I hate McGill Health Services, its reprehensibly long lines, mediocre service, and lack of doctors, don’t you? Canada provides government-funded healthcare for its 34 million and counting population. With the passage of the Patient Protection and Affordable Care Act in 2010, the United States has joined Canada and 32 other industrialized nations in promoting socialized healthcare.
The PPACA, commonly referred to as “ObamaCare,” advocates that revolutionizing America’s healthcare system will lead to lower costs, more insured people, and more jobs. However, there has since been a fierce debate over its realized merits. In 2010, the Congressional Budget Office (CBO) announced that ObamaCare would cost taxpayers $940 billion from 2010-2019. The bulk of these costs, however, will not kick in until 2014. Furthermore, in July 2012, the CBO announced that the program costs would exceed $1.011 trillion from 2012-2019, excluding the rising costs of ObamaCare services over the years. Ignoring the implied deficit reduction, this level spending is simply too much at this point in time.
Let’s put this into historical perspective with an example: in 1967, the House Ways and Means Committee estimated that the total cost of Medicare, launched the previous year, would account to only $12 billion in 1990 but ultimately reached $110 billion that year. Unfortunately, we cannot just shrug this off as a simple bureaucratic mistake, because it depends on a number of factors, such as the participation in federal exchanges and how many are insured through their employers. With exchange participants bound to increase, ObamaCare costs are subject to rise as well, with the hefty tab being passed on to the American taxpayers.
Following up on its motto, “not counting the cost,” ObamaCare also introduced the Pre-Existing Condition Plan (PCIP), whose main goal is to provide healthcare coverage to uninsured individuals in the last six months who were denied coverage due to a pre-existing condition. The PCIP expires on December 31st, 2013, at which point insurance companies cannot exclude anyone with a pre-existing condition. In a general sense, this is certainly positive news, though it unfairly occurs at the expense of other taxpayers, who will have to pay more to make up for the rising costs of insurance from the influx in the system.
ObamaCare is not only costly to the taxpayer, it is also a significant job killer. CBO’s Director, Douglas Elmendorf, estimated in a Congressional hearing that ObamaCare would eliminate an equivalent of around 800,000 jobs over the next decade. The ObamaCare mandate dictates that companies with over 50 employees have an obligation to provide healthcare benefits, or face a levied fine of $2,000 per employee. While some corporations can deal with such expenses, this would prove a formidable challenge for the large number of smaller businesses with less capital available. In fact, corporate giants such as Stryker have already made severe job cuts while a number of companies have cut employee schedules to fewer than thirty hours per week; a move that Elmendorf alluded to in his testimonial. Thus, the newly acquired benefit of universal healthcare may very well cost some Obamacare supporters their jobs.
Finally, employees would not be able to transfer their employer healthcare plans; if they lose their jobs, they simultaneously lose their healthcare coverage. As long as the employee is in good standing with his or her healthcare provider, they should be permitted to retain the services regardless of their location. Furthermore, as fewer employers are keen to offer health insurance, workers find themselves feeling indentured to their current employers in constant trepidation of layoffs. Given this shrinking market opportunity, the program indirectly creates opportunities for larger healthcare players to monopolize the market. Notably, Blue Cross Blue Shield of Michigan accounts for 69% of the state’s commercial healthcare market. It is therefore imperative to address this issue within ObamaCare legislation to allow for a greater variety of plans and provide a larger choice of doctors.
With a healthcare system in dire need of reform, America is facing the greatest overhaul of power by government in its history. Nevertheless, this is not the kind of change that can be afforded. Americans need to be introduced to portable healthcare plans and have the option of purchasing interstate insurance. Senior citizens should be given the privilege of choosing plans that benefit them the most, simultaneously saving Medicare millions of dollars in savings annually. Ultimately, while a socialized healthcare system may be beneficial for other countries, such a system is simply not the right one for America and would be the root of higher costs and an unstable economic future. The United States already has leading healthcare technologies and continues to attract world-class doctors from everywhere. Let’s keep it that way.
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Bull & Bear.