Behind the talking points on Obamacare

Obamacare's presentation was full of misinformation. Now it's starting to come out. Photo: IRS and healthcare/ AP

WASHINGTON, October 10, 2013  The Affordable Health Care Act (ACA) was sold to America as a “must-have,” because some 15 million Americans don’t have health insurance. Though there are all sorts of things 15 million Americans don’t have (daily vitamins, healthy diets, Cadillacs), Candidate Obama thought this one would resonate best with the talking-point manufacturers.

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The strategy was perfect: talk about need, but not why that need was to be paid for by everyone else. Talk about how hard it is for people with pre-existing conditions to get health insurance, without examining why that makes sense. Talk about benefits, without mentioning costs. And wrap the whole thing up under the IRS, and don’t say it’s really the biggest tax this nation has ever seen.

Now, some of the public is waking up, but only around the details: the website doesn’t work. So, it has already cost some $600 million, according to sources quoted on the news (since the government either doesn’t know or won’t say, officially), and it doesn’t work. People are used to things that don’t work, coming from the government. This time, though, more people are paying attention. Even though there is no way to sign up for Obamacare, assuming anyone really wants it, the fines will still be levied for not participating. And here is where the dark veil descends, and people stop learning just how bad the program really is.

First, if Americans without health care were really a problem, the program would address health care, not health insurance. Obamacare has nothing to do with care. Health care providers, working with (presumably) 15 million new patients, will be forced to accommodate the higher volume, but under stricter pricing rules – healthcare itself will necessarily degrade, even as more and more demand more and more services.

Second, think of the nature of insurance. Insurance, whether run by a private corporation or by government, is a money-making operation. We expect private firms to be forthright and honest about the details of what we buy, and we don’t have to buy – from them or any of their competitors – if we think the price is too high, so they have incentives to keep their prices in line with costs. The government has no such task. Like all government programs, no matter how much it wastes and how much it charges, people have nothing to say about it – the costs of the programs just rise, depending on how much the government can take directly (through “premiums,” which is what they call the tax) or through borrowing through the back door, which is the national debt our great-grandchildren will be paying.

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Third, no one seems to be examining the immediate costs. Nearly every media analyst says Obamacare will cost “$95” to opt out, the first year. Or 1 percent, whichever is higher. That means it’s higher for anyone making over $9500 per year. Next year, it’s 2 percent; then 2.5 percent in 2015. But what they won’t tell anyone is how much an unsubsidized applicant will pay, for any of the four levels (Bronze, Silver, Gold, or Platinum) of coverage. And, being a tax, the idea is to enroll as many healthy unsubsidized people as possible, to pay for the subsidies and claims of everyone else.

Fourth, the deductibles are higher, for the cheaper (more-affordable) plans. Those who can afford only the Bronze, clearly won’t be able to afford the high Bronze deductible. Like deductibles, the co-pays are higher, for the more-affordable levels, too. And likewise, someone who can barely afford Bronze and somehow manages to also pay the high deductible, will then be faced with a 40% co-pay, for fees beyond that! Few people in any tax bracket can afford to pay 40% of healthcare bills.

And fifth, the glory part: it’s administered by the IRS, the most mismanaged, bloodthirstiest government agency conceived since the 1940s (outside of perhaps Pol Pot’s Cambodia, Idi Amin’s Uganda, or Mao’s China). When the “insured” fails to pay the deductible or co-pay, he’s not left to the tender mercies of a collection agency; he can’t negotiate with the hospital. He has to pay the IRS. A collection agency can’t seize his bank accounts, or sell his house – not without extended court actions; and a collection agency is governed by strict laws. The IRS can freeze accounts instantly, seize assets at its whim – and then it’s up to the victim to get them back, but without access to his resources. A civil action can, at worst, result in bankruptcy; the IRS can eventually throw you in prison, and an IRS debt is never discharged in bankruptcy.

So, under Obamacare, it won’t be long until those who most “need” it, will be economic slaves to the government, probably for life.

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Tim Kern

Tim Kern taught economics for fifteen years, and discovered that understanding life is easy; it’s recognizing reality that takes practice. He holds a music degree, and later earned an MBA in finance from Northwestern University. He has lived across the US, and now makes his home in Anderson, Indiana.

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