Friday, March 30, 2012

Obamacare on Life Support?

The fate of the Patient Protection and Affordable Care Act, popularly known as “Obamacare” and less popularly known as “Romneycare,” is now in the hands of the United States Supreme Court.

According to most observers, no real surprises emerged from the hearings. Most conservative justices exhibited skepticism about the government's arguments; and in light of the poor presentation by Solicitor General Donald Verrilli, most liberal judges eased in to make his arguments for him. The complete audio recordings of the hearings can be heard here, here, and here.

And according to most observers, Obamacare appears to be on life support until June, when the court will pull the plug and declare it unconstitutional. But I would not bet on that.

The centerpiece of the case remains the individual mandate that requires everyone to purchase health insurance. The government claims that the interstate commerce clause of the Constitution permits the mandate. The government argues that the refusal of individuals to purchase insurance impacts commerce. thus permitting government regulation. Attorneys for two dozen states claim that the interstate commerce clause does not grant power to create commerce in order to regulate it.

Some critics also call the plan “socialized medicine.” I suppose for those too poor to comply with the individual mandate, it is just that. Their costs will be subsidized by everyone else. But the plan could also be seen as a boon for insurance companies. If the supreme Court upholds the PPACA, the insurance industry will received a substantial increase in business.

Interesting enough, it is the insurance companies that most strongly support the individual mandate. Why? It is because this is the only way they can afford to comply with other requirements of the government. The PPACA is a classic example of how the government works to solve problems at least partly created by the government.

Like Nancy Pelosi  I have not read the entire PPACA.

From what I have read, it contains many provisions that actually drive up the cost of insurance and medical care.
 Some of the provisions include the following:

Guaranteed issue, regardless of preexisting conditions. This drives up the costs for insurers. In addition, this provision may even encourage people to simply pay the tax fine tax until they need care. Then they can sign up for expensive medical procedures. Once they complete their treatment, they can  drop back out of the system until the next time they need it.

Community ratings that require similar premiums for everyone in spite of differences in anticipated medical costs.

Mandated benefits that many customers do not need or want.

Subsidies for low income or no income people.

And then there is the great unknown: will private companies drop coverage and force everyone into the government subsidized portion of the program, escalating costs exponentially.

We do not have to speculate on how the PPACA will work if upheld. This system has had a trial run in Massachusetts. The results are in and it is not pretty.

No comments: