Letters & Opinion
The Economic Pitfalls of Obamacare
The Pointer
When President Bill Clinton’s healthcare reform initiative failed in 1994, (with the exception of a small handful of individuals), any mention of healthcare reform was unheard of from either the Democratic or Republican parties since then, until now. Some of the actors in this healthcare debate may have changed but the script certainly hasn’t. Familiar battle lines have been drawn and both sides have fired numerous volleys at each other. The need to reform healthcare is undeniable. However, needless to say, neither the Democrats nor the Republicans, even with President Obama’s address to Congress, have risen to anything above the basest of rhetoric in this debate. Considering the sheer complexity that is healthcare reform, it is a crying shame that instead of civilized and acumenical discussions that the people need, and deserve, to make an informed choice about this topic, all we have gotten are exaggerations, obfuscations, demagoguery and more often than not, downright lies from both sides of the aisle.
To paraphrase President Obama’s own words, he is likeable enough and considering the fact that he has not been in office for very long yet, I feel that he still deserves the benefit of the doubt. So he may be sincere when he says that the only way for people to enroll in his proposed public healthcare option is by paying premiums into the program like they would for any private health insurance plan. He may indeed be sincere when he says that he believes that only 5% of Americans would enroll into the program. I will not, however, extend the same kind of leeway to his economic advisers because they ought to know better and if they honestly do not, they have no business whatsoever in referring to themselves as economists. By remaining silent on the true cost of publicly funded healthcare and the fact that this is indeed a government attempt at taking over healthcare insurance, they are lying to the American people, or, at worst they truly believe what they are saying and are just about as credible as astrologers.
President Obama was certainly not lacking in passion when he gave his speech to Congress regarding healthcare reform. Only the most amoral comic book villains would have been unmoved by his admonition that no American should ever go broke for getting sick. Judging from the approximately hour-long speech that the president gave, it quickly becomes apparent that the deadliest of weapons in his arsenal is economic justice and has proven himself in this regard. By economic justice of course, what he means to say is the need for the redistribution of economic risks via the creation of the public healthcare option.
It is true that the economic landscape for the American middleclass has been anything but “fair” over the past few decades. Between 1979 and 2003, the average income of the richest Americans more than doubled after adjusting for inflation whereas for middleclass Americans, their income rose by only 15%. This glaring income inequality is highlighted by the fact that in that time, healthcare costs have risen far more than wages.
Most Democrats have attempted to steer clear of the word “redistribution” as it conjures up images of rabid Bolsheviks, but what is President Obama’s healthcare proposal, if not a thinly veiled attempt to chip away at the very foundations of capitalism? President Obama made a point to announce clearly that the public option is not going to be funded by taxpayers but instead by the people who opt to choose the public option themselves, much like only paying customers of insurance companies pay their premiums. Assuming that this is even possible, what was most incredible about that speech was that as soon as President Obama made that clear, almost with the same breath, he made the bold claim this is not the government’s attempt to takeover healthcare.
President Obama was partially right when he said that the introduction of a public healthcare option would make private health insurers more competitive. What President Obama did not mention, however, is that not long after the introduction of a public healthcare option, many smaller health insurers will surely go out of business. In order for a private health insurer to stay in business, it must stay profitable because like any other kind of private enterprise, private health insurers have fixed, variable, internal and external overhead costs such as infrastructure costs, utility costs, subcontracting costs, wages, employee benefits and innumerable taxes just to name a few. To top it all off, they also have to answer to shareholders who are looking for a return on their investments. The government, on the other hand, does not have to worry about those costs to stay operational. In fact, if the deficit is anything to go by, the government, which will have monopolistic powers, does not have to worry about staying operational even while trillions of dollars in debt. This will force smaller health insurers that are already facing difficulties competing with their larger competitors out of business. Therefore, in the long run, the public option will kill competition and be a detriment to private enterprise.
