Richard Epstein on the “Obamacare Quagmire”

Writing at the Hoover Institution’s Defining Ideas journal, New York University law professor Richard Epstein explains why the Patient Protection and Affordable Care Act “will hurt the very people it’s supposed to help.” He writes:

Now that the Supreme Court has held President Obama’s Patient Protection and Affordable Care Act (ACA) constitutional, mounting evidence suggests that the statute’s most ardent defenders may well come to rue the day. During the legal struggles over the ACA, its defenders both on and off the Supreme Court took for granted the proposition that the law would deliver on its major promise, which was to extend affordable coverage to the over 47 million people who now lack healthcare insurance, without disrupting the protection that others currently enjoy.

Unfortunately, these bold pronouncements failed to take into account the old and powerful economic law of unintended consequences. Sometimes these are positive, which is why the selfish actions of ordinary individuals in competitive markets prove socially beneficial. Adam Smith said that each individual “is led by an invisible hand to promote an end which was no part of his intention.” But those unintended consequences often turn bad in connection with the many forms of government regulation that limit the scope of contractual freedom, which the ACA does in a big way.

The result may turn into an Obamacare quagmire. Public officials, at both the federal and the state level, are grappling with the Herculean task of implementing the law. Its internal complexity and flawed design make it a program that was built to fail.

Read the whole thing here.

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  • Fist of Etiquette||

    ...mounting evidence suggests that the statute’s most ardent defenders may well come to rue the day.

    Good luck getting any of them to admit it.

  • John||

    A few lost elections will get them too. I said this when it passed. Since they passed it without a single Republican vote, they own the entire health care system now.

  • Hyperion||

    I doubt it. Soon more than half of the country will be totally dependent on the government, and they will all vote Democrat. The most insane people in the country, the progressives, own the Democrats. We are screwed, this will not turn out well, and it will get very ugly.

  • John||

    But most people were happy with their health care. Socialist healthcare was popular in Europe because people had never had health care before then. America is different. When the middle class loses their current insurance and see the quality of their care go down and costs go up, they are going to blame the Democrats. Passing Obamacare was political suicide. And it is slowly dawning on them.

    They already have lost the always reliable Republicans want to kill grandma card. Every time they try to play that on Ryan someone points out that Obamacare cut $700 billion from medicare. It is only going to get worse from here.

    Now whether the Republicans will fix it, is a different matter. But Obamacare is a political disaster for the Dems.

  • Adam330||

    How will quality go down and costs up for the middle class? The ACA requires coverage that is better than what many employers of the middle class offered. And there are subsidies for the middle class that will hide the true cost.

    The more likely scenario is that the subsidies will be exponentially more expensive than originally estimated, and more people will be the exchanges than estimated, but people will really like it because its cheaper (to them) and better than the employer plans. That will explode the budget deficit, and lead the Democrats to blame the 'rich' for not paying their 'fair share.'

  • John||

    Because Obamacare is going to reduce the supply of doctors and put a lot of people who were on the edges of the system before into the system now. Supply will go down and demand will go up. Further, the exchanges will not be as good as the healthcare people were getting from their work. Once employers start dropping insurance, people are going to be pissed.

    Lastly, when the government cuts its costs, which it will have to, it will do so by rationing by time and access. So people who have no problems seeing a doctor now will be waiting in long lines in the future.

  • Adam330||

    How is going to reduce the supply of doctors? There will certainly be more people in the insurance system, but a lot of these people were getting healthcare before, they just didn't have insurance. Maybe this will increase the burden on the healthcare system slightly, but most middle class people don't deal with that system on a regular basis- it's only in the rare case they get really sick.

    Why would people be pissed if their employer dropped insurance, if there was an exchange where they could get better insurance for cheaper?

  • John||

    How is going to reduce the supply of doctors?

    Because it is going to control their pay and tons of doctors are going to leave the field. There is also a bunch of incentives in there to get doctors out of specialties. Fewer specialists in the future.

  • Rasilio||

    In addition to all the ways others have mentioned it will reduce the supply of doctors because a very large percentage of doctors are wealthy and do not need to continue working, further if they did continue working their skills literally allow them to work anywhere in the world. Obamacare is going to flood them with new patients who have limited ability to pay and the government reimbursment rates will be so low that they won't be making any money anyway then on top of that the medical coding rules combined with mandated efficiencies (aka government telling them how to practice medicine and treat their patients) will quickly erode any sense of job satisfaction they may have had leading to a very large number of doctors, especially those who have the means to either retire early or leave the country for somewhere else with lighter regulations.

  • Hyperion||

    We already know how it will play out, since other countries have been doing it for some time now. Costs may stabilize, but there will be rationing and choices will diminish greatly. It is not a good thing in any way. Innovation in medical technology will probably suffer also. Technology 30 years from now will probably look a lot like technology today, and it will not be used much because of controlling cost. The cost of the massive bureaucracy to run this thing will assure that.

  • Adam330||

    Likely. But technology failing to advance, some rationing, diminished choices, are things that people generally won't notice.

    I think the dynamic will be different in the US than in many other countries, particularly ones that have cut out the private sector almost entirely. Insurance companies and docs won't sit on their hands if the government tries to cut payments- they've provent that in medicare. The federal government has a seeming limitless ability to borrow (until it suddenly doesn't), so the easy answer for federal politicians will be to avoid much in the way of cuts. They also won't want to cut coverage because that's just like killing people (see e.g. medicare). The path of least resistance is to continue to borrow huge amounts of money to fund high payments to docs and insurance companies and maintain high levels of coverage, until we wake up one day and no one is loaning us money.

  • ||

    Lastly, when the government cuts its costs, which it will have to, it will do so by rationing by time and access. So people who have no problems seeing a doctor now will be waiting in long lines in the future.

    Finally. You know, I was saying to my friend just the other day, "It's too bad that my driver's license is good for 8 years because I really miss the experience of wasting an entire day at the DMV." Now I can look forward to experiencing DMV quality service every time see my physician.

  • Hyperion||

    Just take a look at most employees that work in government offices, like the post office, or the DMV. Do they look happy to you? Would you go to school for 8 years so that you could be the equivalent of one of those people?

  • NoVAHockey||

    "How is going to reduce the supply of doctors?"

    The average GP is nearing retirement age. We're not training them fast enough and ACA does nothing to fix that.

    And if even a few docs decide to opt out of Medicare, it won't take long to spiral out of control. Typical case load is about 230 medicare patients. so you get 5 docs who leave, that's more than 1000 patients that need to find a new one. and those new ones aren't likely to take medicare. it will get ugly fast.

  • Hyperion||

    The 27 year old college graduates will blame the Dems also, when they have to buy expensives health care coverage that they don't need or want, instead of that new BMW. Right now, most people that age think it will be free. Just ask a few of them. But soon they will find out the truth. But then the Dems will just try to pass an amendment to allow them to stay on their parent's health plan until 40, or something that ridiculous.

    But again, I go back to the one thing that will allow this craziness to continue. The number of voters totally dependant on government will be in the majority. So what we are actually looking at here is economic destruction, and probably mass unrest. That will result in a military style dictatorship or some type of police state with martial law. I do not see a bright future for the USA, in the short term anyway. Maybe freedom will make a return one day, but probably not in our lifetime.

  • John||

    I don't think so. We will never have a military style dictatorship because the military will never cross that line. Too ingrained in them not to. Maybe some day, but not in my lifetime. What we will get is the death of the current big government and its replacement with something much smaller. The government will just go broke and stop doing things.

    The American people are not the Greeks. And even if they were, the Greek riots have been pretty pathetic and far short of a real insurrection.

  • Hyperion||

    Why do you think Obama is making such a push to get gays and lesbians, and immigrants into the armed services? Think about it.

  • ||

    Perhaps I'm wrong, but I don't see how lifting the ban on homosexuals in the military is the same as pushing them into service.

  • wareagle||

    America is different.

    which brings us back to the phrase everyone seems to have forgotten from '08: fundamentally transform America. When you are to be the leader of the nation with the world's largest economy, most powerful military, arguably the greatest range of personal freedoms, how can a fundamental transformation lead to anything but a bad outcome?

    This isn't about Obama or the Dems. It's about a group of people finally presented with the opportunity to neuter the country in lots of ways, to make it kinda like Denmark but with more green space.

  • Registration At Last!||

    Medicare for all, then.

  • ||

    And ponies, dont forget ponies! Ponies for all! Oh! Oh! and rainbows!

  • Hyperion||

    I hate people who own ponies.

  • ||

    I hate people who own ponies.

    You've obviously never tried one... they're delicious.

  • Hyperion||

    Government rations for all. It is the progressive way. We must all be equal, except for our betters, the ruling elite class.

  • Brutus||

    What a great idea: Take the one program that has us on a bullet train to insolvency and make it - what? - five or six times bigger? All aboard the rocket sled to insolvency!

  • ||

    "....the very people it’s supposed to help.”

    Did/Does anyone actually believe that Obamacare is supposed to help anyone? Well ok, it surely was designed and implemented to help the political class as the biggest power-grab in history, but I am not sure that is what was meant by 'help people'.

  • ||

    Well...on further thought, it will hurt the people it was supposed to help. Ironically the political class has taken a bite of power too big for them to chew. May they all choke on it and rot in hell. Over and over. Forever.

  • wareagle||

    "...it will hurt the people it was supposed to help."

    yup, and it is increasingly difficult to deny that this is what most large govt programs are intended to do. If the problem that a program purportedly intends to solve actually is solved, that's a lot of payroll with nothing do pretend to work on.

  • Hyperion||

    You just answered your own question. Yes, it was designed to help the Democrats push the totally dependant population into the majority so that the progessive Dems can stay in power forever.

  • SugarFree||

    I think the "Obamacare is a cynical powergrab" is much more comforting than the alternative. Knowing that the people forcing you to do things are evil is one thing; knowing that they are evil morons is something far worse.

  • John||

    They are evil morons Sugar Free.

  • SugarFree||

    That's what I'm getting at. Thinking they are evil geniuses is a comforting myth.

  • Hyperion||

    The one thing that is certain, is that they are evil. They want their fair share of what they can plunder, knowing full well(some of them anyway) that they are dooming us to economic ruin and total loss of freedom. They just figure that their positions of power will keep them and their families safe and secure.

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