What about single payer, Mr. Williams?
Herb Boyd | 10/17/2013, 2:45 p.m.
In his column last week, Armstrong Williams listed three basic arguments against the Affordable Care Act (ACA), commonly known as Obamacare, all of which cry out for further discussion because his conclusions, unsurprisingly, coincide incontrovertibly with conservative think tanks and websites.
First of all, he concludes that insurance premium benefits for healthy young Americans, who are mandated to be insured, will be less attractive than they were when originally advertised. Moreover, he argues, “Early empirical evidence supports the logic that the premiums for young people are significantly higher under Obamacare.”
Williams does not cite what empirical evidence he’s talking about, unless he’s relying on a study done by the right-leaning American Action Forum, and it’s much too early in the game to determine the success or failure of young people to sign up for insurance, which Williams appears to suggest they won’t, given the choice of paying the cheaper penalty than the higher monthly rate.
Nowhere does he mention subsidies, and this, as a recent Reuters survey reveals, becomes a critical point in changing the minds of many young people who were disinclined to be insured.
“When young adults who initially told Reuters they are unlikely to buy insurance learn for the first time about government subsidies for doing so, many rethought their position,” according to the survey. “People will be eligible for subsidies to defray the cost of premiums if their income is less than four times the official poverty level, or $45,960 for an individual and $94, 200 for a family of four.”
On the second major problem with Obamacare, Williams contends that the ACA imposes price controls on the medical system in order to reduce costs. After quickly dismissing such controls on housing, food and energy—and disparaging price controls in communist and socialist countries—he concludes by stating, “There is no reason to believe price controls will be more successful in the American medical industry.”
When it comes to price controls, so much depends on which economist is cited, but mainly the jury is still out on this factor. “We still don’t know what the impact of rate setting—price controls—would be on health care spending in the U.S.,” wrote professor Martin S. Gaynor on his blog at Compassionate Economics. “It’s possible that rate setting could prevent some of the most egregious practices … but that depends on what’s enacted and how it’s enforced. Whether rate setting would substantially slow the rate of growth of health care spending isn’t clear.”
But it begs the question of what alternatives do we have, though Williams seems to be convinced that price controls are not the answer. Williams also believes that Obamacare will have a negative impact on jobs and small businesses, particularly those with more than 50 employees. He might gain a better insight on this issue if he consults last week’s column by James Surowiecki in The New Yorker, in which he dismisses complaints about the employer mandate by pointing out that 96 percent of U.S. businesses have fewer than 50 employees and therefore are exempt from the measure.
Furthermore, Surowiecki notes that “more than 90 percent of companies with 50 or more employees already offer health coverage.” Unlike Williams, he states that small business exchanges should help level the “playing field for small companies, which have historically had to pay higher premiums than large firms.”
Incentives in terms of tax credits for small businesses—another aspect missing from Williams’ analysis—are also available under Obamacare and might encourage more small businesses to insure their employees. Clearly, all of these points can be argued, but single-payer insurance may be the real answer, and those fearful of the socialist boogeyman should take a good look at Medicare and Social Security—they both have been immensely serviceable, and even Williams should agree on this point.