By The Sizemore Letter<\/u><\/p>\n
I hate ObamaCare\u2014but probably not for the reasons you might think.<\/p>\n
I\u2019m not an Obama basher, and I consider the latest republican threats to shut down the government unless ObamaCare is defunded to be a carnival sideshow.\u00a0 But nonetheless, I hate the program and I\u2019d love to see it scrapped.<\/p>\n
Why?<\/p>\n
Because it is a fa\u00e7ade of reform that does nothing to actually fix<\/i> our broken health system.\u00a0 Rather than the radical change it is billed as by both its supporters and its detractors, ObamaCare is an incremental reform at best and one that does nothing to address the real reasons for soaring health costs: a system in which the user of health care\u2014the patient\u2014is generally not the payer and in which doctors are compensated for the amount <\/i>of care provided, regardless of benefit, rather than for actual results.<\/p>\n
All of this is made worse by the peculiar American notion that it is the employer\u2019s job to provide health insurance.\u00a0 Most other Western countries have socialized medicine paid for by the taxpayer.\u00a0 But don\u2019t think that the American taxpayer gets off easy.\u00a0\u00a0 The American taxpayer foots the bill too, albeit indirectly through corporate tax breaks.\u00a0 The end result is a quasi-socialized model that effectively funnels public money to private insurance companies.\u00a0 It also makes American labor more expensive than its foreign competitors and wastes company resources that would be better spent maximizing profit on providing social services.<\/p>\n
There are other negatives that are underappreciated.\u00a0 America is rightly proud of its dynamic, flexible labor market, and Americans are unique among Westerners in their willingness to uproot and move halfway across the continent for the right job.\u00a0\u00a0 Yet tying insurance to employment locks many Americans into less-than-optimal jobs, and worse, it discourages risk taking.\u00a0 Given that most small businesses are run on a shoestring budget, losing employer-provided insurance is a major disincentive to the aspiring entrepreneur.\u00a0 We\u2019ll never know how many small businesses fail or are never even attempted due to the prohibitively high cost of health insurance.<\/p>\n
To be fair, ObamaCare didn\u2019t cause these problems, but it does makes this worse with its individual mandate.\u00a0 Today, an entrepreneur can take his or her chances and choose to go uninsured \u00a0in the early stages of a new business when the shekels are tight.\u00a0 And for a young person without a family to support, that is a sensible option.\u00a0 But under ObamaCare, that will no longer be possible. \u00a0”Self insuring” is not allowed.<\/p>\n
I actually believe that President Obama had good intentions when he created the tax subsidies for low-income purchasers of health insurance.\u00a0 But good intentions often have unintended consequences.\u00a0 Subsidizing insurance for low income earners does nothing to address the reasons for it being expensive in the first place, and it actually exacerbates the problem by shielding patients from the true cost of the services they receive.\u00a0 If there were not a deep-pocketed insurance company or government program to bilk, patients would push back against unnecessary or extravagant costs, and doctors and hospitals would be forced to run their operations more efficiently.<\/p>\n
You want real reform?\u00a0 Outlaw health insurance for everything but catastrophic injuries or illnesses.<\/p>\n
Think about it.\u00a0 You have homeowners insurance for major damage; think fires and tornados.\u00a0 But you don\u2019t use it every time you need to pay someone to re-caulk your bathtub.\u00a0 Why should health insurance be any different?\u00a0 It should be there in the event you need chemotherapy or brain surgery.\u00a0 But do you really need your insurance to cover a round of antibiotics for strep throat?<\/p>\n
Yes, there are some people who cannot afford even basic health care.\u00a0 But provisions can be made for them.\u00a0 And in any event, offering free basic care to low-income patients\u00a0 is still cheaper than the status quo, which sees the uninsured clogging up hospital emergency rooms with non-emergency cases.<\/p>\n
The other option, of course, is to go the direction of Canada and the UK and offer fully socialized medicine.\u00a0 That\u2019s not my preferred solution, but it\u2019s not quite the horror story it\u2019s made out to be in the American press.\u00a0 I used the National Health Service while a student at the London School of Economics, and I had no complaints.\u00a0 The UK\u2019s medical services are roughly on par with those of the United States yet cost only half as much as a percentage of GDP. The difference in cost is shocking and indefensible.<\/p>\n
And this brings us back to ObamaCare.\u00a0 I still hate it.\u00a0 Mr. Obama didn\u2019t create the health care cost crisis, but his attempt at fixing it does nothing to address its root causes. \u00a0Until patients are aware of the costs and benefits of services they receive and doctors are incentivized to heal rather than perform a series of reimbursable procedures,\u00a0there can be no real reform.<\/p>\n
This article first appeared on InvestorPlace<\/a>.<\/p>\n This article first appeared on Sizemore Insights as I Hate ObamaCare<\/a><\/p>\n