Sign Up For Our Mailing Lists

InsiderOnline Blog: November 2012

ObamaCare’s Future Isn’t Read in the Election Returns

The flaws in ObamaCare, writes John Goodman, “are so serious that the Democrats are going to have to perform major surgery on the legislation in the next few years, even if all the Republicans do is stand by and twiddle their thumbs.”

According to Goodman, Congress will soon find a number of ObamaCare’s effects politically intolerable, including: Seniors will see a decline in the quality of care they receive because the new entitlement was financed largely from cuts to Medicare; people will find it harder to receive medical services because the law increases demand without doing anything to increase supply; the law’s structure of penalties on employers will induce a massive shift to part-time workers; and the exchanges encourage insurers to under-provide health care to the people who really need it. Most importantly, Goodman points out that ObamaCare cannot avoid making health insurance massively more expensive for everybody. He explains that both the size of the penalty for not having insurance and the powers that the Internal Revenue Service has to enforce the mandate will not be sufficient to avoid the problem of people choosing not to insure until they are sick. That problem of adverse selection will force premiums higher and higher until the marketplace is undermined. And strongly enforcing the mandate won’t work either, he explains:

For the past 40 years, health care spending has been growing at twice the rate of growth of our incomes, on the average. Nothing in ObamaCare is likely to change that. Yet if we are required to buy coverage and denied the right to scale back benefits, choose higher deductibles, etc., health insurance premiums will crowd out more and more of the average family’s budget. Eventually, health insurance costs will threaten to crowd out every other form of consumption! [John Goodman’s Health Policy Blog, November 12]

Posted on 11/16/12 12:52 PM by Alex Adrianson

Heritage FoundationInsiderOnline is a product of The Heritage Foundation.
214 Massachusetts Avenue NE | Washington DC 20002-4999
ph 202.546.4400 | fax 202.546.8328
© 1995 - 2015 The Heritage Foundation