Here are some things I think will happen if Obamacare is passed. When I say “you” or “your”, I mean “people on average.” Obviously, some people will benefit. This is only a two-part post, as we’re all growing weary of discussing this topic.
Your insurance costs will increase
Democrats are ever lamenting that those with pre-existing conditions have difficulty finding insurance. Obamacare mandates that insurance companies “cover” these people.
Mandating “coverage” of those who have are known to have maladies translates to mandating that insurance companies decrease profits, perhaps to the point that they are guaranteed to lose money.
I have tried many times to show that insurance is a bet. You are betting you will get sick and the insurer is betting you won’t. If you do get sick, the insurer pays. If you don’t, you pay. This bet is remade monthly. If you bet you’ll get sick and you already are, you are, in effect, cheating. The insurer has to pay and there is no way that the money you give him will make up for his loss.
That means that mandating insurers “cover” those who are guaranteed to win their bets—those with pre-existing conditions—necessarily increases companies’ costs.
Those costs will be passed along in two ways: to you (possibly through your employer), and to the employees of the insurer. Insurance companies profits—now hovering at 3 to 4 percent—must drop. There is a real danger that small insurers will fail.
This will lead to the direct opposite of the what was intended: when these small insurers fail, people will lose coverage. They will be able to find new coverage, but from larger companies with higher rates.
This new crop of “insurance homeless” will provide leverage for “progressives” to suggest, and probably win, complete government control of health.
Your health costs will increase
Your insurance costs are guaranteed to rise. Note carefully: as just shown, this is certain to happen. It is not merely probable, but inevitable. This is true even if you believe Obamacare is a good idea and that people with pre-existing conditions should be “covered.”
That euphemism is misleading: they are not “covered.” What really happens is that their health costs are subsidized by everybody else.
You or your employer will face higher insurance premiums. Thus, the extent of your coverage will be shrunk. To keep costs down, you will see higher deductibles, lower limits on payouts and such forth.
The costs of insurance paid by your employer will be offset by either cutting pay, reducing future raises, or most likely by hiring fewer workers in the future. That later will be especially true of large employers.
Small- and medium-sized companies will hire fewer people, too. While the influence of any one company is small, the effect in aggregate will be large. Small- and medium-sized business will either have to pay for insurance or pay a penalty for not buying it. So will individuals (it’s now just under $500 per year).
Businesses but not individuals will be offered a tax incentive offset. This tax incentive will be whittled away slowly and surely.
Since most businesses will hire fewer, or they will cut payrolls, or not increase them, tax revenues to the government will decrease.
Your taxes will increase
The government will expand. Obamacare will create a massive new bureaucracy, which will suck funds from the public teat.
Taxes are already guaranteed to increase to pay for many of Obamacare’s provisions: this is in the bill. But they will increase more than estimated because the bureaucracy must be fed. All experience shows that bureaucracies grow fatter in time, consuming more tax dollars as they do so. There has never been an instance in history where this was not so. Health bureaucracies especially grow quickly.
Because payroll and income tax revenue will decrease, because businesses will hire fewer and pay existing employees less, and because small- and medium-sized business are initially allowed a tax incentive, the deficit will increase at a faster rate.
Since you will have less money, you will spend less, and this will have its normal effects.
Social security revenues, for the first time this year, fell below payouts. With our inescapable demographics, this trend is guaranteed to continue. Congress has also stolen a massive amount of money from the Social Security trust fund.
Couple to this the situation of Medicare, and the deficit due will soar to, as Mr Obama likes to say, “unprecedented” levels.
Incidentally, the majority of the so-called savings to the deficit to the Obamacare bill are made by the government takeover of student loans. This measure was tacked onto health care so that the House could cheat and use reconciliation to pass the Obamacare. And so are a host of—so far unknown—additions to the House reconciliation “fix” package (which the Senate might not pass).
Lastly, for the first five years people and businesses pay the new tax but receive almost none of the new entitlements. Those start after year five, when costs begin to escalate. This appalling accounting trick means that after about fifteen years, health care will run a magnificent deficit on its own.
Taxes must increase at a dramatic rate.
A side effect will the creation of more “poor” people: I mean, “poor” people will become a larger percentage of the population because of the cuts in pay and in employment. Since these poor are the ones receiving “free” or reduced-cost health care, government payouts (and deficits) will be vastly larger than estimated. I’d say, after fifteen years, about twice what was estimated.
History is on the side of this prediction: it has happened with every entitlement.
Coming tomorrow: Part II and the best predictions.