Posts Tagged ‘Barack Obama’

On Obama’s Healthcare Reform

December 14, 2009

Obama established four purposes for the Healthcare reform bill back in August. This article will analyze each of them, their validity, and their utility.

The first purpose of the healthcare reform bill is to establish a public option. This has since been removed, but it is important to remember why. The public option would necessarily grant anyone that wanted it free healthcare from the government dole. The aim was to focus this on those that would not be able to buy healthcare insurance otherwise, but there was no way to do this without either prohibitively regulating it or creating so-called death panels to examine each case individually. The public option quickly failed both in popularity and practicality.

The second purpose was to cut wasteful government spending on healthcare and substantially cut subsidies on health insurance companies. This as a concept is a great thing, but in practicality, it is mixed in merit. For example, it forces drug companies to give a rebate to people with both medicare and medicaid (causing everyone else’s healthcare cost to go up). But there is some benefit. The medicare reform will cut down on fraud. It will also cut so-called over-billings and some bureaucratic inefficiencies, which improves this portion.

The third purpose is essentially a repeat of the second, a mere piece of rhetoric that exists because otherwise the description of the second purpose would be too long to flow conveniently.

The fourth purpose is the real reform, a regulatory mess sure to cripple the private health insurance industry. One of those chains will keep a company from “discriminating”, or charging a higher price to individuals that are more likely to induce costs. This equalizer will raise the healthcare costs of every American who does not have a pre-existing disposition. People will be penalized for living healthily.

Those were the original goals of healthcare reform, back in August. Since then, a new part has been added in the place of the public option: a mandate requiring all americans to purchase health insurance. Failure to buy health insurance means a quarter of a million dollars in fines and in some cases, jailtime. Economically, such a mandate will cause the demand curve for health insurance to become inelastic, meaning that the price can shoot through the roof without companies fearing market retribution. Health insurance costs would increase, and one’s choice to opt out of insurance would be lost. One could no longer be medically independent, and one would face dependence on either a private collective or a public collective to determine whether one should live or die.

On balance, the current bill is still a wreck. I have not even analyzed the trillion dollar spending, and already the headlights and horn of the freight train of Healthcare reform grow nearer, ready to crush us.

[1] http://energycommerce.house.gov/Press_111/health_care/hr3962_PAYINGFORREFORM.pdf

[2] http://www.democrats.org/a/2009/08/why_we_need_hea.php

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