by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Inflation in Argentina is expected to run around 25 percent in 2017. Inflation in Obamacare health-insurance premiums will come in just a few points under that. Therein lies a lesson.
With the news that Obamacare premiums will go up by an average of 22 percent next year, the Democrats and their media cheerleaders have engaged in Olympic-caliber hand-waving and misdirection, anything to avoid admitting the obvious: that the program is poorly designed, incompetently executed, and based on false assumptions about what actually ails the U.S. health-care system.
The case for replacing the law entirely has never been stronger.
The architects of Obamacare believe that health-care markets and health-insurance markets are irrational, that the relative inelasticity of demand for medical services means that consumer-driven markets are an effective impossibility, that health-care providers’ profits and marketing costs are a net deduction from the common good, and that these facts taken together argue for a highly constrained marketplace in which Washington-based political managers relying on a fly-by-wire model make the major decisions about how health care is delivered and financed. The presence of private providers at the point of sale helps to maintain the illusion that this is something other than a government-run system. In reality, Aetna and Blue Cross Blue Shield have effectively no say in what benefits their policies contain (this is mandated by “essential benefits” rules) or how their offerings are priced (this is regulated by “essential coverage standards” and the prohibition of “discriminatory” pricing). With costs far exceeding their expectations, they have precisely two options: to raise premiums across the board or stop selling health insurance.
They are doing a bit of both.