On Obama’s Healthcare Reform

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

Analyzing the effects of a single-payer system

A single payer healthcare system is one in which all of the healthcare payments in an area come through a single entity. Many supporters of the single-payer option take for granted that a single-payer plan will cut healthcare costs more than any alternative. Especially ignorant writers claim that the single-payer system is the “only way to control healthcare costs”.  Some more intelligent ones have actually laid out why such a system would be effective.

First, some terminology. A monopsony is a market situation in which one buyer purchases something from multiple sellers. A monopoly is a market situation in which one seller sells something to multiple buyers. In both situations, the market advantage usually lies with the united, single entity. In an ordinary market situation, creating a monopsony would benefit those united under it, the consumers, at the expense of those running the hospital. Most inquiry usually stops here.  However, the situation is more complicated than that. Due to strict occupational licensure, the American Medical Association has obtained a monopoly in the healthcare labor industry.  This monopoly benefits the doctors at the cost of those running the hospital . The hospital has been passing this cost onto the consumer through high medical costs. A single-payer system, therefore, would not be able to truly negotiate costs lower because it isn’t getting at the problem.

The Physicians for a National Health Program claim further benefits of a single-payer plan. They claim that the government would decide a sum to pay the hospital for its entire funding. This would lead to rationing and inflexibility in the hospital.  The individual would have to pay out of pocket for preventive care.  People would be required to pay out of pocket for treatment and medication under any unexpected overload of the budget, such as an epidemic.

Even further, because the source of the problem is not being treated, healthcare costs will not decrease, but increase. The budget given to these hospitals will become less and less relative to the costs of healthcare without cutting the budget periodically; however, the budget will be further cut. The “rationing” will be dealt by the hospitals to a higher degree every year.

This bill is a wreck, and the more we look at it, the worse it appears.

Obama can no longer claim to be non-partisan

Obama’s efforts at reform were never really non-partisan. While unification behind Obama as a man was once bipartisan, the revelation of his policies ended this trend.

First, he revealed his plans at economic stimulus. From the very beginning, there was a great opposition to this package. Economists debated the potential effectiveness of the bill, and many believed it would do more harm than good. Nontheless, Obama pushed it through, and the only criticism of the bill was that it wasn’t read.

Then came talk of another stimulus, which still appeared in the public eye as non-partisan despite its support and opposition being down party lines.

More recently, on the new healthcare reform proposal: According to CNN, Democrats are considering a loophole that would only require a 50% vote for this bill to pass, because they can’t even get all of their own party to support it. The Dems are officially unwilling to negotiate their bills and are trying to abuse their temporary majority by ramming tyranny down our throats.

The good news, though, is that the Democrats might not take this option, and may drop their public option initiative in order to pass their healthcare reform. Says Obama, “[the] public option… is not the entirety of healthcare reform”. So, even should this healthcare overhaul pass, we may be able to undo it given time.

Nontheless, anyone that even mentions that Obama or his policies are bipartisan are either not watching the news or entirely incompetant.