Week in Review
Obamacare is not going well. The say it is. But it isn’t. The White House can all of a sudden give us a number like 8 million enrollees when they said earlier they couldn’t tell until the insurance companies tell them. And the other big question is this. Are these enrollees? Including all people who enrolled whether they paid or not? Or are these only the people who paid? Or are most of these people enrolling in Medicaid? Those who won’t ever pay? If that 8 million aren’t paying customers Obamacare is doomed.
So the financial foundation of Obamacare is likely very perilous. Where the sick and poor are probably signing up more than the healthy with money. And the delay of the employer mandate to sometime after the midterm election takes a bad financial foundation and makes it worse. For they can’t keep delaying the funding parts until after elections. Because someone has to pay for all of the subsidies. As well as the high cost of the old and sick. Which alone may bankrupt Obamacare (see Labour considers raising national insurance to fix £30bn NHS ‘black hole’ by Toby Helm posted 4/19/2014 on the guardian).
Radical plans to increase national insurance contributions to plug a looming £30bn a year “black hole” in NHS funding and pay the spiralling costs of care for the elderly are being examined by Labour’s policy review.
The Observer has learnt that the idea is among options being considered to ensure NHS and care costs can be met under a future Labour government, without it having to impose crippling cuts on other services in successive budgets.
Senior party figures have confirmed that a scheme advanced by the former Labour minister Frank Field – under which funds from increased NI would be paid into a sealed-off fund for health and care costs – is being examined, though no decisions have been taken.
Recent figures based on data from NHS England and the Nuffield Trust and produced by the Commons library suggest that NHS costs alone will go from £95bn a year now to more than £130bn a year by 2020.
Some have suggested that they designed Obamacare to fail. So they can get what they really want. Single-payer. Or national health care. Like they have in Britain with their National Health Service (NHS). Which is running an enormous deficit. Based on the above numbers it currently is 31.6% (£30bn/£95bn). Which is just unsustainable. But this is what an aging population will do. When you have more people leaving the workforce consuming health care benefits paid for by fewer people entering the workforce. Which should be a huge warning for the United States. Because they have an aging population, too.
At the current exchange rate that £30 billion comes to $50.37 billion. Is this what the US can expect? No. Because they have five-times the population Britain has. So their deficit will be approximately five-times as big. Or $251.85 billion. That’s a quarter of a trillion dollar shortfall PER YEAR. At least. And $2.52 trillion over a decade. So unless the Americans can somehow make their people less sick so they won’t consume health care resources the deficit alone for Obamacare will be more than twice the original CBO projection for the total cost over 10 years. Which means the Americans will have to do what the British must do. Increase taxes. Charge for some health care services in addition to these higher taxes. Or impose crippling cuts to services. Hello rationing. And longer wait times.
This is the absolute worst time to impose a single-payer/national health care system. Just as the baby boom generation fills our health care system in their retirement. It might have worked if we had kept having babies the way we did before birth control and abortion slashed the birthrate. But we didn’t. And now we have a baby bust generation stuck footing the bill for a baby boom generation. Fewer paying for more. And the only way to make that work is with confiscatory tax rates. Or death panels. Because you have to raise revenue. Or cut costs. There is just no other option. Or people can work longer, pay out of pocket for routine, expected expenses and buy real insurance to protect themselves from catastrophic, unexpected medical expenses. Which is actually another option. And probably the only one that will work.