Thursday, November 21, 2013

The Unintended Consequences of Obamacare

There's quite an interesting discussion going on in the comments of yesterday's post about the Obamacare Death Spiral.  The back and forth is on the nature of the unintended consequences of the law, and is worth a read.  I was going to comment there but it seems worth a post of its own.

My take is that the elections of 2006 (when the Democrats captured Congress) and 2008 (when they won the White House and a Supermajority in the Senate) gave the Democrats an excess of confidence.  The Congressional debates in the lead up to the law's enactment strongly suggested that the Democrats had bought into a set of beliefs:
  • They thought that they could ram through a massive entitlement program along party lines and take all the credit for the great new free stuff, locking up voter gratitude for a generation.

  • They thought that they could say anything to get the law passed, because once passed they could take credit for all the great new free stuff, locking up voter gratitude for a generation.
  • They thought that if there were any dead ender bitter clingers who didn't like the law, that once it was implemented it would be too late to go back and the dead enders would give up and go along in resignation.
Now, things aren't looking too good for them.  And so to what I think the real unanticipated consequences of Obamacare are:
  • Voters are furious that the "great new free stuff" is screwing their current health insurance over, that they have to pay higher premiums and deductables, and that they may not be able to keep their doctor.
  • Voters are furious that they were lied to - repeatedly - by all the Democrats at all levels of the party up to Obama.
  • Voters with insurance via their employer have yet to find out that now that the bill has been passed, they'll get a chance to see what it does to them.  They will be furious, and will outnumber the currently furious individual plan voters by a factor of 10.  Their anger will peak immediately before next year's elections.
  • Seniors have not yet realized that Medicare was robbed of half a Trillion dollars to fund healthcare for people other than Medicare enrollees.   They will be furious, and are well known to have perhaps the highest election day turnout of any demographic.
And it was passed along straight party lines.

The Democrats did not intend any of this, and were so buoyed by the elections of 2006 and 2008 that they through caution to the wind.  Nobody in the party seems to have asked the question: do we really think that we can take a Trillion dollars from the middle class and from seniors and still keep their votes?

I don't think there's any way to look at this as anything other than a Greek Tragedy.  Elektra comes to mind, with the bloodletting in the final act still to be seen at the voting booths next year.  The landslide has begun - everyone can see the first slipping from the top of the mountain.  It's still small but everyone knows what this will turn into, and how quickly this will happen.

And everyone knows what is going to happen to the Democrats standing at the bottom of the mountain.  They can run, but everyone knows that there's no way they can run fast enough.

They should have seen this.  They didn't anticipate it.  Now it will play out in an 11 month agony for them.


Anonymous said...

And people who just want to have some sort of basic cheap coverage are still royally screwed.

Dirk said...

I've already found out what Obamacare does to my employer-provided health plan. A 17% increase in premiums, doubled deductible, 50% higher out-of-pocket maximum. And most likely, this plan will go away after 2014, leaving the high-deductible plan as my only "choice".

Problem is, 3 of us in the family happen to have conditions that require monthly medication. And prescription costs are absolutely insane! We talked to our pharmacy, and found out the actual no-insurance cost of the prescriptions we're using. It would cost us almost $1.5k a month to pay for them - and that's just the necessities. Add a few others that, while prescribed, are not *absolutely* necessary, but which enhance quality of life, and we'd add another $200 a month to that bill. With the $1.5k per month, we'd hit the family deductible in about 2.5 months. At which time we'd only have to shell out $300 a month (20% co-pays on prescriptions) for the rest of the year, for another $2700. For those doing the math at home, that's $7200. For prescriptions alone. Never mind doctor visits and additional prescriptions if any of us happens to get sick or injured. We'd hit the $9k out-of-pocket max pretty quick if that happened.

We calculated it all out, and determined that the HD plan will end up costing us 25% more than the current plan - assuming today's rates and deductibles. Which, I'm sure is not a safe assumption! So, Obamacare is going to end up costing me around 50% more than I'm paying today, and for a plan that's not as good as what I have now.

Rev. Paul said...

"They should have seen this. They didn't anticipate it. Now it will play out in an 11 month agony for them."

And it couldn't happen to a (ahem)nicer group of people. Unfortunately, we're all being dragged along for the ride.

Windy Wilson said...

My brother reported to me that his wife, the Stalinist, checked on the California covered website and they'll save a bunch of money on the premiums compared to what they had (on a high 5 figure income). No word on what the new deductible is or if they keep the doctors they currently have.

Borepatch said...

Rev Paul, Dirk pointed out the breakage this is causing.

Windy, I'd hold off cashing those checks until the systems are actually working ...

R.K. Brumbelow said...

@Dirk I will trade you. I have started having to purchase medication overseas. 1 of my meds is 1300 a month stateside (generic) but I buy overseas for $45 a month. Another is 900 a month, switching next month to a generic replacement that is $45 a month. Still a 3rd is $300 a month, buy it overseas for $30 a month. I could go on I take 11 meds all similar orders of magnitude.

I see insurance as the reason drug prices remain so high. Few people pay 100% OOP so there is 0 reason for a drug co to not charge $50 for a pill that costs 15c to make.

Archer said...

@R.K. Brumbelow: I'd expand on your thought. The opacity of the insurance industry is why medical costs in general remain so high. Nobody knows what anything costs, so the bean counters in hospitals and clinics can charge whatever they want. Heck, they even negotiate different rates for each insurance company - for the same procedure (see links below). The cash/uninsured rate is a completely separate set of numbers, and more accurately reflects the "real" cost; they don't have to pay a billing specialist to deal with the insurance company, or wait 3-6 months for reimbursement. Naturally, the cash rate is WAY lower.

I see this mandatory health insurance law causing medical care rates to skyrocket even more. It's not that the procedures are more expensive; in fact I believe the cash rates won't change much. It's that the extra effort - more accountants and billing folks to deal with the insurance companies, more paperwork and forms, longer wait times for payments from insurance companies, etc. - must be worth the clinics' time and energy.

Goober said...

My group plan increased by 20% this year and deductible is up, too.

I'm scared of what happens in 2014 when this plan will liked dissolve into the ether.

My medication costs $45,000 a year. That is not a misprint.

My quality of life was so low without it that I considered suicide on more than one occasion.

I can't live like that again. Because of this technocratic tinkering with all of our lives, be it for ego or arrogance or hubris or a true desire to help, I feel fear right now for my own future. I can't even imagine them having meant to do this to me, but the ignorance they display of the absolute failure of top down control of these sorts of things is no excuse. Any study of history would have shown this to be destined for failure.

Chickenmom said...

The genie is out of the bottle. It cannot be undone to a point where it was. Repeal from a new administration won't change anything. Insurance companies are making a bundle on this and they are not going to give a penny of it back without a fight. We, the people, are screwed either way.

Erin Palette said...

So... you're saying that 2014 will be an Elektra year? :P

(OK, that probably sounds better in my head than in the heads of everyone who read it.)

Mark Philip Alger said...

At the risk of being a bore on this, there is/are no such thing(s) as unanticipated consequences. Oh, somebody who takes a dump in public might later say of the event, [voice class="dawes_butler"]Oh, dear. I didn't mean for that to happen.[/voice] But, really... Well.

Back in my mis-spent youth, I was a radio dispatcher at the biggest cab company in Cincinnati. Of course, all the drivers wanted the best calls -- most money for the least work. Who wouldn't? We didn't have locator services, so finding the closest available was a matter of announcing that a call was available and waiting for someone to volunteer. They'd try to game the system and guess what what where, but inevitably, every so often, they'd get the turd on toast. And they'd whine about it. At the time, there was a popular car commercial on TV. In reply to the whining, I'd say, "You asked for it; you got it; Toyota." And the turd sandwich calls got to be known as Toyotas. No reflection on the car, of course.

People whining about unanticipated consequences strike me the same way. "YOU. Asked for it; you got it. Toyota."

Here's a concept: the Democrats are out to break the system. Their actions prove that. If they want us to stop accusing them of that motive, let them PROVE us wrong. No, bald assertions won't do. Actions only. Or, as I used to say back in my taxi days: "Money talks; bullshit walks."


ASM826 said...

There is only one explanation that fits the data. They designed it to fail. All of it. Website, costs, complexity of regulations, etc. The whole purpose of Obamacare was to destroy the current healthcare system. Once it is a pile of unusable rubble, they are ready to blame the right and trot out a fully government run single-payer system. That was the goal all along and all this fail is a design feature, not a bug.