Getting Rich off Obamacare?


Scott Richert has a good article up at Chronicles in which he argues that the healthcare bill isn't quite the "socialism" that its supporters and detractors imagine it to be.  Depending on your preference, Obamacare will either result in an Atlas Shrugged-like nightmare in which bureaucrats will immiserate entrepreneurs and the public alike or become an efficiently-run public service that will finally cleanse greed and selfishness from the system. Both sides are wrong, says Richert: the fat cats who enriched themselves through the old system will enrich themselves through the new one. 

That cry you heard when the 216th vote was cast in favor of President Obama's "healthcare reform" was the sound of insurance executives rejoicing before lighting their cigars with $1,000 bills. Just as Big Pharma was the chief beneficiary of President Bush's Medicare prescription coverage bill, so Big Insurance has Barack Obama to thank for their coming years of plenty. 

As awful as a single-payer national healthcare system would likely be, the United States just adopted something worse. The only consolation that those of us who oppose both Big Government and Big Insurance can look forward to is the coming consternation of those liberals who sincerely believe that Obamacare is an attack on the "criminal" and "evil" insurance companies and the first step toward a single-payer system. It won't take long for them to realize that it is, rather, a major step backward from what they truly desire.

A single-payer system could only come at the expense of the insurance companies, and they are never going to give up the great gift that Obama and his colleagues have handed them, on a silver platter lined with 40-50 million new insurance premiums. The crumbs from their table that will fall into the campaign coffers of both parties will be enough to make sure that any additional healthcare reform will never threaten to put out the insurance executives' cigars.

Richert makes a lot of good points, but I'm afraid he overstates his case.

First off, a single-payer system would be worse, much worse. Over the course of the 20th century, governments have come to recognize that they're not good at actually delivering services and running corporations and that it's a better idea to try to achieve a "more just society" by manipulating markets and finances: hence Fannie and Freddie and not government housing, bailouts of the automakers without literally turning them into "Government Motors," etc. As I wrote yesterday, given the demographic state of modern America, a "public option" would not have looked like the NHS or a facility in Sweden -- more like Martin Luther King Harbor Hospital or something out of the SAW film franchise. And as much as I hate the bill, we should be grateful that some semblances of private enterprise will remain in our healthcare system.

Secondly, mandating that everyone buy insurance will certainly be good for the insurance companies' revenues, but this boon will be weakened, if not negated, by the fact that they will be forced to cover everyone. Indeed, one can no longer call this "insurance," which is about a company taking on the risk of its clients and betting that less of them will become sick or injured than stay healthy. If everyone gets to be in the pool -- and prices are regulated downwards -- then I don't really see how any company could possibly make a profit. These firms won't be allowed to go bankrupt, of course, but will remain on the scene, much like Fannie and Freddie, as perennially bailed-out, public-private cyborgs with highly regulated prices and, pity the fat cats, highly regulated salaries. The insurance companies undoubtedly spent millions attempting to kill the "public option," but I don't think they should look forward to Obamacare with the glee Richert ascribes to them. 

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I also, alas, don't think we should get our hopes up for the "repeal" that National Review and Bill Kristol are calling for. In November, Republicans will certainly run on repealing Obamacare (which is what NR and Kristol are ultimately after), but there's little chance they could gain the seats to pull off a repeal, or would have the guts to do it if they could.

Obamacare benefits don't actually take effect until after the 2012 election (the new taxes start in six months!), so by the time Americans get to experience the ill-effects of the new system, the impetus for repeal will have been lost. Historically speaking, prospects seem even dimmer. In England, after Labour had pushed through massive new programs in the aftermath of the Second World War, including the National Health Service, the Conservatives regained power in 1951 ... and essentially consolidated the past government's advances. 

Let's put it this way. I think there's a better chance of a massive default on government debt, or even a hyperinflationary collapse, then there is of a "repeal" of any major piece of legislation. But then I think those horrifying first two scenarios are actually quite likely.            


So, who benefits from Obamacare? (For someone must.) My sense is that the currently uninsured underclass will. There is little doubt (in my mind, at least) that the Democrats' beloved constituency will be "given access," as small businesses collapse and the middle class all but disappears.

Also, repeal is highly unlikely, but a Supreme Court challenge is not, and though Obamacare probably won't get stricken down, it would be good to see Alito, Roberts, Thomas, and Scalia state in writing that it's un-Constitutional. "Nullification," a hot word these days, might get tossed around in places like Texas, but unless a governor is willing to "go all the way" (i.e. secede), I don't think that will happen either.