Jeff Duntemann's Contrapositive Diary Rotating Header Image

June 18th, 2012:

Juggling Three Trillion Eggs

June is likely to be a pretty thin month on Contra here for a number of reasons, most of them cooking down to the degree that my time and energy are committed to other things. I appreciate your emails, though. The boy is alright, if winded and maybe a little grouchy.

I knew that Obamacare was in trouble when its supporters stopped calling it “Obamacare.”

One of the law’s politer fans among my readership sent me a note earlier today, certain that the Supreme Court was going to hand down its ruling on the Affordable Care Act this afternoon. She knows I’m interested in the topic and that I have skin in the game. (I’m a freelancer and thus have to buy a policy on the individual market. It’s the largest single expense that Carol and I have.) We’ve discussed it before. She and I always used to call it “Obamacare,” without any suggestion that the term was some sort of epithet. No more. Well, there won’t be a decision today, but whatever you want to call the law itself, the issue’s been much on my mind.

I’m a skeptic of the ACA, mostly because of the risk of an adverse selection death spiral in the private insurance business. The bill enacts penalties that are trivial compared to the cost of either buying or providing coverage, which means that some people and small businesses are likely to pay the fines rather than comply, particularly since the bill forbids any kind of criminal sanctions for noncompliance. (Most of my earlier points may be found in this post.) The nature of the Supreme Court’s decision is critical. If the Court throws out the individual mandate while leaving the rest of it in force, the death spiral is almost inevitable. If the court throws out the entire bill, we’re back where we started. If the bill continues as passed, nobody knows what state the health insurance business will be come 2015.

“Affordable care”, alas, is a false promise, even if the entire bill survives intact. Revealingly, the bill’s key architect now says that the ACA will raise insurance premiums, especially for young people. My own premiums will likely rise by 19%. Given that Carol and I are square in the demographic that the insurance industry loves to hate, I guess I should be glad that we have coverage at all.

Even that isn’t a sure thing. I’m going to make a point here that I haven’t seen anyone else make in the years-long discussion: No matter what you intend to do, reforming a sector of the economy as large as health care guarantees that there will be a certain amount of blood in the streets. Health care expenditures now consume about 17% of GDP–three trillion dollars–a number that makes most American industries look like rounding errors. Any change that embraces that much turf and that much money will be disruptive down here in the waiting rooms. Any change. Insurance companies will reduce their presence in some areas. People will game the system. Prices of drugs and medical equipment will rise, triggering layoffs and outsourcing and trimming of insurance benefits. Doctors who are approaching retirement age may leave the field early rather than endure the paperwork and the fee limitations, leaving us with an even greater shortage of skilled practitioners. There will be mistakes and confusion on a truly epic scale, and a substantial number of people will slip through the cracks. Tumors will grow, conditions will fail to be diagnosed, and many will suffer.

This, furthermore, is best-case. If something goes wrong, well, the consequences are impossible to predict, beyond their being bad.

Do I have any better ideas? No. There are too many pathological conditions in play here: Nobody knows what their current health insurance costs. Everybody wants somebody else to pay for it. Human variability among individuals is broader than we’re willing to admit. We know far less about the workings of the human body than we claim to. Health care costs are hugely concentrated among relatively few individuals (I’ve heard 90/10 most often, but have not seen good numbers) so even policies with spectacularly high deductables will cost a great deal. Healthy people are too willing to ascribe their health to moral superiority, and bad health to bad behavior. (This is a phenomenon I’ve dubbed “Higgsism,” from the hero of Butler’s Erewhon.) Almost everyone is still repeating Ancel Keys’ scientific fraud, that carbs are good and fats are bad. The “death panels” meme cannot be un-coined.

Etc. The end result is that I consider universal health care an unsolvable problem, as most people understand the term “solvable.” (My definition of “solvable” does not include “imposing a solution by force on the public that the public does not want.”)

Whatever happens next week when the Supreme Court hands down its decision, we are in for a wild ride. You can’t juggle three trillion eggs without breaking some. Before you say that’s ok, imagine that one of those splats on the national carpet is you.

Pause before clicking that comments link, and recall that my tolerance for tribal hatred is close to zero. Note well that I did not use the words “liberal,” “conservative,” “Democrat,” or “Republican” in this post, nor any of various possible synonyms. If you intend to comment, I dare you to do the same.