Tuesday, June 27, 2017

The Obamacare Debate We Need

Right now the choices being presented to us are Obamacare or a Republican substitute. But this debate leaves out an important fact - Obamacare is failing and has to be changed. Here are some facts that Obamacare's supporters don't like to admit:

Enrollment is way below projections. Obamacare's supporters love to tell us how many more people are insured than before Obamacare passed. They never mention that projected enrollement in the exchanges is way behind projections. Worse, the shortage is in the healthy young people who are supposed to be subsidizing health care for everyone else.

The exchanges are losing money. Insurance companies keep raising rates or pulling out of states entirely because their projections show that they will never break even, to say nothing of making a profit. That's because of the missing healthy people.

It was never fully implemented. The individual portion of Obamacare was implemented but President Obama put the employer mandate on hold for years. Chances are that it will never be implemented.

It represents a tremendous expansion of executive power. Many laws have clauses in them that give the President and the relevant government departments wide latitude in how the law is enforced. Obamacare is fairly limited. Obama seems to have used the maxim about it being better to ask for forgiveness than permission. With no legal authority, he created the national exchanges, delayed implementation of parts of it and diverted money into a profit sharing fund in order to offset insurance company losses. The national exchange survived a court challenge but it's unclear of Obama's other executive actions would.

The "uncertainty" in the markets came from profit sharing fund. Every time an insurance company pulls out of a state, they cite "uncertainty". They are referring to the uncertain future of the profit sharing fund. This was originally set up to create level results for the participating insurance companies. Ones that made too much would pay into the fund which would then be paid to companies that lost money. The problem is that there were never any profits to share. Obama simply diverted money from elsewhere and used this fund to subsidize the insurance company losses. Had Hillary Clinton won the election, this practice would have continued until the courts ruled on it's legality. But the Trump administration announced that it will not defend this practice. So the insurance companies will lose the subsidy that made the exchanges tolerable. There is a decent chance that the courts would have ruled against this practice anyway.

So, when you hear supporters of Obamacare saying that President Trump is ruining Obamacare, that's what they are talking about. He ended an executive overreach.

None of this is secret. The Democrats and news organizations have known about it all along. They know perfectly well that Obamacare would have needed a major overhaul even if Hillary Clinton was in the White House. But none of them want to say this in public because the next questions would be about how to fix Obamacare.

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