America needs a change of direction domestically to cope with a dangerous and disorderly world.
The reports of Darrell Issa’s House Oversight and Government Reform Committee are a clinic on how government is really run. The latest on ObamaCare is no exception.
We see Chet Burrell, head of Maryland insurer CareFirst, emailing in alarm last April to White House aide Valerie Jarrett. The administration had just publicly stated its “risk corridor” plan would be revenue neutral—i.e., no extra taxpayer dollars would be available to cover insurer losses.
We see Mr. Burrell warning that sticking with this plan would mean politically “an unwelcome surprise,” namely premium hikes of 20% or more later this year as ObamaCare policies come up for renewal.
We see Ms. Jarrett emailing back in concern. We see her later assuring Mr. Burrell that insurers would get 80% of what they sought. After another program tweak in May, the figure would be closer to 100%.
Sure enough, this week came the fallout. Bob Laszewski, a policy wonk and former insurance executive whose bloggings are closely followed in the ObamaCare debate, writes that the administration has succeeded in temporarily suppressing incipient ObamaCare price hikes, contributing to an illusion of sustainability. He suggests that some insurers might even slash rates to “grab market share because they have nothing to lose with the now unlimited ObamaCare reinsurance program covering their losses.”
The non-surprise revealed here is that ObamaCare turns out to be just another subsidy program, throwing money at health care. In economics, you can’t subsidize everybody but we’re trying: 50 million Americans get help from Medicare, 65 million from Medicaid, nine million from the Department of Veterans Affairs, seven million (and counting) from ObamaCare, and a whopping 149 million from the giant tax handout for employer-provided health insurance.
Much of this money (which will total about $1.3 trillion in 2014) is shoveled out regardless of need, driving up prices and spurring production of services of dubious value. The spending is less effective at improving the nation’s health. An “Affordable Care Act” worth its title would have gotten us off this kamikaze mission. It didn’t.