Monday, October 21, 2013

How the Affordable Care Act Hurts the Poor

President Obama with HHS Secretary Sebelius

Most of the dialogue saturating the endless media outlets is the demagogues’ propaganda either for or against the Affordable Care Act—otherwise affectionately known as ObamaCare.

One side is completely against it, virtually predicting the doom of medicine as we know it (not to mention the mass deaths that will occur when the next outbreak hits).  The other side completely for it, predicting the mass deaths which will occur when the next outbreak hit because those mean old conservatives hate the poor (and all beautiful things that induce happiness).

Let’s step around the propaganda of Fox News and MSNBC—both of which are as honest or balanced as a see-saw with a fat kid on it—and take a look at a real case.

We’ll look at one of my dear relatives, to whom we’ll refer as Jane Doe.  Like many women across the country, Jane is a single mother with three children.  Her ex-husband is a total deadbeat who fled California to avoid paying child support—she never even asked for alimony!—and he’s still out there somewhere, running.

Jane lives on a $30,000 annual salary.  When we look at the Austrian school’s theories of subjective value and marginal utility, it immediately becomes super impressive that she manages to maintain three children, a car, and a home in Southern California on her meager salary—all without any welfare or government health insurance plan.  Jane barely gets by, but she manages to do so, knowing her children will have a better life than she had.

Ever since the Affordable Care Act became active law this year, Jane is faced with a dilemma.  According to the Act’s individual mandate, all households are required to be on some kind of medical insurance plan, whether it’s private-sector insurance, Medicare/Medicaid, or ObamaCare.  The CHEAPEST plan which will cover her and her three children is ObamaCare, and that coverage sings the tune of $375 a month.

Jane has enough trouble making her $40 a month car insurance payment—she has a spotless driving record.  How in the world will she pull $375 out of a hat???  She can’t!  So now, with this utopian law imposed on her by the federal government, she has two choices: find a way to come up with $375 every month that she doesn’t make, or face the penalties.

Based on the situation, one of two things can happen.  If she’s lucky, Jane can go without unaffordable coverage and pay the $99 mandate “tax” this upcoming tax filing deadline, but she knows the fine gets bigger each year until the penalty becomes jail time.  If she's not lucky, she gets the "tax" plus a fine of 1% of her annual income (before the punishment progresses to jail time).

Basically speaking, Jane is financially screwed because of ObamaCare.  At this point, some left-leaners may be inclined to support the Affordable Care Act.  That the $375 a month will come in handy if she or one of the kids gets hospitalized, right?  Wrong. 

While there are always endless possibilities of bad things to come, we have no idea anything will happen.  Here’s what we do know: Jane and the kids live a remarkably healthy lifestyle.  They go for annual check-ups at the free clinic and are all in top shape.  The only times Jane has ever needed to go to the hospital were to give birth, and to this day Jane and the kids always play safely and manage all risks outside.

However, the “Affordable” Care Act is going to be quite unaffordable for Jane Doe, and it’ll hit her exceptionally hard.  This is why conservatives and libertarians oppose ObamaCare!

We also propose an alternative: repeal the interstate bans!  The health insurance market is made up entirely of cartels who can control prices because consumers are stuck buying what's in their state.  They can charge what they like because We the People were legislated into being fish in a barrel.  

Thanks to special interests, there are federal bans on buying a health care coverage plan from out of state, even if it's more affordable or better suited to the consumer's needs.  Thanks to the federal government threatening the states to withhold funding for Medicare and Medicaid, many states also have bans on buying health insurance across state lines.

The moment we repeal the bans and break the health insurance cartels, and the cartels are forced to return to the competitive market rather than dictate what the market is, the cost of health insurance will go down.  That way, Americans like my Jane Doe will be able to afford health insurance without Uncle Sam having anything to do with it.

Simon Rosenberg, New Democratic Network, on ObamaCare:
"I don't think it is going to work, and everyone is going to be really mad at Obama."

* * *

Obama/Sebelius photo by Dept. of HHS and in the public domain. E.R. photo courtesy of Theorry Geoffrey via CC BY-SA 3.0 license.  Rosenberg photo courtesy of "Meelar" and used via CC BY-SA 3.0 license.  Photos were obtained from Wikimedia Commons.

No comments:

Post a Comment