ObamaCare: The Chief Problems

This is an update on my previous blog post about so-called healthcare reform, “Health Care for All?” Now that Obama and his fellow Democrats in Congress have revealed a little more about their vague plan to supposedly “make healthcare more affordable” I am able to better accurately point out the flaws in what they are proposing – as well as how astoundingly little the Obama administration knows about basic economics. Much of the plan is similar to the plan that Clinton proposed back in 1994, greater regulations in the insurance and health care industry, with the addition of a government option which people who are unhappy with their current healthcare can choose. Basically, under this plan the government will either subsidize part or all of the medical expenses of people under the government plan or force health care providers or insurers to provide their services to people at a reduced charge. How exactly the government will provide cheaper healthcare for those under the government plan I am not exactly sure. Either way the government plan will actually increase, rather than reduce, the cost of health care for most Americans. Greater “regulation” of the health care and insurance industry will certainly increase the price tag on health care.

First, we must remember the basic message of my last blog on this subject; government may reduce the price of health care for a certain individual or group but cannot reduce the cost of providing healthcare services. The cost of healthcare is determined by supply and demand. If the government mandates a price ceiling on healthcare for those under the government plan, this will mean that the healthcare companies will have reduced profits. They will either have to reduce capital investment from reduced profits or they will have to charge the middle class who are not under the price ceiling more. In the first case the quality of our healthcare will be reduced because the company will have fewer profits to put toward increasing the quality of their insurance or healthcare services, whether this means less coverage, less doctors hired, or less new technology and medical advances. In the latter case it will mean that the hard-working middle class will not save money on health care reform but will end up paying more. If Obama does not create a price ceiling, but only subsidizes healthcare for those under the government plan, this will mean a ballooning deficit for the federal government, which will mean increased taxes for the middle class.

I believe that the current proposals for the cost of this health care plan are grossly underestimated. What democrats fail to understand is that whatever measures they use to make health care “affordable” for those under the government plan, the result will be an increase in demand. With the price of healthcare reduced for those under the plan they will visit the doctor more often than usual. In addition, when they are not footing the cost of the bill, the incentive for people to engage in less risky health behaviors, such as smoking, excessive drinking, and overeating, is reduced. Remember, the biggest health problem among America’s poor is obesity and heart disease. Many of these people also smoke. The public will not become healthier from this plan but less and the bill will be footed by those hard working Americans who actually have to pay for their healthcare. For my solution to reduce healthcare costs, see “A Healthcare Solution” below. For more about the contradictions in ObamaCare see this Time article: http://www.time.com/time/magazine/article/0,9171,1914973,00.html

There is also the question about whether or not abortions and euthanasia will be funded under this healthcare bill. While Democrats claim that nothing in the bill supports such an assertion, others point that the working, like most of the proposal, is ambiguous enough that it may include these ethically questionable procedures. Even those who believe that abortion and euthanasia should be left up to the conscience of the one receiving and performing the procedures should be upset that people who find these things ethically immoral are being forced to fun them.
Ultimately this plan will not help reduce the cost of healthcare or increase the health of Americans. All it will do is make health care more inefficient, costly, and stagnant and entangle the government in more controversial ethical questions.