Oct 4

Holes in Obamacare Arguments

I recently read a post by a friend referring to an article on MediaMatters which claims to debunk many "myths" about Obamacare. The problem is that the article doesn't debunk everything they claim to debunk. First, here's the article: http://mediamatters.org/research/2013/10/01/15-myths-the-media-should-ignore-during-obamaca/196181

Now, many of those myths are indeed falsehoods, but not all of them. Let's start with Myth #7: Obamacare "Narrow Networks" Will Constrain Health Choices. They "debunk" that by quoting a NYT article which states "narrow networks make health insurance affordable to the uninsured by reducing costs due to streamlined provider networks." What? That's not debunking the myth, that's agreeing with it. Yes, narrow networks do help keep costs lower than they otherwise would be, but that actually affirms the "myth" that narrow networks will give people fewer choices.

On other myths, such as Myth #9: The Affordable Care Act Covers Abortions, neither side is really verifiable. One side says that Planned Parenthood will use the grant monies to fund abortion, but the other side quotes some talking heads making claims about future events saying, "no they won't." There's no proof on either side, so the myth can't actually be debunked.

One myth, Myth #10: The Affordable Care Act Is A Job Killer is just straight up true and they did not actually debunk it. They're claiming it's debunked because they quote some studies saying it's debunked, but they're ignoring lots of other data saying that it's actually true. Here are just a few instances from the past few weeks: http://michellemalkin.com/2013/09/15/obamacare-related-layoffs-hour-cuts-and-private-coverage-dumps-of-the-week/. Yes, that blog is biased towards the right, but it's undeniable that businesses are cutting hours and instituting hiring freezes due to the extra costs and strains of Obamacare. I've read many more instances than just the ones in that article. Now this doesn't mean that every business will be cutting hours and instituting hiring freezes, but just that some have already done so and it's affecting the economy.

Last, with regards to Myth #2: Premium Prices Will Increase Due To Health Care Law, they haven't really debunked it because they're making some unfounded assumptions. First, they quote a study done by the Health and Human Services Department (HHS Dept) claiming that premiums are "expected" to be 16% lower than predicted. This can't really be treated as "proof" because it's a prediction, not something that has happened...it's not based on observations. The only other report they quote is another study by the HHS Dept claiming "56 percent...of the people who don't have health insurance today may be able to get coverage through the Health Insurance Marketplace for less than $100 per month." "May be able to?" That doesn't sound very convincing.

To analyze this myth from a logical perspective, just think about how insurance works. First, Obamacare mandates certain minimum covered items in all health care plans. That means that some low-cost plans will have to cover more things than before. This means that premiums will have to go up to cover those costs. Second, Obamacare mandates there be no premium difference due to gender. So if a plan previously cost $100 for a male and $150 for a female, does it make sense for the insurer to drop the female down to $100? No, because if they could cover their costs at that level they would have done it already. Instead they'll raise both plans to $150, and premiums have gone up once again.

Now, in some markets, there will definitely be some affordable plans at the beginning, when things are just getting rolling. This is because the system hasn't really taken hold yet. Once people start getting enrolled in the system, it's fairly predictable that premiums will increase due to a phenomenon known as the "death spiral." This is a well-known phenomenon in the health insurance industry (http://en.wikipedia.org/wiki/Death_spiral_%28insurance%29) that will take hold in the next few years in the Obamacare exchanges. Many young, healthy people have already said they would rather go without insurance and just pay the penalty. Since sick people can no longer be denied coverage under Obamacare, this will quickly lead to spiraling costs.

So yes, in general, more people will have insurance at first, but costs will quickly increase. And government will once again have their fingers deeper into our pie. I'll be curious to watch my predictions unfold, and for once, I hope I'm wrong.