Here at Internet Scofflaw, I usually refer to Obamacare as the health care nationalization act, because that’s what it accomplishes. Sure, there will continue to be “private” “insurance” firms, but they won’t be insurance, nor will they really be private. The government will dictate what policies they write, for whom, and at what price. The government will also dictate how much they pay out, require individuals to buy their services, and pay for much of the cost with taxpayer funds.
Still, you may think that we’re better off under a regime in which health care is run by public utilities than a single-payer regime, in which the government makes all your health care decisions directly. Well, be comforted no longer. Obamacare places us on a glide path to single payer, and it won’t be averted without repealing the provision on pre-existing conditions.
It is well-known — and universally acknowledged by the law’s advocates — that the prohibition on declining coverage for pre-existing conditions depends on the individual mandate. Without the individual mandate, people will wait until they get sick to buy “insurance”. (Of course, a plan that covers things that have already happened isn’t insurance at all.) That would quickly put all the health insurers out of business. The individual mandate addresses the problem by forcing people to enter the system when they are not yet sick.
That is how the system is supposed to work, but it fails to account for an important problem (actually many, but we’ll focus here on just one). The quality of health care is not uniform. The individual mandate does not require individuals to buy good insurance, so they will buy the minimum coverage that will satisfy the mandate. Something very similar happens in the auto insurance market, in which many people buy the minimum coverage to satisfy state requirements.
Consumers cannot upgrade their auto insurance after they have an accident, but under Obamacare, consumers can upgrade their health insurance once they get sick. Thus, high-quality health insurance will be bought primarily by those who are already sick. This is inarguable; it is the direct application of an observation that Obamacare’s advocates have already conceded.
Thus high-quality health insurance will become a money-losing business and it will quickly disappear. (Remember, by high-quality I mean anything that is more expensive than the minimum allowed.) All of us will be forced into lousy health coverage, because nothing else will exist.
What happens next? Well, people won’t like their new lousy health coverage, and they will demand that government make it better. It could do so by repealing the pre-existing condition rule, but it is much more likely to increase regulation instead. The new health care bill (which will once again be called “reform”) will try to drive up health care quality. It won’t work, but the red tape will drive most providers out of business. Those that survive will be de facto government agencies, with government regulators calling the shots and taxpayers footing the bill.
At that point, the system will be single payer in all but name. At some point the government might officially take everything over, but it probably won’t bother. The executives of the “private companies” that provide health care will be well compensated and politically connected. Those positions will be valuable as sinecures for leftists, just as Fannie Mae and Freddie Mac function today, so they will be preserved as an extra layer of inefficiency on top of a single-payer system.