Columnist.
The health insurance market is changing. And the changes are not good. Even before there was Obamacare, most insurers most of the time had perverse incentives to attract the healthy and avoid the sick. But now that the Affordable Care Act has completely changed the nature of market, the perverse incentives are worse than ever. Writing in the New York Times Elizabeth Rosenthal gives these examples: - When Karen Pineman of Manhattan sought treatment for a broken ankle, her insurer told her that the nearest in-network doctor was in Stamford, Connecticut – *in another state.* - Alison Chavez, a California breast cancer patient, was almost on the operating table when her surgery had to be cancelled because several of her doctors were leaving the insurer's network.
"The shadow of crisis has passed," President Obama told us on Tuesday night. "The State of the Union is strong," he added. But is it really? If you had accumulated a debt that is more than 20 times the size of your household income, would you say your household finances were in good shape? Well, that's where we are as a country. Under about a dozen federal entitlement spending programs, we have made promises that we haven't been willing to pay for. In the process, we are leaving an enormous financial burden for our children and grandchildren.
Paul Krugman has become an embarrassment to the economics profession. Despite his Nobel Prize and despite his previous high regard in the profession, his twice-a-week editorials in The New York Times are causing even progressive economists to treat him as somewhat of a kook. Since 2011, the United States has followed what Krugman correctly calls a policy of "austerity." For example, the federal budget deficit has declined from 8.4 percent of GDP in 2011 to a predicted 2.9 percent of GDP for all of 2014. All along the way Paul Krugman protested that such policies would prolong the recession and even push us into a "low-grade depression."
The primary purpose of the Affordable Care Act was to make health insurance affordable for people with modest incomes. Yet as the employer mandate begins to kick in for 2015, the law is already hurting some of the people it was intended to help. By this time next year, we may find that many workers who earn within a few dollars of the minimum wage have less income and less insurance coverage (as a group) than they did before the mandate began to take effect. This is the conclusion I draw from my survey in December of 136 fast-food restaurants (franchisees) that employed close to 3,500 workers. Before 2014 about half the employees were "full time" as defined by ObamaCare; that is, they worked 30 hours or more a week. The potential cost to the employers of providing mandated health insurance to their full-time staff would have been about $7 million a year. But by the time the employers took advantage of all their legal options they were able to reduce their cost to less than 1% of that amount.
Why are you and I enjoying the bounty of the richest country in the history of the world instead of grubbing around in the forest for roots and berries the way our ancestors did? It turns out people appear to have two very different answers to that question. And it's not just ordinary people who disagree. Even the experts – economists and historians – disagree. That's the view of Johnathan Haidt, a social psychologist at New York University's Stern School of Business. (HT: Tyler Cowan)
In making decisions about medical care everyone should factor in cost—patients, doctors health insurance companies and government. Consider two alternative procedures, A and B. If for each $1,000 spent on procedure A, patients gain one extra month of life whereas using procedure B costs $2,000 for the same gain, A should be preferred to B. By making the efficient choice we free up money to meet other health and non-health needs. There remains this problem, however: what if the person who makes the decision about cost is different from the person who realizes the gain. That is what gives rise to charges of "rationing" and "death panels."
If there is one thing most conservatives and liberals agree on it's that we should not consider cost in deciding whether people should undergo medical procedures that have the potential to save lives and cure diseases. Unfortunately, most conservatives and liberals are wrong. Declaring the idea of *cost effectiveness* a "forbidden topic in the health care debate," Aaron Carroll shows just how adverse we are to the idea of comparing money cost with health outcomes.
The argument for Obamacare really boils down to one idea: people without health insurance won't get medical care. Or if they do get it, the care will be too little and too late. Insure everybody, we were told, and everyone will have access to high quality, timely care. But is that really happening? It may not be. Unless they were previously uninsured, people who are getting health insurance in the (Obamacare) exchanges are likely facing greater financial barriers to care than they were before the health reform was enacted.
Howard Dean, who is thought to represent the Democratic wing of the Democratic Party, told reporters the other day that he supports our policy of using drones to kill people (and all those who happen to be near them) without warning. He also has no objection to the National Security Agency listening to his phone calls and monitoring his email. Donny Deutsch, the reliable voice of the left on "Morning Joe," told TV viewers that he supports the CIA's torture activities -- recently revealed in a Senate committee report. These views are very different from what one typically finds in the unsigned editorials of The New York Times -- causing one to wonder what exactly is happening to left-of-center thinking.
The Obama administration is actually pleading with people to shop around before choosing a health insurance plan. Ordinarily that would be good advice. Ideally, people should comparison shop -- considering the differences in premiums, subsidies, and networks of the different plans. But as I wrote at Forbes this week, there's one big problem: Intelligent comparison shopping is virtually impossible. The Obama administration calls the health insurance exchanges "markets." But they are unlike any market you have ever encountered. Think about what you would have to consider to make a reasoned choice. For starters, you have to consider all the health problems you might have. For example, you might get cancer, heart disease, diabetes… Then you would have to compare the networks of all the different plans for cancer care, heart care ….
As I wrote at Forbes yesterday, New York Senator Charles Schumer has placed the blame for the Democrat's disastrous defeat in this fall's election squarely at the feet of the Affordable Care Act (Obamacare). Speaking at the National Press Club the other day, the third-ranking Democrat in the US Senate said that whatever the merits or demerits of health reform, it was bad politics.
Republicans in Congress have created their own internal gridlock on ObamaCare. Even if the Democrats all abstained and let Republican legislators do whatever they wanted, the Republicans still could not agree on what to do next. From the base there is the incessant cry for "repeal." But as just about every Republican candidate in this last election acknowledged, there can be no "repeal" without "replace." Otherwise, from 10 to 15 million people will lose their health insurance. However, "repeal and replace" means transitioning from ObamaCare to a new system. And no matter how radically different the new system is, it will run the risk of being called "ObamaCare lite."
The Obama presidency is a failed presidency. He has presided over one of the slowest economic recoveries in history. His foreign policy has been a disaster. ObamaCare is a mess. And it's hard to lay the blame off on anyone else. The president didn't make Republicans part of any of his decisions and most of the time he ignored congressional Democrats as well. To make matters worse, Barack Obama is the most polarizing president we have had in the past 60 years. What makes that so strange is that we were all promised something completely different.
Actually the Democrats have been race baiting for decades. And it's not going away. Using fear and race-polarizing agitation to drive minority voters to the polls is going to be the increasingly overt face of the Democratic Party. They can't win any other way. What's new is that the mainstream media has suddenly discovered all of this. Through the years, these same news outlets have wasted no time at all in spotting anything that even hints of Republican race baiting. Take the presidential campaign of 1988.
Conventional wisdom says that Democrats wanted to campaign this year on jobs and the economy. They were supposedly thrown off message by ISIS and the Ebola scare. But if voters re-focus on jobs and the economy, do the Democrats have a credible plan to offer them? I tried to find out. To begin with, the Democrats have a terrible record to defend.
Is there any place you can go to find an objective, understandable explanation of how ObamaCare works? That's not easy. Mostly what you find is completely one-sided. Either there will be an exposition about all the benefits. Or there will be a litany of problems and harms. Is there any such thing as an objective look at health reform? Yes. It's my new book, *Living with ObamaCare: A Consumer's Guide*. It's based on the book *Priceless: Curing the Healthcare Crisis* (Independent Institute), but it's much shorter and easier to read.
Why does the left care about income inequality? University of Chicago economist, John Cochrane asked that question the other day and could only settle on one answer: they like big government. But first things first. What do you think would be more helpful to people at the bottom of the income ladder: redistribution of income from the rich or getting a good education and acquiring the habits of self-discipline and self-control?
Only 6 percent of doctors are happy with their jobs, according to one survey. They commit suicide at twice the rate of the general population. Over half are unsure they would recommend the practice of medicine to young people. So what's going on?
Yes according to Paul Krugman, Ezra Klein and the Commonwealth Fund. But all these folks were cheerleaders for the Affordable Care Act from day one. Sarah Kliff, another ObamaCare supporter, estimates that health reform has enabled about 5 million people to become newly insured. But that's only about 10 percent of the uninsured. What happened to the mandate that required that everyone have health insurance this year or face a fine? Turns out that the mandate doesn't actually apply to millions of people. In fact, the Congressional Budget Office estimates that 90 percent of the uninsured are exempt from the mandate.
Labor Day was originally concocted by labor unions and the idea was to celebrate the union movement. But unions -- at least in the private sector -- are being replaced by a different form of labor monopoly: occupational licensing. Should we set aside one day a year to celebrate licensing? Or should we celebrate instead the right to work? Membership in labor unions has been nose diving over the last half century. According to the Bureau of Labor Statistics, only 11 percent of the workforce belongs to a union today. That's down from about 30 percent during the 1950s. Private sector union membership has dropped to only 6.7 percent.
