The NYT’s David Brooks—who has been called President Obama’s favorite “conservative” (my quotes)—lays Obamacare out cold in today’s column. Brooks generally stays pretty moderate on most issues—and his take on Obamacare is expressed without flame throwing prose. But it shows how, even now, before the law is fully on its feet, a debacle threatens.
Brooks lays out how badly the cost projections for Obamacare were off. From “Buckle Up For Round 2:”
False projections. The new system is based on a series of expert projections on how people will behave. In the first test case, these projections were absurdly off base. According to the Medicare actuary, 375,000 people should have already signed up for the new high-risk pools for the uninsured, but only 8,000 have. More seriously, cost projections are way off. For example, New Hampshire’s plan has only about 80 members, but the state has already burned through nearly double the $650,000 that the federal government allotted to help run the program. If other projections are off by this much, the results will be disastrous.
The numbers were always stacked in Obamacare. The CBO numbers that supporters always point to, were based on the presumptions built into the legislation. Clearly, they were—and are—unreliable. But there’s more:
Employee dumping. This is the most serious threat. Companies and unions across America are running the numbers and discovering they would be better off if, after 2014, they induced poorer and sicker employees to move to public insurance exchanges, where subsidies are much higher. The number of people in those exchanges could thus skyrocket, especially as startup companies undermine their competitors with uninsured employees and lower costs. The Congressional Budget Office projects that 19 million people will move to the exchanges at a cost of $450 billion between 2014 and 2019. But according to the economists Douglas Holtz-Eakin and James C. Capretta, costs could soar to $1.4 trillion if those who would be better off in the exchanges actually moved to them. The price of the health care law could double.
Youza! Then there is the stifling of competition—just when we need more:
Health care oligarchy. Since the law passed, there has been a frenzy of mergers and acquisitions, as hospitals, clinics and doctor groups have joined together into bigger and bigger entities. The drafters encourage this, believing large outfits would be more efficient. The downside to this economic concentration is there could be less competition and cost control. In many places, the political power of these quasi-monopolies would be huge, with unforeseeable results. The law bans doctors from starting up hospitals to increase competition.
More “too big to fail?” Did we learn nothing from the last three years? I read the other day that construction on 45 new doctor-owned hospitals has been stopped due to Obamacare. How does that help anyone?
Brooks notes that the law remains unpopular, and moreover, it will be blamed from now on for things that go wrong in health care. He expects the fight to play out over the next five years. That’s what happens when an arrogant hyper-majority forces a bad law down the throats of an unwilling public rather than find a more measured common way forward. Are we having fun yet?
