Wednesday, October 31, 2012

Systole and Diastole of Election: Goverment  Spending Vs. Market Discipline
Once more, in the great systole and diastole of history, an age of freedom ended and an age of discipline began.
Will Durant (1885-1981 , Caesar and Christ (1944)
October 31, 2012 -   The election is 6 days away.   The central choice is  in health reform is between  more government spending vs. market discipline.
An October 27 New York Times editorial  “Barack Obama for Re-Election” sums up the case for more government spending.  
“Allowing children under 26 to stay on their parents’ policies; lower drug costs for people on Medicare who are heavy users of prescription drugs; free immunizations, mammograms and contraceptives; a ban on lifetime limits on insurance payments. Insurance companies cannot deny coverage to children with pre-existing conditions. Starting in 2014, insurers must accept all applicants. Once fully in effect, the new law would start to control health care costs. “
The main problems with line of reasoning is that since Obamacare” enactment in March 2010:
·         Health care premiums have soared by $2500 per family   
·         Businesses have postponed hiring because of uncertainties of Obamacare costs 

·         Estimates of its costs  have grown from $900 billion to $2.6 trillion

·          Employers have dropped up to 20 million from health coverage 

·         The ACA   remains unpopular with the public which favor its repeal by 54% to 39% 

·         And the GOP has further neutralized its appeal by  maintaining that Obama cut $716 billion from Medicare to fund Obamacare.
To complicate matters,  the public is schizophrenic  about Obamacare.    The public disfavors Obamacare as a whole.  According to Kaiser Health News,  there are those who like the law,  those who understand it, and those who want to repeal it.  A nationwide survey, conducted between 2010 and 2012, of 2000 people  indicated the following when participants  were given 18 statements about the law and asked to judge their correctness. For example,  80% knew the law allowed young people to stay on the parents’ policies under age 26 and that companies with more than 50 workers were required to offer coverage, but beyond those two provisions,  few participants were able to judge  any other provision with any certaintyas true or false.

Why this lack of understanding?   The first reason may be that reworking 1/6 of the complex health care economy is a matter of daunting complexity that effects different Americans in different ways.  A second reason may be that so far in the  nearly 3 years after its implementation, less than 30  million of our population of 310 million has so far been directly impacted by the Affordable Care Act.  A third reason may be that the two political parties spins its impacts differently.  A fourth reason,  as articulated by Jonathon Oberlander, an Obama supporter, in “Beyond Repeal – The Future of Health Reform,” New England Journal of Medicine, December 9, 2010, it that “The law is not a single program.  It is a collection of mandates, public insurance expansions, and regulation  that affect different groups of Americans  in different ways at different times.”

Tweet:  Health reform resembles the systole and diastole of the human heart, systole being more government spending,  diastole being market discipline.


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