Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Why the White House is Panicking About ObamaCare
Townhall.com ^ | July 13, 2013 | John C. Goodman

Posted on 07/13/2013 12:27:33 PM PDT by Kaslin

Actors. Actresses. NFL football players. Baseball players. Librarians. Mayors. City councilmen. Members of AARP.

The Obama administration is looking far and wide, leaving no stone unturned in a relentless search for…well…for help.

Help with what? Help with getting people to enroll in health insurance plans this fall.

And why is that? Because the administration is facing the very real possibility that its signature piece of legislation may fall flat on its face.

Last week's announcement that the employer mandate will be delayed for a year and that income verification for people getting subsidies will also be delayed are the latest signs of trouble. The next shoe to drop may be the failure for people to obtain (ObamaCare) insurance — even if it's free or highly subsidized.

Consider this:

· About one in every four individuals who are eligible for Medicaid in this country has not bothered to enroll.

· About one in five employees who are offered employer-provided health insurance turns it down; among workers under 30 years of age, the refusal rate is almost one in three.

Think about that for a moment. Millions of people are turning down (Medicaid) health insurance, even though it's free! Millions of others are turning down their employers' offers. Since employees pay about 27% of the cost of their health insurance, on the average, millions of workers are passing up the opportunity to buy health insurance for 27 cents on the dollar.

You almost never read statistics like these in the mainstream media. Why? Because they completely undermine health policy orthodoxy: the belief that health insurance (even Medicaid) is economically very valuable, that it improves health and saves lives, and that the main reason why people don't have it is that they can't afford it.

Welcome to the huge disconnect in health reform. On the one hand there are the people who are supposed to benefit from health reform. On the other hand there are the people who talk about it and write about it. I think it's fair to say these two groups almost never meet.

Study after study has purported to have found that health insurance improves health, saves lives, makes people happier, etc., etc. But these studies almost always ignore two cardinal facts:

· We have made it increasingly easy in this country for the uninsured to obtain health care after they get sick.

· We have also made it increasingly easy for people to get health insurance after they get sick.

Both developments reduce the incentive to spend time and money enrolling in a health plan.

I have described before the experience of emergency room care in Dallas:

At Parkland Memorial Hospital both uninsured and Medicaid patients enter the same emergency room door and see the same doctors. The hospital rooms are the same, the beds are the same and the care is the same. As a result, patients have no reason to fill out the lengthy forms and answer the intrusive questions that Medicaid enrollment so often requires. At Children's Medical Center, next door to Parkland, a similar exercise takes place. Medicaid, CHIP and uninsured children all enter the same emergency room door; they all see the same doctors and receive the same care.

Interestingly, at both institutions, paid staffers make a heroic effort to enroll people in public programs ? working patient by patient, family by family right there in the emergency room. Yet they apparently fail more than half the time! After patients are admitted, staffers go from room to room, continuing with this bureaucratic exercise. But even among those in hospital beds, the failure-to-enroll rate is significant.

Clearly, Medicaid enrollment is important to hospital administrators. It determines how they get paid. Enrollment may also be important to different sets of taxpayers. It means federal taxpayers pay more and Dallas County taxpayers pay less. But aside from the administrative, accounting and financial issues, is there any social reason we should care?

Economics teaches that people reveal these preferences through their actions. If people act as though they are indifferent between being uninsured and being on Medicaid, we may infer ? based on this behavior ? they are equally well off in both states of the world from their own point of view.

Against this conclusion, advocates of "behavioral economics" might argue that people don't know what's best for them. They have to be "nudged." Seeing a football star on TV encouraging young men to enroll in a health plan might do the trick. But for the Obama administration that doesn't solve the problem. People need more than an initial nudge. They have to be nudged every month.

Take Massachusetts. That state cut its uninsurance rate in half. But the main vehicle was Section 125 plans set up by employers. These accounts allow employees to pay their share of the premiums with pre-tax dollars and they are mandatory. Further, for lower-income employees the insurance is highly subsidized by the state. More to the point, under this arrangement, the employee's contribution is automatically deducted every pay period.

Under ObamaCare, similarly situated individuals are going to be expected to pay a monthly premium the way they pay their utility bills. But with this difference. When people don't pay their electricity bills, the utility cuts off their electricity. When they don't play their rent, the landlord throws them out in the street. But when they don't pay their health insurance premium, what happens then? Not much.

Why is it so important to the administration to have people enroll? If they don't enroll in Medicaid, I don't think it matters very much. But if they don't enroll in private plans sold in health insurance exchanges, it will matter a great deal. Remember, these will be artificial markets in which insurance will be underpriced to the sick and overpriced to the healthy. A lengthy, complicated enrollment process will further discourage those with no health problems.

But if the only people who enroll are those who are sick, the average premium will go through the roof. A death spiral will ensue as ever increasing premiums price more and more buyers out of the market, leaving only those whose expected medical expenses exceed those high premiums.

The bright side of all this is a possible teaching moment. The whole nation may be treated to one vast demonstration of why prices matter.


TOPICS: Culture/Society; Editorial; Government; US: Massachusetts
KEYWORDS: 0bamascare; abortion; deathpanels; healthinsurance; house; obamacare; whitehouse; zerocare
Navigation: use the links below to view more comments.
first previous 1-2021-28 last
To: Tilted Irish Kilt

The kenyan is a typical African potentate of a century ago, a perfumed prince.The only thing lacking is a stable of wives and concubines and sex slaves,. He makes do with Love.


21 posted on 07/13/2013 3:02:43 PM PDT by arthurus (Read Hazlitt's EcThomics In One Lesson ONLINE http://steshaw.org/econohttp://www.fee.org/library/det)
[ Post Reply | Private Reply | To 9 | View Replies]

To: af_vet_rr

The Republicans in Congress offer only desultory opposition because they are the Democrat Party’e Designated Opposition wing and the DNC and Soros want a picture of a weak opposition to actually strengthen their imposition of Obamacare. It precludes a real opposition.


22 posted on 07/13/2013 3:07:40 PM PDT by arthurus (Read Hazlitt's EcThomics In One Lesson ONLINE http://steshaw.org/econohttp://www.fee.org/library/det)
[ Post Reply | Private Reply | To 16 | View Replies]

To: Kaslin

“But if the only people who enroll are those who are sick, the average premium will go through the roof. A death spiral will ensue as ever increasing premiums price more and more buyers out of the market, leaving only those whose expected medical expenses exceed those high premiums.”

Exactly what I told my brother. Economics - it’s the law!


23 posted on 07/13/2013 3:12:15 PM PDT by JCBreckenridge ("we are pilgrims in an unholy land")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
At Parkland Memorial Hospital both uninsured and Medicaid patients enter the same emergency room door and see the same doctors. The hospital rooms are the same, the beds are the same and the care is the same. As a result, patients have no reason to fill out the lengthy forms and answer the intrusive questions that Medicaid enrollment so often requires.

So maybe failure wasn't deliberately built in. Maybe Ted Kennedy's mandatory emergency room care will backfire, killing Zippy's dream of socialized medicine.

Wouldn't that be sweet.

24 posted on 07/13/2013 3:12:36 PM PDT by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thestob
IRS Scandal, NSA Scandal, Health Care DISASTER, ...don’t focus on any of that!!! lets piss off our base and pass immigration reform.

Dear Lord, when you put it that way...

Freaking idiots beyond all reason and understanding

Yes!

25 posted on 07/13/2013 3:16:28 PM PDT by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
[ Post Reply | Private Reply | To 17 | View Replies]

To: SatinDoll; All

No, actually we own our bodies, and if we are smart we learn how to take care of them. Then we only need a small amount of medical care and Insurance doesn’t have to cost a small fortune, or we all have to pay with excessive emergency room use.


26 posted on 07/13/2013 3:26:45 PM PDT by gleeaikin
[ Post Reply | Private Reply | To 3 | View Replies]

To: Kaslin
IMHO, I really don't think they care even a little bit. They are here to destroy the country.

They don't care how, or by what method.

The fact that kenyancare passed, (we have to pass the bill to find out what's in it) settled everything.

Now, I see gelding pubbies rushing to promote an "alternative" health care bill.

As a country, we are in fact doomed. And those gelding pubbies need to be Tea Bagged, loud and in public.

tea bagging is two way street mofos.

27 posted on 07/13/2013 4:07:22 PM PDT by ConradofMontferrat (According to mudslymz, my handle is a HATE CRIME. And I HOPE they don't like it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: gleeaikin

I had catastrophic health insurance before it was made basically illegal by Obamacare.

I repeat - the purpose of Obamacare is for the government to own our bodies. That is why no one - NO ONE - with any common sense wants it.

If you want to know why medical care is so expensive then I suggest you start reading the market-ticker.org. Karl Denninger has proven mathematically that it is the medical insurance companies that have caused the huge increases in costs.


28 posted on 07/13/2013 4:58:09 PM PDT by SatinDoll (NATURAL BORN CITIZEN: BORN IN THE USA OFCITIZEN PARENTS)
[ Post Reply | Private Reply | To 26 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-28 last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson