ObamaCare: Robbing Peter to Pay...No One

I should know better than to think, "They can't be serious proposing that!" But the Democrats' fix for healthcare sends even my shock-and-surprise meter into red zone.

The President's self-styled Health Reform Plan, or ObamaCare, reforms [fixes] nothing. It robs Peter to pay...who? No one?

ObamaCare calls for $1.5 trillion (yes, with a "t") dollars in new expenses. These supposedly will be offset by three mechanisms: 1) Income tax surcharge on the top 0.1% of wage earners ("$544b"); 2) Cuts in MediCaid and MediCare spending ("$500b"); and 3) Penalties on individuals and companies who do not purchase insurance ("$200b").

Testifying before the Senate Budget Committee, the Director of the CBO (Congressional Budget Office) said that ObamaCare would accelerate, not slow the health cost spiral and that the Administration's revenue calculations were "unrealistic' [he was being gentle].

ObamaCare is a classic fix-that-fails (from systems thinking). No, wait. That is wrong. It is worse. It is a fix-that-backfires. Think about it from two viewpoints: effect on your health care and effect of the economy.

Effect on your health care
Your doctor does not accept new Medicare patients not because she is a money-grubbing capitalist. She just wants to stay in business. What MediCare pays does not cover her marginal costs. With a large enough number of MediCare patients, the doctor cannot make payroll. And now the Obama Plan will cut MediCare payments even further!

Let's say for discussion' sake that ObamaCare actually does increase the number of people with health insurance coverage. What good is having insurance if the doctor won't see you? She cannot see you because she cannot afford to. Recall the commercial: "More taste! Less Filling!" ObamaCare is More Insurance! Less Care!

Additionally, ObamaCare is likely to worsen the quality of health care. No joke. At the same time as ARRA 2009 says it will expand electronic medical records, it allocates billions to "beef up" the security imposed by HIPAA. This of course reduces the free exchange of medical data, which increases errors and prevents learning.

Effect on the economy
At present, the Government is trying to stimulate our stagnant economy. What will ObamaCare do to the economy? While it makes easy political fodder to attack the extremely wealthy, when you super-tax them bad things happen. Ask Great Britain - they tried it. The super-wealthy either find ways to protect their money by making it non-taxable or they became...less wealthy. Either way, they will neither spend nor invest, just hoard and protect. In the midst of a severe recession, ObamaCare will remove a major driver of economic growth.

For hospitals, the cuts in MediCare and MediCaid will be devastating. Right now, hospitals are losing money on these patients. They have to make it up by 'over'-charging privately insured patients, called revenue shifting. What are they going to do after further cuts? Answer: shift revenue even more or go out of business. Can you think of a third option? I cannot.

The penalty aspect of ObamaCare is supposed to raise $200 billion. [Where do they get these numbers - from the twilight zone?] Employers who now do not offer health insurance benefits cannot because of the cost. Penalizing them will just take more money out of their pockets and simply drive them out of business. Then their employees will have neither insurance nor a job.

Individuals who choose not to buy health insurance do so because they too cannot afford it. Does the government really think that imposing a financial penalty - increasing (!) the out-of-pocket cost for the non-wealthy individual - will suddenly make that person go out and buy what he could not afford in the first place?

Just because a jerk says it doesn't make it false.
Years ago, I learned an important lesson. Just because a jerk, someone I disliked, said something did not make it untrue. We need to evaluate the message more than the messenger. The Republicans are currently the 'bad guys.' They may oppose the President's Plan largely on partisan grounds. Nonetheless, when they say this Plan will not work, that statement (regardless whose mouth it comes out of) is true. Whether it is CBO Director Douglas Elmendorf or Rush Limbaugh saying that ObamaCare will fail, both are right.

ObamaCare:
• Will not increase access to care.
• Will not halt the rise of national healthcare expenditures.
• Will increase errors but not quality.
• Will increase the acute shortages of healthcare personnel.
• Will increase our already unsupportable national deficit.

ObamaCare will not reinject care into healthcare. It will backfire, and as an added bonus, ObamaCare will extend the current recession.

Follow Deane Waldman on Twitter: www.twitter.com/dwaldman@thesys

Comments

[Dark Sphere]

Add this to the list, from CNN, 5 Freedoms you will lose under Obamacare:

http://money.cnn.com/2009/07/24/news/economy/health_care_reform_obama.fortune/index.htm

[Samalabear]

This is the second or third blog that is telling it like it is. All make a strong case for why we need single payer. I can't add much more to what is already said here. I hope more people read your blog. There are no carrots in this bill for anyone, but a ton of sticks. I was shocked by the cuts in Medicare and Medicaid alone. Both programs have been weakened over the years, as it is. It is amazing to see the elderly and the poor targeted like this, instead of bring everybody into the same fold under Medicare for All.

But Medicare for All would push the for-profit industry industry off to the side, as in other countries -- which is why all of this is deliberate.

[SeriousBlack]

You've got it Deane. And that's why if this goes forward (actually, it's more likely that after the Senate gets through with it, it will be even more of a train wreck), Obama will have lost my vote in 2012.

He is making the first huge mistake of his presidency. By choosing his famous middle-of-the-road approach (which is actually good, appropriate, and works for a lot of other things) for THIS issue, he is so, so wrong. He is ensuring that Democrats get re-tagged with the "Democrats do nothing but tax and spend" label for another 50 years, and that his presidency goes down in flames.

Quite the breathtaking mistake for someone so intelligent. It's a real shame.

[DaveVentura]

This bill is designed to make Obama and the Congressional democrats corpoate donors richer. Take a look at OpenSecrets to see how much HMOs, Insurance, Medical Products, etc have paid to them and now we're seeing them getting a return on their investment. It's being done so blatantly that they're literally holding a tax bullet to people's heads unless they make their rich corporate donors richer. A trillion dollar gift corporate donors while making everyone else pay more for less.

[BobLablah]

Hmmm. A HuffPo blogger who makes sense. I suppose the commenters will now rake you over the coals for leaving the reservation, even though you're right. Heck, they'll do it especially because you're right. Obama is rushing this thing through because even he knows it sucks and he doesn't want the suckers (voters) to find out until it's too late. If he can really save all that money on Medicare why doesn't he do that first and prove his ideas work? Because his ideas don't work and he knows it.

[WASanford]

Thank you Deane for making the case for SINGLE PAYER health care! I try to avoid doing business with companies that pay their CEO's and top executives multimillion dollar salaries and bonuses, because doing so leaves me felling robbed!

[Chaimirija]

Agreed