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Tuesday, May 24, 2022

Columns

Obama’s true legacy is the non-Affordable Care Act


The promise and failure of the Affordable Care Act, also known as Obamacare, is a plague that all Americans are forced to endure.

With rising costs, less coverage and plenty of red tape, the great solution to health care in the country has become a major problem. In theory, Obamacare was supposed to help with the cost of insurance.

Thanks to politicians doing what they do best, we, the insurance seekers, are much worse than we were in 2010.

Careless insurance

Six years ago, the Affordable Care Act — an insurance-based congressional bill that the president pushed through — came to be. It provides reasonably priced insurance and requires all Americans to have health insurance.

The idea behind the Affordable Care Act is that, upon requiring young and healthy Americans to buy insurance, they will offset the risk insurance companies face.

The problem is that the premiums and/or deductibles associated with coverage are too high for most to afford.

The incentive to buy this insurance comes from a penalty that each person must pay at the end of the year if they do not have coverage. The positive side is that they can apply and receive a subsidy if they cannot pay the bill. However, this is still not enough to cover the insurance costs and, as a result, young people are opting to pay the penalty that negates the process.

Government-run insurance violates proper business risk-taking in the insurance industry  and perverts the nature of insurance coverage. Guaranteeing coverage for those who have certain pre-existing conditions or critical illnesses is a bad investment.

The government can assume these risks because it is shouldered by taxpayers. However, these business practices are not feasible for private companies that need to generate a profit to continue operating.

The government should set a proper example for businesses and the country because it is in a position of influence. If they do not act with economic sense, we can’t expect businesses  and individuals to do so. We also can’t hold businesses accountable for their effects on the economy and not the government.

The lack of profitability, which all businesses operate under, is forcing insurance companies to pull out of Obamacare.  This leaves some counties with only one or no provider.

Intrusive influence

Common sense is a basic economic principle. If there is no profitability, there is no incentive to operate. More regulations equal to more costs and higher prices. If a company is not profitable, it will exit the market.

Moreover, it is hard to dispute the government’s own knowledge of the fundamentals of economics, considering that most politicians come from political backgrounds. To simplify the most fundamental law of economics, people and businesses respond to incentives.

If an operation is not profitable, the business will not participate in that operation. If it is cheaper to pay a penalty than premiums and deductibles, people will go for the former. It is likely that the Obama administration foresaw this result, and we, as a country, may now be on our way to a single-payer nationalized insurance.

The argument for or against a single-payer insurance is a lengthy one that only a dedicated column could cover with justice. The government either provides the only insurance coverage in the country or allows a business a natural monopoly with regulations on pricing.

All medical care is paid for by and through that insurance provider while taxpayers provide the finances. This allows cheap coverage but reduces the quality of medical care.

There is a reason why the U.S. has the best cancer treatment centers and other illnesses. It probably has something to do with our doctors, hospitals, researchers and insurance companies’ ability to charge competitive prices for coverage and treatment.

All in all, any stance the government takes on health care will have pros and cons — mostly because Congress has to go through so much negotiation to pass a bill. The best solution is for the government to get its hands out of the insurance pot and let the industry self-regulate.

Opinion columnist John Brucato is an economic senior and can be reached at [email protected]

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