Perrin’s Political Rule: Eventually, Political Liabilities are Addressed by Changes in the Law
The editors of Bloomberg dismissed the actions of the Republican House with such contempt in this editorial, it’s as if they do not fully grasp the political liabilities the Democratic Party faces from ObamaCare.
Everyone one agrees, including the White House, that the less healthy and the uninsured will sign up because they must.
Given that the uninsured have pent up health care demands for services, insuring them will cost more than insuring others. The combination of the less healthy and the uninsured will massively increase the cost of benefits paid out.
This will mean that unless enough healthy sign up to offset the cost of the uninsured and the less healthy, ObamaCare premiums will skyrocket or insurers will pull out because they will have lost so much money in the first year of the ObamaCare exchange.
Given the fact that insurers are so limited in terms of both plan design and premium increases by the law, without enough young and healthy, simply raising premiums to make up for their losses is not an option — and increasing premiums will just cause more healthy to drop out.
Perhaps Bloomberg’s editors should have read the Washington Post’s Ezra Klein (who is an unabashed cheerleader for ObamaCare) and how he described the current situation at the White House in the critical effort to find young and healthy uninsured Americans to sign up:
Turnout has been Simas’s job for years now. As director of public-opinion research and polling for President Obama’s reelection campaign, Simas was at the center of the effort to find and persuade young and minority voters to go to the polls like they did in 2008.
Many doubted the Obama campaign’s contention that it could recapture the 2008 electorate. Simas’s data, however, convinced the campaign that was possible. And when the smoke cleared, young voters and minorities did show up to the polls, and Obama won.
Now Simas, a sad-eyed Massachusetts native with a facility for PowerPoints, needs to reach those same groups again — with a much harder ask. This time, he doesn’t just need them to vote. He needs them to buy health insurance, and, in some cases, spend hundreds of dollars a month for it. If they don’t, the new insurance marketplaces — the absolute core of Obamacare — will be filled with older, sicker people, and premiums will skyrocket. And if that happens, the law will fail.
Here is the situation now, without ObamaCare, that Simas is facing: (from John Goodman):
- “About one in every four individuals who are eligible for Medicaid in this country has not bothered to enroll.
- About one in five employees who are offered employer-provided health insurance turns it down; among workers under 30 years of age, the refusal rate is almost one in three.”
Bloomberg’s editors must have dismissed out of hand the growing list of operational and design problems with the law that was written and passed by only Democrats — for Bloomberg’s editors to be so contemptuous of political efforts to address these issues or for the House GOP to represent their constituents.
But the list is so long and significant, ignoring it as Bloomberg did shows a serious bias impacting their judgment on a common-sense level. Here is a partial list: the delays in the employer mandate, the new opposition from unions to ObamaCare, the uncertainty around the cost of the health plans in each state and in the Federal exchanges, the continuing unpopularity of ObamaCare in the polls, the reduction in part-time work to less than 30 hours to avoid the ObamaCare requirement by employers to have to provide health insurance, the sixty percent of doctors who are upset about losing control of their work and compensation, many of whom are retiring early or threatening to, the worsening doctor shortage to be compounded by the millions of new patients that will come into the system (stressing availability of care even further) and the fact that community rating is designed to hike the premiums on the young, who even with the ObamaCare subsidies, will face increases of 40% or more.
These are serious problems that make ObamaCare potentially unworkable, and were completely ignored by Bloomberg,
The Bloomberg editors must be Pollyanna in their understanding of what will make ObamaCare succeed or fail, since to merely accept that all is well, and have not given a single thought to the fact that the degree of dissatisfaction with ObamaCare will find an outlet — both in the market of those signing up (or not) and on the floor of the U.S. House and U.S. Senate in Washington — is simply a symptom of the Bloomberg editors listening to only one side.
As time goes on, it is becoming more and more clear that key cheerleaders in the media really have no sense of the design pitfalls in ObamaCare, and the inability to change them legislatively, and what that means for the outcome of the law.
Just a rudimentary knowledge of the focus group and polling results of the views of the young and healthy spending hundreds of dollars on health insurance a month will bring into great clarity the unlikelihood of enough young and health signing up to offset the less healthy who will.
Here is one report from the front, about the impact of guaranteed issue and the individual mandate, from “Surprise delay in Obamacare will be costly” by Tony Pugh:
“The law is so complex, we still don’t know exactly what all this will cost and what coverage the company will offer,” said Payne, who currently provides health benefits to about 100 administrative workers. He said it has been difficult to receive firm quotes from health insurers because there are so many unknowns, like how many of his now-uncovered workers will opt for coverage.
“They’re not going to pay the $30 a week or so that would represent their share of the premium payments on a policy that has a sizable deductible before coverage kicks in,” Payne said. Especially when they know federal law requires a hospital to treat them if they have a serious accident.
Perhaps the editors of Bloomberg believe that if you just offer the uninsured health insurance, that the government designs, that by law they must sign up for, and that is heavily subsidized but will still cost more than it does now, the uninsured will just sign up.
To give the Bloomberg editors a sense of what is going on outside New York City, here is how one worker described the effect of ObamaCare on his work and paycheck:
Vernon explained that because ObamaCare has defined a full time worker as somebody who works 30 hours or more (meaning after 30 hours worked, the employer must provide health insurance) Vernon’s work hours have been cut to less than 30 hours.
When Vernon adds up his lost income plus the cost of complying with the ObamaCare mandate to buy health insurance, as Vernon said, “That leaves me $27.50 for two weeks to live off of.”
Bloomberg dismisses those faced with increased health insurance costs by the modern day equivalent of ‘let them eat cake,’ when they write costs will go up for some because the plans will “provide good coverage.”
So that’s it. Oh, now I understand. Liberal insensitivity to the poor — buy it because it’s better (and we said so) and since we are ignoring the price increase on insurance, you should too. (But you still have to pay more for it.)
It is so clear: the editors of Bloomberg have no clue what that means or costs or how it will impact choices about complying with the mandate or not. (I did say Pollyanna, right?) But pretending all is well is what passed ObamaCare in the first place, so why not just keep pretending?
Instead of focusing on any of the multitude of things Bloomberg’s editors could write about with regard to ObamaCare, they attack the Republicans for wanting to change the law.
Of course they did.
Given the severe case of Groupthink among Bloomberg’s editors, the hard realities of the problems with ObamaCare will likely come as a great and profound shock when they actually look at what is happening, instead of blaming the party that had no part in writing the bill or designing it or passing it.