The premise of the column is that the legislation was supposed to Fix Something. That might not be the real intent. "[I]f we view the exchanges as a necessarily messy way to destroy the insurance companies and pave the way for universal Medicaid, all is proceeding as the true believers would have it." That's the way Power Line's John Hinderaker sees it.
Democrats don’t expect to be punished for inflicting an expensive, failed program on the American people. Instead, they believe they will be rewarded. As Obamacare continues its slow-motion collapse, they will shift to Plan B. “We tried the market-based approach,” they will say, “and it didn’t work. Now there is only one alternative left: single payer health coverage.” At that point, with the government already dominating health care through Medicare, Medicaid and Obamacare, and with genuinely free and private health care a dwindling remnant of the industry, they think the road to socialized medicine, the holy grail of modern leftism, will be open.The people don't matter. Mrs Clinton has proposed adding a public option to the existing legislation, and her cheerleaders in the academic-media-entertainment complex are pushing for Democrat majorities in the House and the Senate to "get things done." That public option is the camel, further into the tent. You saw it here first. And Robert B. Reich, who was a Bernie Bro until that ended, is on board with doing just that.
They may well be right. In any event, the Democrats’ confidence in that scenario explains why they don’t care that Obamacare has utterly failed to live up to the promises they made for it, and is widely unpopular with the American people.
It’s not just people with pre-existing conditions who have caused insurers to run for the happy hills of healthy customers. It’s also people with genetic predispositions toward certain illnesses that are expensive to treat, like heart disease and cancer. And people who don’t exercise enough, or have unhealthy habits, or live in unhealthy places.Mr Reich elides the proximate cause of the insurance death spiral, which is that the new law compels insurance companies to issue, irrespective of condition, which skews the incentives in the direction of only buying coverage after one gets sick; and that skewage is exacerbated by tax penalties lower than the cost of coverage even when one is healthy.
So health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).
As a result we end up with the most bizarre health-insurance system imaginable: One ever more carefully designed to avoid sick people.
If this weren’t enough to convince rational people to do what most other advanced nations have done and create a single-payer system, consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths. UnitedHealth is already humongous. Aetna, meanwhile, is trying to buy Humana.
Insurers say they’re doing this in order to reap economies of scale, but there’s little evidence that large size generates cost savings.
In reality, they’re becoming very big to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.
The consolidation of the insurance companies? That was the logic of the regulated railroads; at least when Penn Central finally came apart, there were relatively few companies to consolidate into Consolidated Rail. So too with a nationalization of insurance.
But that dig about bargaining leverage? Oligopsony bad, monopsony good?
Color me skeptical, Mr Reich.