, Congress has to make it affordable by heavily subsidizing it with even more of the taxpayers’ money.

Obama also somewhat vaguely acknowledges the problem of rising deductibles. One way of staunching the rise in premiums has been to offer plans with very high deductibles—the amount a person has to pay upfront before his insurance kicks in to cover the rest. This keeps the premiums affordable at the cost of making the actual care less affordable by whacking you with huge payments if you actually get sick. Last year, the New York Times acknowledged that under ObamaCare, “sky-high deductibles…are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage…. ‘We have insurance, but can’t afford to use it.'”

I happen to think high-deductible plans are a good idea—when they result in much lower premiums, and when they are coupled with a system like health savings accounts, which encourage people to build up tax-free savings to cover their deductible payments. But that’s not what ObamaCare does, and sticking people with a $12,000 deductible certainly isn’t what it promised voters.

How we got these rising premiums and rising deductibles is no mystery. President Obama refers to “learning about the dynamics of an insurance market that includes all people regardless of any preexisting conditions.” Well, maybe he had to learn about it. The rest of us had a pretty good handle on what it was going to mean. It means that rates go down for those who are already in poor health but go up for the young and healthy—which, in turn, means we get more of the first group looking for insurance in the ObamaCare exchanges, and fewer of the second group. Yet a viable health insurance market depends on those young and healthy people to pay premiums into the system without drawing much out in benefits, in order to make up for the old and sick who draw out much, much more in benefits.

The upshot is that the people in the ObamaCare exchanges have turned out to be an expensive and unprofitable bunch, and insurers are losing money on them. Some insurers have reacted by simply dropping out of the exchanges, and those who remain have had to jack up their premiums.

All of this is exactly what we predicted, by the way. And so is Obama’s next step.

From the very beginning, I have argued that ObamaCare was ultimately designed to fail. Its basic contradiction is that it was founded on a fundamental hostility toward the entire idea of health insurance, which Obama and the Democrats view as inherently parasitical. Yet the Affordable Care Act is a scheme to require mandatory, universal purchase of the very product they despise.

How do you square that circle? Simple. ObamaCare mandated and subsidized the purchase of health insurance, but on terms that obviously made it unfeasible over the long term. Obama did so on the presumption that Democrats would be able to come back later and blame the fiasco on those greedy private insurers, then go for what they really wanted all along: a “public option” modeled on Medicare, as a further stepping stone toward “single payer,” i.e., socialized medicine.

Here’s how I called it in December of 2009, during the final debate over ObamaCare.

When you understand what this bill does, you can see why the Democrats would be happy to compromise and drop the public option—for now. This bill so comprehensively wrecks private health insurance that pretty soon a ‘public option’ will seem like the only alternative, and they will already have put into place one of the new taxes needed to pay for it. If the left’s goal is to impose socialized medicine in America, this bill does it in the most callous and destructive way possible. It smashes private health care—then leaves us stranded in the rubble, at which point we will be expected to come crawling back to the same people who caused the disaster and ask them to save us.

Now we see president Obama officially calling for “a public plan to compete alongside private insurers in areas of the country where competition is limited.”

But as two New York Times analysts note:

I confess I have a hard time envisioning a government plan available in only certain places. Traditional Medicare is always an option everywhere. A lack of competition is a signal that the economics don’t work for a private insurer in a given geographic area, and I’m not sure how a public option in those markets changes things…. One big advantage that a Medicare-like plan might have is the ability to pay less to doctors and hospitals than many commercial plans. But if the public option is really able to underprice the private options by a lot, why would they stay in the market?

So the purpose of the “public option” is not to supplement private insurance, but to finish it off. And what then?

When it was first floated, the insurers objected because they simply don’t have the pricing power of Medicare, which essentially dictates prices rather than negotiates with hospitals and doctors. They thought it was a path to single-payer because it would eventually drive all of them from the market. Maybe Bernie Sanders would approve.

By the way, I quote the New York Times so much here because they have been and continue to be cheerleaders for ObamaCare, so they’re a pretty good indicator of how the law’s own supporters think it’s going to play out.

Like I said, this was predictable and predicted from the very beginning, but now it’s all out in the open. ObamaCare was always just an exercise in planned obsolescence, cobbling together a system nobody really thought was going to work, just so they could exploit its failures to push for the socialized medicine they really wanted all along. It’s telling that in this article, Obama boasts that the Affordable Care Act has increased the number of people who are insured, but his own data shows that the biggest driver of that is an expansion of Medicaid, which is not insurance but welfare—the system he wants for everyone.

As I noted back in 2009, a decade-long exercise in deliberately wrecking private health insurance is the most callous and destructive way to pursue that goal.

If that surprises you, look at Venezuela. When has the Left ever shied away from smashing everything to pieces in pursuit of government power? So we shouldn’t expect anything different here.

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