November 10, 2014

An odd, unspoken truth about Obamacare

Sam Smith - Long on the Review's  to do list has been our concern that Obamacare has become hopelessly muddled with long standing Medicaid (born in the 1960s) thanks to its expansion under the new measure. Now the Heritage Foundation has come up with some numbers:

Health insurance enrollment data show that the number of Americans with private health insurance coverage increased by a bit less than 2.5 million in the first half of 2014. While enrollment in individual market coverage grew by almost 6.3 million, 61 percent of that gain was offset by a reduction of nearly 3.8 million individuals with employer-sponsored coverage. During the same period, Medicaid enrollment increased by almost 6.1 million—principally as a result of Obamacare expanding eligibility to able-bodied, working-age adults. Consequently, 71 percent of the combined increase in health insurance coverage during the first half of 2014 was attributable to 25 states and the District of Columbia adopting the Obamacare Medicaid expansion. 

While most of the attention has focused on the new health insurance exchanges, the data indicate that a significant share of exchange enrollments were likely the result of a substitution effect—meaning that most of those who enrolled in new coverage through the exchanges during the open enrollment period already had coverage through an individual-market or employer-group plan. Given that increased enrollment in Medicaid accounted for 71 percent of the net growth in health insurance coverage during the first half of 2014, the inescapable conclusion is that, at least when it comes to covering the uninsured, Obamacare so far is mainly a simple expansion of Medicaid.  

While 23 states have chosen not to spend extra money on Medicaid, the fact that the rest are actually producing the greatest benefits under the Obamacare bill points out a key problem with the whole measure: Most of the controversy stems from the Obama administration's manipulation of private insurance and its requirements, an effort that has produced minor effect compared with simply expanding a Great Society program. Because the Obama data and process drones wanted to show how clever they were, they severely damaged their own bill.

The Review had urged the expansion of Medicare (such as including those over 55 and/or young children) as an alternative. That would have taken about 20-25% of the nation's health costs out of the private insurance market using a program that most Americans understood and liked.

One of the problems with Medicare and other social benefits is that the right, supported by a stunningly uncritical media, has given the exagerrated impression to many that these programs are running out of money, ignoring, for example, the fact that Medicare could be supplemented by budgets and not trust funds, just like, say, the Pentagon is.

Yet even with this negative propaganda,  in 2010 Gallup asked a question based on this misinterpretation: If the cost of major entitlement programs does create major economic problems for the U.S., do you think the government should or should cut benefits?

56% of Americans said no.

In short, Obamacare dug its own hole.

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