Obamacare: The Work of the Anti-Entrepreneur

The term Obamacare isn’t simply a reference to the person responsible for the program. It’s also descriptive of the fundamental outlook of the program, i.e. a big government, top down solution of the kind you’d expect from a big government progressive like President Obama.

Monday, health insurance expert Bob Laszewski pondered what health reform might have been if it had been designed by entrepreneurs rather than big government progressives. He concludes that it would have looked very different. Entrepreneurs start from a position of serving people what they say they want and need. Progressives start from the position of dictating what people should have. The result of doing things the Obama-way is a lot of people who get something they don’t really want.

There was an article at Kaiser Health News, “One Texan Weighs Obamacare Options: High Deductible Vs. ‘Huge Fear.”
It describes a 43 year-old women who is healthy and spent only about
$1,500 for minor health care services last year. The best deal she found
on the federal health insurance exchange would cost her $178 a month
and would have a $5,000 deductible.

She hasn’t bought a policy yet.

She was quoted as saying, “I don’t smoke, I’m relatively healthy, so I
was pretty insulted when I saw this [the price]. I was extremely angry
actually. I felt hoodwinked by the insurance companies: ‘Oh, here’s this
wonderful insurance plan but by the way you need to come up with $6,000
out-of-pocket first before we pay anything.”

As Laszewski sees it “Obamacare architects put most of their emphasis on deciding for consumers that they should have a mandate rich health plan.” As that decision “drove the cost up, which in turn drove the deductibles up and narrowed the provider networks.” That’s how you wind up with Obamacare. The alternative would have started from a very different premise.

The entrepreneur might have gone to the woman in
Texas–really lots of people in her category– and asked what she
wanted. Then the entrepreneur would have recognized that the federal
government was willing to pay something toward the premium in the form
of the subsidy.

What kind of deductible would she consider reasonable? What kind of
premium would she be willing to pay for a plan with her preferred
deductible? What kind of first dollar benefits would she value? What
kind of catastrophic benefit would make sense?

Then, with her premium, the federal premium, the deductible she
considers reasonable, and the first dollar benefits she would value,
what kind of plan could we build for her–and the many healthy people
who think like her?

Obamacare didn’t start from that premise because big government progressives dictate, they don’t take dictation. Laszewski concludes “Until the people who run Obamacare start listening to the people who aren’t buying it, Obamacare won’t work.”

Actually, I’m not sure that’s true anymore.

Laszewski’s formulation assumes people have a choice and that by expressing those choices they could collectively hurt Obamacare in the long run. But that’s really old-fashioned marketplace thinking, i.e. people vote with their wallets and bad ideas fail for lack of funds. That’s not actually possible in this case.

Failure is not an option for Obamacare, not so long as the government can wring out your wallet until you agree to take their deal. The government may not be able to make you buy broccoli but it can tax everything else until broccoli looks like the only sensible alternative.