I have an embarrassing admission to make. It’s frightening, really. I wonder if I’m turning against everything I have stood for, yet I cannot suppress this feeling. I think I like Obamacare.
This is still just a feeling. I have not gone through the details of this 900+ page beast of a law, so I my feelings may change. To date, I have simply read the Wikipedia summary, and gotten to experience parts of it in action, and so far I like what I see on the whole. Yes, it entails a bunch of bureaucratic micromanagement of the insurance companies, and the Healthcare.gov site is a sad joke. But Obamacare also includes some good parts, some that are really, really, really good.
The best part? Thanks to Obamacare I’ll be saving thousands of dollars in 2014. Woohoo! And I’m not talking about the explicit subsidy (for which I hope to never qualify). I will be saving money because my new Obama-approved health insurance policy is going to be over a thousand dollars a month cheaper than my old plan. Yes, my new policy has a high deductible, but the maximum (in network) out of pocket is less than my savings on premiums.
You might ask, “How can this be?” After all, many young adults are seeing premium increases along with a penalty for not participating. Answer: I am middle-aged family man who wants to switch from well-paid wage serf to founder of a new business. Early in 2013 I quit my job and cashed in my 401k to work on the new project. Alas, the COBRA benefits from my previous employer were very expensive and eating into my savings. Due to circumstances I will not detail here, getting a cheap high deductible plan was not an option—until the 2014 rules went into effect.
Thanks, young whippersnappers!
Why should you care? I’m not pulling an Al Franken and declaring this to be the decade of Carl Milsted, where all government policy should be optimized for my benefit. No, this should be of interest to you as well because of why Obamacare happens to benefit me. I am attempting to live an important part of the free liberal dream, to do capitalism. The old tax code supported system of employer-provided medicine which helped lock people into a lifetime of wage serfdom. Young nerds starting a dotcom business straight out of college need not concern themselves with health insurance; individual plans for the young and healthy were cheap. Wait until your body starts to creak a bit and you have a medical history, and employer-provided group plans become a big deal. Community rating—getting rid of preexisting condition considerations—weakens wage serfdom. It makes it easier to change jobs or start your own business. This is very free liberal.
Oh, but I hear some young libertarians in the back row mumbling something about “subsidy-mooching geezers”. Fair enough, if we were going from a free market system to Obamacare. We aren’t. We are starting with over a half century of government meddling through the tax code. I paid my dues when young. I paid thousands into my employer’s group plan while I was young, healthy, and going years between doctor’s visits. I just don’t have any contractual credit for it; the money went towards lowering the rates of the previous generation of graying worker units. Were there a free market in health insurance, I would have bought the medical equivalent of term life, forming a group of one—at different ages. But the tax penalty for doing so was so high that insurers didn’t provide such policies, and I would have had to not only pay for such a policy with after tax money if it did exist, I would also have to pay into my employer’s group plan as it was not optional—once again, because of tax policy. Community rating helps undo decades of Roosevelt damage.
What about that individual mandate? Yes, it is meddlesome, but without it community rating would fail. The individual mandate makes it possible to have something resembling an individual market for health insurance. And guess who came up with the idea? The Heritage Foundation!
Obamacare includes many other mandates which are not necessary to make community rating work; it includes a social democrat wish list that makes small government advocates cringe. I too cringe at some of the provisions. However, some of them are not so bad—or even good on the whole.
Rates for millions of people are going up in part because Obamacare also mandates that health insurance also include some pretty generous mental health coverage. This is directly very un-libertarian, but it has potential libertarian implications. With the states closing down their mental hospitals, prisons have become the dumping ground for the uninsured mentally ill. Better to fund some expensive short stays in hospitals than multi-year stays in prisons, even if the dollar cost is the same. Prisons and liberty don’t mix. And if more troubled berserkers-to-be get help early, we might have fewer mass shootings, fewer calls for gun control. Finally, the explosion in drug treatment centers that will result from this mandate may well lay the groundwork for decriminalizing recreational drug use and treating drug abuse as a health issue as has happened in Portugal.
Social conservatives have something to celebrate as well: Obamacare is the biggest piece of anti-abortion legislation in decades! Under the old system a woman not planning to get pregnant could save on health insurance by not purchasing a maternity care rider. An unplanned pregnancy could thus mean thousands of extra dollars in doctor bills, making abortion look very tempting, especially for the not well off. Furthermore the contraception provision will reduce the number of unplanned pregnancies in the first place by reducing the marginal cost of fun/effective birth control down to zero. (If you believe that The Pill is a form of abortion, then this provision is pro abortion. Otherwise, it is extremely anti-abortion.) And for the heartless conservatives, Objectivists and Darwinists in the audience, note that this provision affects poor women more than professionals. This means fewer unplanned poor babies, fewer welfare recipients.
Obamacare is more transpartisan than generally recognized.
This is not a ringing endorsement. The Patient Protection and Affordable Care Act is by no means optimal. It is frighteningly complex, nearly a thousand pages in its final form [PDF]. We are seeing the first consequences of that complexity in the Healthcare.gov fiasco. We probably have more crises in the making. The cost containment measures could fail. The mental health provision could blow up in several directions. The law may have horrors lurking within which haven’t been brought to my attention yet. I reserve the right to complain bitterly about Obamacare in a future article.
But the bar has been raised. Obamacare will not be simply repealed. Those who want something smaller and/or simpler need to meet a higher standard than status quo pre Obama. I have my own simpler proposal. Readers are invited to make their own suggestions in the comments.