Thursday, June 28, 2012

What This Morning May Bring UPDATED

Update (bumped to top)

Obamacare appears to have been upheld as constitutional in the main. Now it gets interesting... Expect potential nullification challenges from several states (although the limitations on Medicaid expansion may prevent them), and, of course, repeal just joined the economy as a primary issue for the fall. Welcome to a long, hot summer.

Original Post

I am not one for predicting what the Supreme Court will do, but my growing unease since the Arizona decision on Monday is reflected in the Intrade market regarding the question of the individual mandate being declared unconstitutional by it's drop of 10% in the last two days since that decision was announced.

The individual mandate is, of course, at the center of the legal challenge, but it is not all that is wrong with a law that I find to be bad, bad, bad. To review the bidding...

As I noted following the passage of Obamacare:
If I have to buy insurance to drive a car, that's fine. I don't have to drive. I can walk, ride a bike, take the bus, whatever.

If I have to pay an airport tax to help defray the costs of the TSA, that's fine, too. I don't have to get on an airplane. I can walk, ride a bike, take the bus, whatever.

This bill says that I have to purchase health insurance. I don't have to drive or fly, but I do have to live.
There's a world of difference in coercing the execution of a private contract simply because you exist vs. usage requirements for public goods/services (driving), or engaging in potentially exploitive (pornography or prostitution), or dangerous behavior (public narcotic use or recklessness). But my objection to this law goes beyond the individual mandate. It violates the principle of subsidiarity at both the state and individual levels. It doesn't provide for conscience protections (or has very limited ones). Its costs have been obfuscated and when fully implemented will be nearly 3x what was advertised at its passing. The promise of my getting to keep my insurance, if I liked it at the time of passage, is patently false. It will create dislocations in reimbursements to service providers, or access to services. In the end, it actually still won't ensure everyone has coverage because of the incentives built in for adverse selection. I could go on.

On a more personal level, my self-insured employer has already started taking compliance steps that have increased my out of pocket costs by thousands of dollars, with less coverage and fewer plan options. I've been able to hold my job (and had to hold my job), so I haven't had to face the issue of pre-existing conditions, deniability for which is a real problem in today's "market." Yes, the current law's guaranteed issue provision works to that situation. However, beyond my incomplete list above, I just don't think such relief will be anything but temporary, i.e., the situation will be unsustainable before I reach retirement age because of costs, or unacceptable because of rationing--I just don't buy it; I don't think it will work and it will cost a lot of people a lot more money. There are alternate remedies that better address the underlying problems.

Regardless any elements of noble intent and desirable features, I think it is a bad law that addresses the wrong problem. The health care problem in need of reform is insufficient (a term I'll stipulate) access to needed and affordable health care services. Congress' remedy here is to coerce the execution of private contracts in a derivative market, namely the health insurance market that serves the health care services market. To what end? To correct problems that Congress itself created through price controls, anti-competitive constraints, and guaranteed service requirements. Yeah, that's not gonna work.To apply general tools to specific problems is to fail.

Solve the problem. And that means starting over.

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