Thursday, October 27, 2016

Obamacare: Gift for Whomever Wins

My Defective Obamacare Health Insurance Product Just Blew Up
It would make far more economic sense to pay the tax penalty for not having insurance, save the monthly payment, and squirrel it away for a catastrophic event that may never occur. Should a catastrophic event occur, work out a payment plan with doctors and hospitals, for which you’d use the squirreled away premiums until the next open enrollment period, at which point you just jump right back into a plan again because they can’t keep you out for preexisting conditions. Should a catastrophic event never occur, you’ve got no small part of a college education put away. My health insurance used to be a rational and responsible purchase. It’s beginning to feel like neither.
Obamacare did something hugely positive: it broke the employer link. It then drove healthcare costs up so high that it makes more sense to have no insurance. For millions of Americans with no insurance, they lose nothing if you tear down the system and replace it with a system that looks more like auto insurance with the return of low cost/high deductible plans. Many will see their situation improve. Most of these people would've strongly opposed a plan to create free market health system because they would fear losing their health insurance. They have lost it and more thanks to Obama.

Gruber was out today saying Obamacare is working as intended. I think he would pass a lie detector with flying colors saying that. The plan all along was to destroy the system and make it into single payer. Obama screwed it up though, to the point where there's a base of tens of millions of people who will gladly sign up for free market reforms. There's no downside if Trump has a GOP Congress. They can ram through free market reforms and the result will be an improvement. Had they tried to do this prior to Obamacare, the initial impact would be negative for many people if only because it would force a change they didn't want to make. The short-term negative effects of free market reforms are already implemented.

The big step forward will be tax reform. All insurer paid health insurance premiums should be counted as gross income and income tax rate adjusted down to make it revenue neutral. Incentives will take over and pop the healthcare bubble.

Obamacare is a wonderful gift for whomever controls the levers of power and is willing to creatively use its destruction of America's healthcare system.

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