Wednesday, July 11, 2012

ObamaCare and the Future of Health Care in America

Now that the dust has settled, at least for a while, let's assess what the Supreme Court's ruling on ObamaCare really means.

Not much, if anything. And here's why.

Our health care costs were out of control before ObamaCare was passed, and the new law will do nothing to change that, except perhaps to make the financial fiasco even worse.

That said, it's like the youngster who had promised his parents he'd be home at midnight, looked at his watch and realized it was 2:30 AM. Always a quick thinker, he reasoned that since he probably couldn't get in any more trouble than he already was in, he'd just stay out all night and face the music in the morning.

After all, he thought, how much worse could it be? But unfortunately for him, upon arriving home a few short hours later, he paid in full for his several serious errors in judgment.

Now let's talk about the future of American health care costs and affordability.

ObamaCare---Upheld and Doomed is subtitled 'Regardless of the Supreme Court, fiscal reality will prevail.'

So with respect to the long term ramifications of ObamaCare on our American health care system and its affordability, and just like our stay out all night kid, in the end reality will happen, just not yet.

Here's what the article says in pertinent part:

"History will judge whether (Chief Justice) Mr. Roberts saved the reputation of the court or lost his nerve. Many conservatives obviously suspect the latter. . . .

Yet he may also think—and would not be wrong to think—that ObamaCare is doomed in any case....  ObamaCare is a huge new entitlement in a nation laboring under commitments it already can't afford. Those who gripe that he just authorized a vast expansion of the welfare state haven't reckoned with this fiscal reality principle. . . .

GOPers, including Mitt Romney, immediately adopted "repeal" as their mantra. But repealing ObamaCare would just leave us with the health-care system we have, which is already ObamaCare in many respects—an unsustainable set of subsidies bankrupting the nation.

The solution is a tweak. . . . just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.

What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most of their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.

Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.

With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today. . . .

This was always the fatal problem of ObamaCare. Reality could not have instructed President Obama more plainly: The last thing we needed, in a country staggering under deficits and debt, a sluggish economy and an unaffordable entitlement structure, was a new Rube Goldberg entitlement. The last thing we needed was ObamaCare. The nation and the times were asking Mr. Obama to reform health care, not to double-down on everything wrong with the current system. . . .

Regardless of any Supreme Court ruling, reality will pass its own judgment on the Affordable Care Act and it won't be favorable."

My Take

While I don't have the precise answer to accessible affordable health care for Americans, I do know that when individuals have no skin in the third party payer game --- as is the custom and practice of government entitlements --- this invariably leads to out-of-control costs and wasteful government bureaucracy.

So individual choice and controlling costs go hand in hand as part of any affordable and worthwhile system. Just like if our public schools went to a voucher system where the individual choices of parents and students decided who went to which schools. Competition works wonders, as does the lack thereof.

It's the same thing with medical care. Eventually, whenever that is, we'll go to a high deductible, high co-pay formula where individuals will make intelligent and individual choices about which doctor to see, how many routine tests to run, which minor surgical procedures to undergo and so forth. A voucher type system would also work well here.

Of course, the super expensive catastrophic health care cases will have to be paid for with true insurance --- and for those who can't afford the catastrophic insurance policy, perhaps it could even paid for by We the People as a whole.

That's the basic idea behind insurance anyway --- a pooling of risks for infrequent but expensive events or occurrences --- and not an unlimited third party payer approach for doctor visits and regular medical procudures. The catastrophes are individually unaffordable, unlike the routine care.

Thus, ObamaCare is no solution to our out-of-control national health care costs. And neither is Medicare nor Medicaid. Their costs certainly aren't being properly controlled either. We need individual choice and individual judgment in the "affordable health care" act.

On the present path to financial ruin, during the next several years our nation's health care costs will soon approach and then surpass 20% of our nation's GDP. One dollar out of every five.

Accordingly, something radical must be done to avoid this outcome. The question is exactly what that will be and when it will take place.

But this much I do know. ObamaCare as designed, passed and constitutionally upheld it won't be.

And neither will it be a return to the status quo ante that prevailed prior to the new law's passage.

Let's all stay tuned, informed and involved in the national health care discussion.

Thanks. Bob.

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