Thoughts on "Obamacare"

Obamacare is too little, too late.

I think there's a basic structural problem in the notion of medical insurance itself. This act is just nibbling around the edges. It won't solve the problem.

As I've said before, in a world without insurance, doctors/hospitals would charge what the traffic would bear. Medical care would range from cheap to pricey. The fact that people have a finite amount of money to spend would limit costs. Insurance, theoretically, wouldn’t increase costs -- because they couldn't. The pool of people with medical insurance have a fixed total of medical expenses (based on a statistical mean, natch), with a random distribution of expense for individuals. Insurance flattens out the cost to a manageable figure for each individual in the pool, then takes a cut.

This doesn’t happen for three reasons:

In the USA, we have socialized medicine for old people with no effective cost control. This is equivalent to subsidizing car mechanics to repair junkers. This drives up costs for the entire system.

Medical companies adjusted for insurance subsidies. Another of life's many vicious feedback loops. Let’s say Joe Slob could pay $1,000 a year if his life (or his kid’s life) depended on it. Thanks to medical insurance, he pays $50 – or did at one time. Medical companies jacked up prices so Joe wound up paying $950 a year anyway -- on top of what he’s paying for insurance. Why? Because they could. Because this jacked up medical prices across the board, it jacked up insurance prices too. Joe is now paying $12,000 a year for insurance with deductibles up the wazoo -- on top of the $1,100 of out of pocket medical expenses Joe pays for basic care, assuming Joe is as healthy as a horse and has zero accidents – and the rest of Joe’s family too. But hang on … Joe’s got a credit card …

There’s no national health care – aside from emergency rooms. Hospitals can’t turn the uninsured walking wounded away. They eat the costs of these cases, and pass it on to the insured patients who provide their revenue stream. I.e.: people (usually high risk types) who aren’t in the insurance income pool are part of its risk pool. They don’t pay in, but the system pays out to them. This drives up costs, too. Medical care costs more, so insurance costs more. So more people drop their insurance. Which means more uninsured walking wounded in the emergency room. Which means …

So break the vicious cycle.

That, of course, is the basic logic behind “Obamacare.” Make everybody part of the pool, since the system is paying for them anyway.

Of course, junkies and gangbangers aren’t the only folks without insurance. Many healthy 20somethings who think it’s a rip off are too. (I was one of them, actually.) Yeah, these healthy lads and lassies are gambling on the fact that they’ll stay healthy, avoid accidents and not pay out $250 or $300 a month for a medical policy that basically buys you NOTHING until you hit various $1,500 deductibles, cleverly stacked across a range of categories. To make the system work, all the healthy youngin’s have to be in too.

But this still doesn’t work without price controls—which amount to rationing of medical care. (Remember Harry and Louise?) Right now, we have the price controls of HMOs, PPOs, etc, etc. The system sucks and it doesn’t work. Basically, all it does is assure you get lousy, impersonal medical care and pay as much as you possibly can for it. And costs go up anyway.

Even if it all worked beautifully, costs would still go up (and basic care would still be a financial groin kick) because of medicare subsidies for seniors. The medical system makes the most money on the people in their last years of life who’re the most expensive to treat. Jeez, the only way to turn down the dial on that is death panels. And we don’t want that.

A single-payer system is the only answer. Socialized medicine. Why not? We’ve got socialized teachers, police, firemen and a socialized military. The government takes care of all the basic life-and-death stuff. Why not medicine?

Either that, or a completely private medical system with no insurance at all.

I think I’ll just move to Canada.