Economics, Health Care, Pethokoukis

Obamacare, meet Hayek

Image Credit: spirit of america / Shutterstock.com

Image Credit: spirit of america / Shutterstock.com

The entire of Obama press conference today played out like some Hayekian cautionary tale where a befuddled central planner complains about the complexity of real life. As the president put it: “What we’re also discovering is that insurance is complicated to buy.”

Yup, reality is more complicated on the ground than from 30,000 feet or from White House meeting rooms. But Obama’s discovery has led to no humility. In theory, insurers might be able to extend health insurance policies — ones that might otherwise be canceled — next year for current policyholders, thanks to Obama’s administrative decision today. But maybe only in theory. Here is Jim Donelon, president of the National Association of Insurance Commissioners:

In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect.  In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues. We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.

And insurance industry consultant Robert Laszewski:

This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision —  and give them a reasonable time to make that decision —  and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes.

But those are hardly the only issues:

1. Is this even legal?

2. The federal online exchange fiasco probably already means the exchanges are too full of the older sick rather than the younger healthy. This move would seem to worsen that problem plus drive up premiums inside the marketplace. As Peter Suderman explains, the result of this ad hoc effort to keep the now infamous “If you like your insurance…” promise is the “destabilization of the law’s fundamental policy scheme, which requires healthy people on low-cost insurance to purchase more expansive, more expensive coverage in order to balance out the costs of sicker individuals.”

3. And as AEI’s Joe Antos explains: “There is no question that many people will find themselves in a worse situation next year—paying much higher costs, less access to physicians and hospitals, and, in too many cases, without health insurance at all. The White House remembered there is an election coming up and put the next day of reckoning in 2015.”

What a mess.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.

46 thoughts on “Obamacare, meet Hayek

  1. Correct. Hayek is laughing (so am I).

    1. No, it is illegal. Not a problem – this is Obungle.
    2. Correct, the exchanges so far are sicker/older-skewed.

    Here’s the punchline: the process cannot be stopped, or reversed. The insurance cos can’t simply go back in time and re-offer policies which no longer exist, and if they could, would they want to, since Obama’s fickle responses to date have been unilateral mood swings, and they could get caught on the wrong side of one of them?

    This is beyond amateur hour, and has quickly gone from “terrible” to “all engines flaming vertical nosedive.”

  2. Obamacare looks like a debacle…but why does the Soviet-style VA work? The VA is federally funded, federally staffed (300,000 employees), federally housed, federally administered health for former federal employees. I assume there is a bust of Lenin in VA HQ.
    Yet, the VA is heartily supported by the GOP and the AEI never questions the VA.
    Hayek loves the VA?

    • VA works because it covers only several million people, with a budget provided by a huge tax base.

      I once extrapolated that the VA system would cost about $2.1T if applied to the entire US (and removing the cost of Medicare).

      Also note that VA patients can’t by themselves vote themselves improved medical care (unlike the general population of the US if we went to socialized care). However, the system tends to vary from expensive to poor quality. When horror stories leak out money pours in and the problem is fixed. Overspending leads to reduced funding and eventually horror stories.

      • DonS-

        I agree with you.

        Therein lies the hypocrisy: The GOP is a stalwart supporter of the VA. I assume it is because of campaign money and votes, somehow.

        As for Obamacare, I think it is a debacle. The US health care is not leading the world anymore, despite what you hear. I think you can get better care in Thailand.

        And the US system eats money.

        I hope the GOP can come up with a better way. Right now the GOP says VA is the better way, if their put money where their mouth is.

        • Let me remind you of a Khmer Rouge saying, Benji:

          No gain in keeping, no loss in weeding out.

          We have a different saying in the US: Fuck You Obama

          From the Greek: Molon Labe

          • Mark Twain: “The news of my death is greatly exaggerated.”

            The missus is going to getting to get twice the coverage for the same dollars once I sign her up, but that will be as late as possible, including three months of going bare. She’s healthy. If that changes in early 2014, they have to take her anyway. Remember?

            For the first time in my life I am able to game an insurance company and I’m loving every minute of it.

          • Just making up an inch of ground on the subsidies my taxes provide for employer group policies. My best to your family, too.

          • That will be hilarious watching your wife die when there’s no service offered in about 3 years.

            I’ll be laughing at your pathetic wasted life/wife as you watch her expire. You’ll only have yourself to blame.

            LMFAO

          • Mark Twain: “The news of my death is greatly exaggerated.”

            Only because he didn’t have Obamacare.

            Glad you are one of the few net taxpayers(so you say) who won’t be hosed by Obamacare, Turd. Like most liberals, it’s all about “vote for your interests.”

          • Actually Paul, with Turd, it’s “gimme mine, vote to screw everybody else.”

            Turd doesn’t give a shit about anyone but him.

            As long as he gets his, everyone else be damned.

            That is actually the correct response to socialism. We’re there now, only he laughably and disgustingly positions himself as a “concerned citizen.”

          • My wife’s current coverage is capped at $50k/year, which is good for about 10 days in intensive care. I wish I were joking but I am not. ACA gives us a bigger deductible but it also gives us true catastrophic coverage. If ACA goes away, you’ll want to judgment proof yourself to the best of your ability (paid-up house; assets in retirement accounts). The sad fact is that even prudent Americans are only a car wreck or a major illness away from insolvency.
            BTW ACA will fail sooner or later because it does nothing about medical costs.
            And Mesa, I wish your wife a long life and as happy a one as possible living with you.

          • You and your wife deserve zero insurance.

            And zero sympathy.

            You are parasites, which will become apparent when IPAB denies you care.

            Scumbag.

          • Turd,

            BTW ACA will fail sooner or later because it does nothing about medical costs.

            That’s exactly what we racist Teabaggers have been pointing out since Obamacare first reared its ugly head. Not only doesn’t it control costs, it doesn’t do any of the other things Obama repeatedly claimed it would, except maybe the pre-existing conditions part. He absolutely didn’t need to wreak so much havoc to get that done, but it was never really about “affordable healthcare” anyway: http://www.wvwnews.net/content/index.php?/news_printer/why_obamacare_is_a_fantastic_success.html

            Yet, you’re somehow still delighted over the debacle.

          • So who says I am delighted, (except to see insurance companies getting jacked around)? On IPAB, we’ve had this discussion before, and based on my experience, death with dignity is not possible in hospitals.

          • You just said so, asshat.

            We don’t really give a shit what you think about death, only that yours be expedited.

            You don’t get to decide that for the rest of us, yet this is exactly what IPAB/Obamascare and this dangerous leftist stampede does – there is a reason the country was set up to prevent these types of conflicts.

            You are quickly catching up with Idiot Domain on the all-time universal most ignorant organism list.

          • Ummm, passed by Congress, signed by the president, blessed by the Supreme Court. What part of that is not binding on all Americans? But keep it up. When it craters you’ll need a record of 8th grade BS if the teabagger nutcases are to snatch defeat from the jaws of victory yet again.

          • Ummm, you’re a moron.

            Passed haphazardly via backdoor reconciliation (due to Scott Brown’s election) in the middle of the night to minimize public outrage, then upheld in a bizarre ruling.

            The votes didn’t exist to pass this piece of shit, and the tortured Roberts ruling does nothing to support it. It has no legitimacy.

            But keep it up – eventually when this whole thing implodes, you’ll be dragged into the street and beaten.

            I’ll laugh hysterically.

          • You mean you’ll start laughing. Near as I can tell you’re already hysterical. Q What you do you call Mesa running down the road covering his head? A. Poultry in motion.

        • Turd,

          Ummm, passed by Congress, signed by the president, blessed by the Supreme Court.

          It only passed because Obama repeatedly lied his ass off about what was in it. If he were in the private sector(hard to imagine, I know) he’d be heading to the slammer for fraud.

          What part of that is not binding on all Americans?
          Zero doesn’t respect Obamacare as written law. He changes it on a whim now like he’s some banana republic dictator. So why should we feel bound by it?

          I notice you like to post jokes, so here’s one for you I particularly enjoy:

          Q: How do you starve an Obama voter to death?
          A: Hide his food stamps under his work boots.

    • I am a disabled veteran and at times have had to use the VA. I will state it plainly for you: it SUCKS. I have an appt on Nov 25 for much needed treatment. Oh, did I mention I had to make the appointment about SIX MONTHS AGO!?!? The care is substandard. the GOP and AEI don’t necessarily support the VA’s govt run healthcare, they support VETERANS.

    • Many veterans experience long waits for admittance and treatment. The efficiency of VA medical services has often been a problem — and that is with a much smaller number of people to help than is the case with Obamacare. It is unfortunate that efficiency is an issue, since the vets have given so much more, lives, limbs and years, for their health care than the general public. Honoring their service is why there is no objection to providing them with government/taxpayer funded medical care.

  3. As Hayek once said (and I paraphrase), “It’s not an issue of whether society will be planned or not. It’s simply a matter of whether it will be planned individually by each of its millions of participants acting in their own self interest or by the strong hand of the central government acting in its interest.” Personally, I choose the former. It’s what made this country great and wealthy.

  4. The President continues to demonstrate over and over that he hasn’t the vaguest understanding of how a business operates. You don’t snap your fingers and reinstate plans that have already been terminated and that no longer factor into your business plan. And knowing that the President has (or thinks he has) the power to change the rules any time he wants, why would you even consider that?

  5. Sam, the answer is because he thinks that issuing a proclamation makes it “look like” he’s doing something. He’s always wanted to rule by edict and, thus, he tries it anytime he sees something he doesn’t like or understand. Unfortunately, the laws of economics can be overturned by no man. All you can do is make a mess of things while trying to do so. That is the one thing he has been successful at since moving into the White House.

  6. The Republicans have shown themselves to be completely inept as strategists. I posted this or the equivalent many times before putting it on my Facebook account:

    “Bruce Hall
    September 30
    I am totally disgusted with the Republicans for trying to delay Obamacare [Affordable Care Act] for a year and potentially shutting down the federal government. Not only should Obamacare be funded, but the House Republicans should write into their bill than no person or no organization shall be given a waiver… even if they were previously granted one… for the sake of fairness to all. Furthermore, the implementation should take place immediately as required by the law passed by Congress and signed by the President, not haphazardly implemented as has been proposed.

    It is only fair that since the majority voted for Obama and the congressmen who passed the ACA, that every last one of them get to benefit from its implementation as soon as possible… immediately.

    The Republicans voted against Obamacare and were outvoted. The Republicans should stand aside and let the full fury of Obamacare be felt without waivers, without exception.

    Let the political chips then fall where they may.”

    Can you imagine the calls to repeal the ACA had the Republicans simply said, “It’s the law so we must abide by it even though we opposed it vigorously before it was passed and we continue to oppose it vigorously now. The consequences of implementing this law are entirely the responsibility of the Democratic Party.”

  7. But, Hayek, meet Alinsky. That was precisely the POINT of Obamacare (and much else this administration does): to create mass confusion and chaos so as to make rationale for “fundamental transformation” of the American system.

  8. No, it’s NOT legal.

    The President has no authority to make law. Administrators can “fill in the details” of a policy enacted by Congress; they cannot be delegated authority to make policy.

    That was decided long ago in 9-0 decision by the Supreme Court, ALA Schechter Poultry Corp. v. United States (in 295 U.S.).

    This “administrative fix” clearly flies in the face of the overall fascist ideology of the plan, by which costs are to be shifted from the politically connected to the politically disconnected. How can such cost-shifting be effected when people leveraged out of their plans suddenly are allowed to leverage themselves back in? As is pointed out, the idea is to force the healthy to pay for the sick (including all those with “politically connected” diseases like drug addiction). This “administrative fix” does not do that and effects just the opposite.

    The Democrats’ plan all along was to make niggers out of everybody, starting with the doctors (who inevitably would be obliged to cough up a portion of their cotton balls for free).

    Obama, Pelosi, Harry Reid, &c., are not just leftist boobs. They are genuinely evil people.

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