Unintended Consequences



       Another week and another set of problems
are unearthed related to our favorite law, the Affordable Care Act.

       In a hearing before Congress,
Congressional Budget Office (CBO) Director Doug Elmendorf agreed with both the
Republican and Democratic positions that bashed and extolled the virtues of the
ACA respectively. How is that possible?

       The CBO concluded that the portability of
the ACA plus the fact that low wage earners would receive government subsidies
to defray the premium costs of insurance bought on the health exchange
marketplace would encourage some Americans to cut back on their work hours so
they can make less money, spend more time with their families and offset the
lost wages with the benefit gained in extra subsidy payments that are
income-based (make less; get more).

Republicans went wild. See, they chortled, the
ACA is undermining the impetus for Americans to work hard and thus the economy
is in trouble from ObamaCare.

       By contrast, the Democrats were gleeful
about the fact that people could leave jobs they don’t like because their
insurance goes with them, not with the job if they acquired the insurance
through the health exchanges. Thus they were pro-choice, for health insurance
anyway. I guess that makes the Republicans pro-work.

       This same day, the Wall Street Journal
had a front page headline reporting that many hospitals, including academic
hospitals, were being left out of the coverage offered on the exchanges as a
way to reduce premium prices. Apparently, some of these hospitals were not
happy about taking the reduced payment offered by some of the exchange acquired
plans. The payments are reduced so the plans could compete on the basis of
lower premium rates (prices).

       Can you figure this out? Is this good or
bad? I guess the answer is what my accounting teacher always said it was
whenever he got a question like that. “It depends”.

       If you acquired new coverage on an
exchange and your doctor is still on the included list, you are probably happy.
You may be so happy that you quit your full-time job, go to a reduced schedule,
blog for a living and allow the government to cover the burden you voluntarily
assumed and passed to Uncle Sam by quitting full-time work.

       If on the other hand, you are like a good
friend of mine who has had a recurrence of cancer and wanted to come to
Anderson for treatment but Anderson was not included among the choices for
cancer care in the new policy my friend acquired on the exchanges, you are not
happy at all. Sick people are like that, especially when you make it harder on

       These are the examples of the unintended
consequences of any federal law. Despite all the planning, and the CBO’s
estimation of any bill’s effects on the economy and the individuals affected by
the bill’s stipulations, this inevitably occurs.

       State legislatures may rush in and demand
that all hospitals be included on all plans listed on exchanges and sold in
their states. Great. Premiums are bound to rise because academic centers with
their mammoth fixed and overhead costs (faculty, administrative personnel,
research, education, rent and air-conditioning) cannot compete with smaller,
non-academic providers on the basis of price. The academic centers demand
higher payments for their services that they claim are of higher quality but which
they can never prove are truly better. Thus, premiums must rise. So much for
the lower cost of insurance on the exchanges.

       The effect of the ACA on American
productivity is bound to be over-estimated and used for political gain by both
sides. Don’t believe any of it. Our elected officials should worry more about
our slipping world competitiveness due to our abject failure in the K through
12 educational arena. They probably would do something if kids could vote. Once
the kids realize that the lousy system of public education to which they were
subjected is blocking any chance they have for a high paying job, and, for the
less financially fortunate young people, blocking their entrance into the
middle class, they would rebel. Of course the kids do figure this out, just too
late, when they grow up and cannot find work. By then they don’t vote for
anyone. (Even in a presidential year only half of Americans eligible to vote
cast a ballot. I am sure that our Founders who fought so hard to get us that
right are rolling in their graves).

       The Wall Street Journal loves to bash the
Obama Administration and the ACA. That’s a given. The points made in these
articles from February 6 are good ones though. The politicians will spin for
personal gain the true effects of the ACA. It’s closer to the truth that the effect
of the ACA is more akin to that of Pearl Harbor on American entry into WWII.
Pearl Harbor was the spark that got the country where it was going anyway, into
war to save the world from fascism. The ACA was the spark that coalesced the
meandering discussion about the dismal shape of the American health care
system. Just like Pearl Harbor, the ACA was just the start.

My hope is that someone would act like FDR
and convince the American people that just as in the battle with our enemies in
WWII, in overcoming the barriers to providing affordable, quality health care
to all of our citizens (and maybe our non-citizens if that would save money),
failure is not an option.

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