Fixing Obamacare

Last week, the stock market incurred its largest weekly drop since 2011.  Last week, the Bureau of Labor Statistic released its latest figures showing that the labor force participation rate (the ratio between those having jobs and the total available workforce) is the lowest in nearly forty years.  A recent revelation confirmed that President Barack Obama knew at the time of the attack in Benghazi that it was a terrorist attack and yet orchestrated the canard that it was a spontaneous uprising by locals incensed over some BS video produced about Mohammed.  A recent FOX poll demonstrated the nearly sixty percent of Americans opposed Obamacare.  Target, Inc. announced that it will cancel healthcare coverage for part time employees joining a growing chorus of large businesses that have done likewise – Trader Joe’s, Home Depot, Walmart, etc.  And Tuesday’s headlines in the Wall Street Journal announced “Obama to Face an Unsettled Nation.” 

Really.  Do you think?

Mr. Obama has demonstrated serial ineptness in virtually every facet of his presidency from the economy (a Trillion dollars wasted on his vision of an “economic stimulus”), to foreign affairs (the embrace of the so-called Arab Spring which has devolved into a series of civil and tribal wars and which demonstrate brutality and inhumanity reminiscent of the Middle Ages), to conduct of military affairs (he sent an additional thirty thousand troops into harms way in the Afghanistan “surge” in a war he had no intention of winning and for a strategy he doubted would succeed).  But in spite of this repeated rendering of incompetence many people were tolerantly forgiving.  For the most part such forgiveness was because 1) the effects of the incompetence did not directly impact them, or 2) they believed solutions in an increasingly complex world were difficult to attain – for most it was more the former than the latter.

But now, we have learned that Mr. Obama is a serial liar also.  The seminal event demonstrating is the passage and implementation of Affordable Care Act (Obamacare).  Despite what Mr. Obama told us we now know that:

• You CANNOT keep your doctor even if you like your doctor.
• You CANNOT keep your healthcare insurance even if you like your plan.
• The average cost of healthcare insurance WILL NOT drop by $2500 per year rather it WILL increase by $3000 to $500 per year and that is just the first year.
• You WILL BE forced to pay for abortions even if your religious convictions dictate opposition.
• There WILL NOT be a “robust competitive market” for healthcare insurance because the federal government will dictate what all policies must contain.
• You WILL BE REQUIRED to accept inflated costs for coverage that you neither want nor need including pregnancy and gynecological care for single men and prostate care for single women.
• Small businesses WILL ELECT to eliminate healthcare insurance for employees because of the high costs mandated by Obamacare.  They also WILL reduce their number of employees to avoid the mandated coverage required by Obamacare.
• Large businesses WILL ELECT to terminate healthcare coverage for part time employees to avoid the high costs mandated by Obamacare.  They will also increase the number of part time employees rather than full time to avoid the high costs mandated by Obamacare.

These were not simply exaggerations or rhetorical flourishes.  These were assertions by Mr. Obama when data and studies internal to his administration showed just the opposite.  And while he persisted in these lies, he withheld the critical information that would prove their falsehood.

So facile was Mr. Obama’s delivery of these lies, so compelling was his delivery and so willing to believe was his adoring media, that he fooled a nation not once but twice to be elected and re-elected to the presidency. But the newly revealed truth of his lies have now called into question the truthfulness of virtually everything he has said and done in his presidency.  With each turn of the screw additional revelations have confirmed that Mr. Obama’s lack of candor extends to virtually everything.

More importantly it appears that the people who have trusted Mr. Obama the most – the young, the poor and the elderly – have suffered the most because of his acts.  For instance, while Mr. Obama touted his nearly One Trillion dollar “economic stimulus” package as a means to create nearly 5 Million jobs, the overwhelming majority of the funds were used to give public employee union members increases in salaries and benefits and to otherwise reward various advocacy groups who had supported his candidacy.

And while Mr. Obama touted one of the principle benefits of Obamacare was to provide healthcare coverage to young people just entering the job market, he did not tell them that they would be forced to pay excessive amounts for coverage that they neither needed nor wanted so that they could subsidize coverage for older and sicker people.

And while Mr. Obama has touted Obamacare as the means to reduce the number of uninsured, polling data from McKinsey & Co indicates that of the 2+ Million people who have enrolled in Obamacare ninety percent of them already had healthcare insurance and were either forced off their existing plans by Obamacare or enticed into enrolling in Obamacare because of forthcoming subsidies.  Obamacare has had negligible effects on reducing the number of uninsured people (with the exception of a dramatic increase in the welfare plan known as Medicaid).

And now Mr. Obama has turned his focus on to “income inequality” despite the fact that since the commencement of his presidency the average household income has dropped by over $3000 per year while Mr. Obama’s friends and fellow Ivy Leaguers on Wall Street have enjoyed record profits and heightened wealth without providing a single product or service except to speculate with other people’s money secure in the knowledge that if they fail the federal government will bail them out once again.  And while unemployment numbers have come down they represent largely the number of people who have abandoned looking for employment rather than those who have regained employment.  As noted above, the country’s labor force participation rate has dropped to it lowest levels since the early 70’s.

Not since President Richard M. Nixon implemented wage and price controls has a government program had such devastating impact on our economy.

So it is no surprise that Mr. Obama will face an “unsettled nation” – he created it.

But, be that as it may.  Despite the lies used to enact and implement Obamacare, despite the polling indicating about sixty percent of the country opposes Obamacare, despite the mounting costs and the reluctant participation, and despite the Republicans universal condemnation of and advocacy for repeal of Obamacare, it will continue.  History has taught us that the federal government seldom, if ever, backs away from a massive social program whether successful or not.  (We have fought the War on Poverty for fifty years and trillions of dollars with no identifiable impact other than creating thousand of public employee union jobs within the state and federal agencies consigned to “fight” the war.)  History has also taught us that in virtually every instance the programs have increased in size and costs.  The increased dependency created by Obamacare coupled with the chaos that will ensue in the insurance and healthcare industries if it is repealed ensures that Obamacare, in some form or another, will be with us forever.

The Republicans would serve the nation better by coalescing around a plan to modify Obamacare so that it fulfills its original goals without causing the personal and economic dislocation that is currently occurring.  While I do not support the concept of universal healthcare insurance, I can describe a free market approach that would eliminate the defects of Obamacare.

Here it is by the numbers:

1. Every legal resident of the United States is required to obtain and maintain health insurance.  Those who fail or refuse to obtain health insurance will be denied health services unless they are able to pay cash for such services at the time they are incurred.  Illegal aliens will be treated in the same manner as all others – they will have access to healthcare only to the extent that they have insurance or are able to pay cash for such services.  (See Item 7. below.)
2. The burden is on the individual and not employers.  Those employers currently providing health insurance will be required to arrange conversion of their policies to individual policies.  Those employers will also be required to increase the salaries and wages of their employees by the amount of savings attained by elimination of their cost of providing such coverage.  (We are not looking for windfalls here.)  The principle reason for imposing the obligation on individuals rather than employers is that “futurists” tell us that this generation and future generations of people will not have a single lifetime employer but rather a series of employers over their working lives.  Not all employers provide health insurance and as employees move from job to job, they will often find themselves scrambling to find health insurance – sometimes during periods in which they may be surcharged because of a health issue.  If employers chose to contribute to an employee’s healthcare, they can make such payments directly to the employees health insurance provider rather than having the employee be at risk of losing the employer’s plan upon termination of employment.
3. Each person who obtains health insurance will determine the extent of the coverage they wish.  This permits buyers a continuum of choices ranging from complete coverage to catastrophic coverage only.  Thus those who wish to have coverage for such things as birth control, cosmetic surgery, erectile dysfunction, and mental health problems are free to choose such alternatives without the government telling them that they are included or excluded.
4. The cost of such individual healthcare will be funded by a full tax credit against any income taxes owed to the jurisdiction mandating the universal healthcare.  (After all, if healthcare is a fundamental right, it, like voting and education, is one that we should not have to pay for directly, but only through a general assessment of taxes.)  Thus, if the State of Oregon mandates such coverage, the tax credit will be against state income taxes owed.  Or if the federal government mandates coverage, then the tax credit will be against federal income taxes owed.
5. The amount of the tax credit cannot exceed the average cost of health insurance claimed as a tax credit by all taxpayers.  For those choosing to forego health insurance in favor of the “pay as you go” option, they can claim a tax credit for their actual cost of healthcare not to exceed the average cost of health insurance.  This permits those who opt for more comprehensive coverage to absorb the additional costs and those who opt for more limited coverage to offset a portion of their incurred healthcare expenses in addition to their insurance.
6. Now here is the twist.  In those instances where the claimed tax credit exceeds the income taxes paid, the taxpayer is entitled to a refund for the difference.  The “refund” can only be used to purchase insurance or pay for actually incurred medical costs.  By doing this, we eliminate the idea that low income people will be unable to afford individual health insurance since, having applied the tax credit and refund, there is no out of pocket cost to them for the insurance.
7. The federal law mandating that hospitals must provide emergency room service to everyone regardless of the ability to pay must be repealed.  (An exception should be created for emergency services when timeliness of care pre-empts the ability to determine whether there is insurance or not.)  While this requirement was originally enacted to ensure that low-income people had some access for catastrophic healthcare, immigration advocates have abused it.  They, knowing that no one can be turned away, now counsel illegal immigrants to utilize the hospital emergency rooms as the primary healthcare provider.  The extraordinary cost that over 15 million illegal immigrants impose on the healthcare system has the ancillary impact of raising the cost to everyone else.  Elimination of free medical care for illegal immigrants will enhance state and federal laws now being enacted barring employers from hiring illegals.  If the jobs and the benefits go away, the reason for illegal immigration will also largely go away.  There is no longer a need for free access to catastrophic healthcare by low-income people because they will now all have health insurance.  (See Item 6. above)  And thus the need for free care at hospitals will be eliminated.

So how much will this cost taxpayers?   Far less than any of the plans being proposed by those who advocate a government managed program for three simple reasons.  First, it is a self- administering program.  The only government involvement is to annually determine the average cost of health insurance as claimed for tax credit purposes and to provide reimbursement to low income people of the amount by which their tax credit (Item 6 above.) exceeds their taxes actually paid.  Thus the whole cost of the massive bureaucracy attendant to government administered programs is eliminated.  Second, there is individual selection of competing healthcare plans – you know, competition – that will ensure that the lowest possible price for comparable products is available.  And third, there is choice as to the level of coverage.  Those who want less can save and those who want more will pay the excess over the average cost.  Gold plated programs such as those enjoyed by public employees will not be financed by taxpayers since the burden will fall individually on the public employees.

Is this plan perfect?  Far from it.  There will obviously be flaws, adjustments and corrections needed but the underlying philosophy is sound, market driven and sustainable in an era in which politics, not economics, appear ready to drive a demand for universal healthcare coverage.