Want a glimpse of what the Obamacare battle will look like in 2015? Just glance at liberal websites. You’ll find a trove of insurance-company bashing. Are insurance premiums rising instead of falling by the $2,500 per family that Obama repeatedly promised in 2009? They are. If you consult ThinkProgess, Daily Kos, and Physicians for a National Health Program, you’ll learn that it’s the “greedy insurance companies” that are causing prices to rise, not the risibly titled Patient Protection and Affordable Care Act.
You can take this to the bank: In the run-up to the next presidential election, Democrats will be in thorough blame-shifting mode. It wasn’t the perverse incentives, byzantine complexity, new taxes, and layers of bureaucracy built into Obamacare, they’ll insist. It was heartless health insurers who were willing to let people die rather than accept a lower profit margin.
Obama has already shown the way. Stumping for Obamacare in 2010, he said “[They’ll] keep on doing this for as long as they can get away with it. This is no secret. They’re telling their investors this — ‘We are in the money. We are going to keep on making big profits even though a lot of folks are going to be put under hardship.’”
Let’s not weep for the health-insurance companies. They could have energetically opposed Obamacare and chose not to. As Timothy Carney of the Washington Examiner explained, it was in their interest to support a law that would 1) require everyone to purchase their product and 2) provide subsidies directly to insurance companies to help people pay for it. As Carney wrote, “would you be surprised to hear of corn farmers supporting ethanol subsidies?” There were aspects of the law the insurance industry protested, but for the most part they were content to be tamely transformed into a regulated public utility.
The health-care system that predated Obamacare was already so distorted by government subsidies, regulations, and tax incentives as to be quasi state-run. True reform would rip that government IV out of the nation’s arm altogether and encourage more competition, not less. True reform would remove the tax deductions handed to employers 60 years ago and give them to individuals instead. True reform would permit individuals to shop nationwide for the best plan and would permit companies to offer truly catastrophic plans for the young and healthy. True reform would create high-risk pools to provide for those with chronic conditions.
As the examples of the insurance industry and the corn growers demonstrate, it’s a mistake to rely on the business sector to promote free enterprise. Some businessmen do, but many are happy to engage in rent seeking from the state. Farmers, universities, banks, construction companies, green-energy firms, car companies, the telecommunications industry — the list of supplicants for taxpayer subsidies is endless.
Republicans are perceived, and often see themselves as, the pro-business party. They should think of themselves as pro-consumer instead.
Still, Republicans do understand the basics of supply and demand better than do Democrats, and many predicted the problems Obamacare is already experiencing. They understood, as Obama and his supporters apparently did not, that the laws of economics are not optional. You cannot extend health care to 30 or 40 or 50 million people (the number kept changing) who previously lacked it and bring down total health spending simultaneously. You cannot force insurance companies to accept all customers regardless of preexisting conditions and expect that premiums will not rise to cover the expense. Further, once people realize that insurance companies cannot reject them when they become sick, the incentive to purchase health insurance among the healthy population disappears. (The small fine for failure to buy insurance will not compensate.) You cannot mandate that employers with 50 or more full-time employees provide government-approved insurance without causing employers to shift to part-time employees or decline to hire. You cannot impose a “Cadillac tax” without employers’ raising premiums or reducing their coverage.
The Democrats’ reform of the health-care system is stumbling into a predictable and predicted morass. Democrats will inevitably conclude that this calls for even more government. Republicans should side with consumers.
— Mona Charen is a nationally syndicated columnist. © 2013 Creators Syndicate, Inc.