Obamacare

3 Big Differences—and 1 Awful Similarity—Between Obamacare and Medicare Part D

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Keith Speights at The Motley Fool outlines "3 Huge Differences Between the Medicare Part D and Obamacare Launches." As most of us have been lectured by admin officials and supporters of the president's health plan, don't you know that the prescription drug plan rolled out by the Bush administration in the mid-Aughts also had a terrible launch? And now, would you believe it, the seniors who get nearly free drugs from Part D love the program!

It sure did, but Speights stresses that the sheer magnitude of the technical difficulties, the centrality of the website to the program's success, and the incentives for the targeted audience to sign up are very different this time around. Read the whole article for details, but on that last point:

Medicare Part D launched with several incentives for seniors to enroll: new benefits they didn't have before, low premiums, and subsidies for individuals with low incomes. There was even a penalty for enrolling late—although none for declining to enroll.

Similar incentives are also present with Obamacare. A big difference, though, is that many individuals could find it more financially attractive to forgo insurance — especially in the first year or two. And because the health-reform legislation didn't give the IRS any real teeth to go after those who don't want to pay the penalties, the "stick" of Obamacare probably won't look too threatening to some Americans not enticed by the "carrot" of health insurance.

Let me add one striking—and awful -similarity to the two programs: They are both unnecessary and expensive. 

There's no question that recipients of drugs under Medicare Part D love the program. Something like nine out of 10 seniors say so. Why wouldn't they? They got $62 billion of free and/or reduced-price drugs under the program in 2010 and that number will bounce up to $150 billion annually by 2019! Billion! None of which was paid for by any sort of dedicated revenue stream at the time of the legislation's passage. You, me, and our great-grandkids are the stream! No wonder it feels like it's raining!

And before anyone starts yammering on about Medicare Part D being the only thing standing between seniors choosing between Purina Cat Chow and a generic statin (as folks such as Al Gore did back in the 2000 campaign), remember that when the plan was being discussed, retirees paid on average a total of 3.2 percent of their annual income on drugs. That was less than they shelled out on entertainment.

Rather than, I don't know, creating a smaller, targeted plan that might cover low-income/low-wealth seniors and other poor people regardless of age, Republicans and Democrats came up with a sop to one of the most powerful and wealthy voting blocs in the country. Many Democrats voted against the prescription drug plan because it wasn't paid for, which at least was to their credit at the time.

But it's an appalling spectacle to see both parties now touting a giveaway that wasn't necessary in the first place and whose cost will more than double in less than a decade as some sort of model of anything except stupidity and wastefulness in action.

Which brings us to Obamacare, whose cost estimate for its first full decade doubled even before this awful Healtcare.gov apparition appeared. As Peter Suderman noted in 2012, the Congressional Budget Office figures that instead of boasting a gross operating cost of just (!) $938 billion for its first decade, the tab for the first decade of actual coverage is looking closer to $1.76 trillion. Who would have thought that a government health care plan might have been more expensive than originally claimed? Only anyone who actually tracks what past reforms ended up costing.

Then there's Obamacare's great failure when it comes to insuring the uninsured (let's leave aside the question of whether insurance, spending on health care, and actual health outcomes are clearly related, which they are not). Of the 50 million folks that don't have insurance, Obamacare will, under its most optimistic projections cover an additional 25 million over the next decade. And it will leave 31 million uninsured over the same time frame.

When it comes to universal coverage, then, Obamacare is an-out-of-the-box failure that needs to go back into the box and stay there. Then we might start a conversation about what insurance is actually to supposed to do and build a consensus around how best to design a law that might actually work and doesn't just massively increase government's power and spending to no clear end.

15-second video, starring Barack Obama, Kathleen Sebelius, and Mr. T: Time to bring in the A-Team? It's always time to bring in The A-Team.

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  1. And now, would you believe it, the seniors who get nearly free drugs from Part D love the program!

    Willie Sutton sez: “Open a savings account, today!”

  2. What I get from the picture is that the Democrats ruined health insurance so Sebelius and Pelosi could play out their granny Mandingo fantasies.

    1. It’s too early in the week for such disturbing images. Seriously. *barf*

    2. Yeah, thanks for that…I am going to go find some muratic acid to drip into my ear, hoping some runs into my brain and scours that image from it.

  3. Then we might start a conversation about what insurance is actually to supposed to do

    Good luck.

    1. How about a conversation on *race*, then?

      Seriously, “(health) insurance” was transmogrified some time ago.

  4. I’ve been seeing iterations of this retarded meme on various boards. Whenever I ask these knobs if the left is no longer concerned about Medicare Part D adding to the deficit, just because it’s popular, they disappear faster than a fart in a hurricane.

  5. From my Nick Kristoff link yesterday:

    Streeter had health insurance for decades, but beginning in 2008 his employer no longer offered it as an option.

    But a system in which the individual has ownership of his insurance coverage (and accrued equity) wouldn’t make any sense!

    1. I don’t get how a guy who balked at paying a few hundred bucks to find out why he was bleeding out of his ass would supposedly sign up for insurance that costs more than that every month.

  6. the Democrats ruined health insurance so Sebelius and Pelosi could play out their granny Mandingo fantasies.

    Double penetration?

    1. Wow. I can’t believe that’s, um, coming from you, not SF!

  7. One of the important differences between the ObamaCare exchange failures and Bush’s Medicare Part D is that the Medicare Part D launch problems weren’t a harbinger of systemic failures to come in the program.

    As important as the exchanges are to ObamaCare, these failures at launch are just a taste of what we should expect once the rest of ObamaCare is up and running. The gross incompetence on display in the exchange roll out is really just a distraction…

    People aren’t losing their coverage or being forced to pay a lot more for less coverage because of the failure of the exchanges to roll out–and that’s a much bigger problem for ObamaCare than the exchange failures anyway.

    This isn’t just stuff I’m reading about in the news. I’ve had a bunch of friends and family tell me they can’t keep their existing coverage. I know someone who’s recovering from breast cancer, gets her coverage through her employer, and has just been told she has to pick a new plan.

    That has nothing to do with the failure of the exchanges. That’s about the fundamentals of ObamaCare itself.

    Let’s not get distracted.

    1. these failures at launch are just a taste of what we should expect once the rest of ObamaCare is up and running

      “We’re building the airplane as we fly it!”

      1. If I can see it, then I can do it
        If I just believe it, there’s nothing to it

        I believe I can fly

        http://www.youtube.com/watch?v=BYGSC9wiOYE

        They’re living in a dream world–a world without consequences. But reality is asserting itself, just like it always does.

      2. “We’re building the airplane as we fly it!”

        You didn’t build that!

  8. “build a consensus around how best to design a law that might actually work and doesn’t just massively increase government’s power and spending to no clear end.”

    Nick, you don’t get it. Massively increasing the government’s power and spending IS the end.

    1. Exactly this. For the true believers, the “debate” over the ACA is a matter of ideal deckchair configuration, not whether we should turn the boat around or not. It’s one of those bellwethers you see in politics.

      If you think the ACA is a good idea, you probably think that health insurance IS health care, and that it’s one of those things that are “too important” to leave to the private sector because everyone has a positive right to it. So the health exchange debacle isn’t a harbinger of doom, it’s just another challenge standing between America and “universal coverage”. Are people *losing* coverage? Are rates actually rising instead of falling? Well, sure, but that just means that the law needs to be tweaked. It probably means that government needs to step in further and tweak regulations and subsidies until it works like it says in the brochure.

      Basically, if you believe that your house keeps catching on fire because it’s the wrong color, not because it’s next to a volcano, every flame-up is just going to send you to Home Depot looking for a more fire-retardant shade.

      1. I love everything about this post.

  9. People aren’t losing their coverage or being forced to pay a lot more for less coverage because of the failure of the exchanges to roll out–and that’s a much bigger problem for ObamaCare than the exchange failures anyway.

    That’s just a meaningless distraction. Some guy (one of the “primary architects” of Romneycare, btw) was on my teevee this morning saying a few million people getting steamrollered for the good of the Many is a small price to pay to keep his Grand Vision alive.

    And, of course, that wasn’t really insurance, anyway. So STFU and compliment the Emperor on his fabulous new wardrobe!

    1. This was linked on Instapundit:

      You Also Can’t Keep Your Doctor

      I had great cancer doctors and health insurance.My plan was cancelled. Now I worry how long I’ll live.

    2. that wasn’t really insurance, anyway

      They keep saying this, but from what I understand (and please correct me if I’m wrong) the plans that are being canceled are the relatively high deductible, minimum benefit, but low premium catastrophic plans. That is the exact definition of a true insurance plan. Their replacing it with something that is NOT insurance and then claiming to do the exact opposite. No?

      1. Yes, that’s correct. Obamacare “grandfathers out” high deductible, minimum benefit, but low premium catastrophic plans.

  10. Their replacing it with something that is NOT insurance and then claiming to do the exact opposite. No?

    The winners get to (re)write the dictionary.

    1. Elections have consequences.

  11. A big difference, though, is that many individuals could find it more financially attractive to forgo insurance — especially in the first year or two.

    And that first year or two of low enrollment should be time for the death spiral to set in, so premiums are going to up, up, up on the HIE plans, meaning the economic calculus (penaltax v premium) won’t really change even as the penaltax goes up.

    And this would all be true even if the damn website worked. The website debacle may make the death spiral quicker and steeper at the margins by keeping a handful of young invincibles out who would otherwise be in, but OCare’s real problem isn’t an unfixable website. Its OCare itself.

    1. Yes, but the debacle with the website is so undeniably bad that it keeps the media from sweeping it under the carpet.

      Otherwise this whole argument would go something like this:

      Opponent: Obamacare destroys real insurance and will never cover it’s economic costs.

      Proponent: Look how many millions have already enrolled. The program is a success, let’s Move On!

  12. Well, according to Tom Toles’ editorial cartoon this morning, the problem is just the GOP griping about ‘fake scandals’. If they didn’t keep griping, why, I guess everything would just be fine.
    What school offers a major in Ignorance? I’m sure he was graduated Cum Laude. You can’t ignore that train wreck without careful study.

  13. What school offers a major in Ignorance? I’m sure he was graduated Cum Laude. You can’t ignore that train wreck without careful study.

    Ignorance which is not merely willful, but belligerent.

    1. The proud ignorance of a high priest confronting impertinent heretics.

  14. “The resistance to Obamacare reminds me of the resistance to desegregation.”

    /I actually heard this from someone.

    1. As in, both are likely to have second or third order effects that are disastrous for their intended beneficiaries?

    2. Eric Bana|11.4.13 @ 11:17AM|#
      “The resistance to Obamacare reminds me of the resistance to desegregation.”
      /I actually heard this from someone.

      To those who say the electorate will soon turn on Obo, I suggest a careful study of the above.
      There is no ‘peak excuses’; they are infinite.

    3. The defense of Obamacare reminds me of the defense of the Fugitive Slave Act. Another attempt by the Democrats to guarantee a universal right.

  15. my co-worker’s sister-in-law makes hourly on the laptop. She has been out of work for 5 months but last month her payment was just working on the laptop for a few hours. pop over to this web-site…….. http://www.works23.com

  16. I totally agree with your conclusions, but I fear we’ve passed the point of no return on this leviathan. What we really need is to go back to WWII and stop the law that created our current employer-based system from being enacted. I always find it ironic that the reason we have the debacle we have now was because of another attempt at controlling prices… only that time it was controlling how much money a person could make! How is it that most people still buy into Keynsian economics?!?!?! So frustrating.

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