It has taken me a while to figure out what I wanted to say about this post from May 6. Bill Gardner at The Incidental Economist wrote about how much Obamacare costs (and Romneycare in Mass.).
He discusses how data show that having insurance results in statistically significant lower mortality. That is, having insurance helps you to not die. I’m not sure how this could possibly be controversial. But that’s not the point. Mr. Gardner adds a bunch of further analysis about how much the cost is per life saved. The important point here, to me, is that this added cost is in insurance premiums only.
So, as a society, what Obamacare has really done, is caused us to pay the insurance companies way, way more than what is generally accepted as reasonable for the amount of benefit received.
My point is, this is a feature, not a bug. The insurance companies don’t really care if lives are saved, as they are certainly NOT in the business of saving lives. They just wanted the added business, and they got it. OH, and thanks to the way the law was written, the insurance they are delivering for amounts that are still prohibitively expense for a lot of people, is completely worthless for those people.
Gardner has a great finishing paragraph, though, as I am in total agreement that the employer tax subsidy has got to go:
Second, is it just to worry about the cost of health insurance only when we are considering insuring the poor? 55% of the US population had employer-based health insurance in 2011. Because this benefit isn’t taxed, this meant that 55% received a large subsidy for their insurance, including many affluent people. (And I’m sure Michael Cannon hates this, probably more than I do!) If you oppose the expansion of Medicaid, you should also favor the taxation of employee health benefits. Otherwise, you are arguing that we can afford to subsidize the health insurance of the rich, but that it costs too much to do it for the poor.