Monday, March 22, 2010

Implications of the Health Care Reform

You know what's funny? For some people, I've become someone that they ask for my opinion about health care. Between last night and this morning several people asked me what I thought about the health care reform passage. I was checked out over the weekend as far as keeping up on everything that was happening in current events so I didn't have any firm ideas or thoughts about what all transpired. (That is, except for Kansas losing to UNI. Seriously? I had them in the Final Four in all seven of my brackets, and I think I had them winning in like five of them. I was so sure of them having a great tournament. The funny part was thinking about my old roommate and how that loss probably ruined his weekend, and the rest of the tournament. Although, knowing him, he's probably now rooting for Not-Kentucky. He really hates those guys. Consequently, I do too, and I share his disappointment about his team, but I digress.)

Fortunately for you guys, class got canceled this afternoon so I went on a crash course of reading various opinions about the legislation. This is what I've learned:
  • So the current reform is mostly absurd. My friend, Dr. Nick, I think put the whole debate in really simple terms: Health care comes down to a triangle of three things - quality of care, quantity (coverage of the population), and cost. Changing any one of those variables has a dramatic effect on the other two. Democrats have been pushing the notion that you can improve coverage of health care without drastically driving up costs while also maintaining the same quality of care. Obama keeps touting the Congressional Budget Office's projections of few increases in costs of additional coverage, but the biggest flaw in those projections is that expenses for Medicare (or is it Medicaid?) will remain stable over the next decade, but that has not been the case in all of its years in existence. Plus, they purposefully pushed back some of the biggest expenses of the coverage several years so as to limit the budget projections. Sneaky...
  • This sort of health care reform will most likely cause the economy to continue to languish and stay mostly stagnant over the next several years. Overhauling the health care system in this sense will force the government to cut expenditures in other areas, and where this mostly takes place is in national defense costs. For Democrats, this is not a big deal because they don't perceive that there is a real threat by other nations. In other countries where they've resorted to similar universal health care packages, this has been the case, and it will most likely be the same here. There will be other far-reaching effects that we can't even really fathom just because nobody really understands the breadth of such far-ranging legislation.
  • As far as costs for health care, a lot of the tab will be picked up by the highest income earners. The biggest problem with that is that they are the ones who create the most jobs. Deincentivizing industry is a great cause behind economic stagnation. Eventually those costs will be passed on to the middle class, but the effects of that may not be felt for several years.
  • Costs to consumers. The reform does not allow for pre-existing conditions to be a restriction for providing coverage, meaning everyone else has to absorb those costs, which is kind of crazy. What if car insurance were done this way? That means that overall rates would rise for everyone and good drivers would have to insure bad ones. That means your clean driving history will be expensed because someone else is reckless in their driving, speeding, getting into accidents, DUIs, etc. The idea is well-intended, but will have far-reaching consequences for everyone else that has bothered to take care of themselves. The comparison is not perfectly applicable, but is a good approximation.
  • Costs for enrollment are pretty high and depend upon your income level. Not enrolling results in a penalty that will be assessed by the federal government. However, those penalties are not enough to deter people from not enrolling, so costs will escalate as people will pay the penalty, but enroll as soon as they do have any kind of real expenses. The problem here is that it will cause a glut of people to not contribute money to the health care system, and further exacerbate the problem of funding the reform. I didn't explain that in very clear terms, but I don't want to elaborate further.
  • Opinion polls favors those opposed to the reform. Obama is less popular in his second year as President than even Jimmy Carter and GWB. Opposition to the bill has remained steady at more than 55%.
  • The legislation cleared the House by a total of four or five votes. What is encouraging is that not a single Republican was in favor of the legislation, and about 34 Demcratic representatives also voted against it. No bill of this magnitude has ever passed with so little bipartisan support. This is significant because the tide that swept Democrats into office in 2006 and 2008 will most likely sweep them right back out of office in the 2010 and 2012 elections. Obama may have sacrificed his opportunity to win reelection, although running against the incumbent is always a daunting task.
  • If there is any hope to repeal the damage done by the reform, it will require majorities in both the House and Senate, and probably a Republican president, meaning that nothing will really change until 2012 at the earliest. Change meaning repeal. This is a little scary, but not insurmountable. Additionally, it may also require super majorities in both Houses, and even then, legislation is usually worked well enough that there is built in insulation to protect against that sort of thing.
  • Paul Ryan (R) of Wisconsin has begun to emerge as a leader within the Republican party. The guy is an articulate, red-blooded conservative, and will be an all-star within the party. All of the developments with this health care legislation has put him at the forefront of the party because of how doggedly he fought against it, but in a manner that was both completely intelligent and passionate. We will be hearing more from this guy in the future.
  • What I think is really interesting and has received little attention, is how this kind of legislation not only changes how business is done, but also changes the minds and attitudes of people residing within the system. I have to develop my thoughts further on this, but this could potentially be one of the worst consequences of this kind of thing.
Here is some reading if you're interested: 20 ways Obamacare will take away freedoms; a bleak perspective from Victor Davis Hanson here; 5 reasons not to despair by Rich Lowry; Obamacare is not inevitable; Paul Ryan is not ready to give up.

But you know what? Things will work out. Maybe I have an annoyingly cheery temperament these days, but doomsday still has yet to arrive. There are a lot of factors favoring anyone opposed to the reform, and things will balance out somehow. We emerged from the Great Depression in spite of FDR's reforms, we'll somehow emerge from this. But do stay current. It does matter that we stay up to date on what's going on, and having an idea of what things we are in favor of, and opposed to.


Caitlin said...

Medicare is (generally) for all those old folks, and Medicaid is for the poor folks.

And crappy, expensive care is for the rest of us folks. Boo Obamanation!

Laura said...

thanks for this. i was just online trying to get a cliff notes version of the bill and this helped out.

Moomby said...

great review! thank you for providing this!

ps, your word verification is "snerfarm." awesome

Dave said...

There are also some interesting Constitutional law challenges that present themselves with such wide-spread legislation.

Make no mistake about it; what the Dems have done today is unprecedented. It will be interesting to follow the legal challenges to such a blatant over-reaching of federal government.