A Short Guide to Obamacare
by Matt Faherty
September 23, 2013
It’s not a national healthcare system. It’s not the free market. It isn’t what we’ve had for the last forty years. So what is Obamacare?
Maybe I am too late to write about this topic since the Affordable Care Act has already been passed and is in the process of implementation. Then again, the bill is infamously opaque, and I believe very few people, either in Washington, the media, or the general public understand what Obamacare is, or how it will make healthcare more affordable. A study in the Journal of Health Economics published this month claims that only 14% of Americans between ages 25 and 64 have a basic understanding of how insurance works, let alone how Obamacare will effect it. Nobody even seems to know how long the bill is with estimates ranging from 10,000 to 33,000 pages of mind-numbing bureaucratic documents.
According to Nancy Pelosi we should start to know what is in the bill at this point, so I will take a crack at it.
Overview
The Patient Protection and Affordable Care Act is a jumble of convoluted regulations designed to encourage economic interactions which are uneconomical.
Over the last fifty years, extensive government intervention has distorted the private healthcare market beyond repair, resulting in skyrocketing costs and premiums. With tens of millions of Americans priced out of the health insurance market, Obamacare seeks to increase coverage by mandating individuals, businesses, and insurance companies into the existing market structure.
If that last sentence doesn’t make a lot of sense, that’s because it doesn’t. Thirty to fifty million Americans were not insured in 2010 for a reason: because it’s not feasible to do so (for most of them at least). The actuarial models used by health insurance companies suggest that insuring such people will cost more money in the long run than it would produce. Therefore, no private, for-profit company will touch theses uninsured individuals.
The reason Obamacare is an incomprehensible pile of minute regulations is because every single attempt by the state to alter the market creates five worse problems in its wake, which are subsequently “fixed” by more regulations, which create more problems, and so on and so forth.
It would take a monumental effort to go through the reasoning behind every component of the bill. For the sake of this article, I will just look at a few major components and their effects on the economy.
https://blog.heartland.org/2013/09/a-short-guide-to-obamacare/