Richard Epstein At The Hoover Institution: ‘The Obamacare Train Wreck’

Full piece here.

Click through for analysis on specific provisions of the ACA:

‘Republicans are howling to repeal and defund Obamacare. As a policy matter, that is surely the correct move. But as a political matter, the prompt repeal of Obamacare is just not going to happen over the uncompromising opposition of a Democratic president and a Democratic Senate. So, if the first-best solution is not possible, more modest fixes for Obamacare are in order until Republicans start winning elections’

Epstein looks pretty prescient on what the law’s specific challenges are and how it wasn’t likely to succeed, certainly not by now, but perhaps never in some of its aims:

‘As I have noted before, there is only one type of reform that can make progress in meeting the three goals of a sensible health care system: cost reduction, quality improvements, and public access. That reform requires massive deregulation of the many market impediments that are already in place. Lower the costs, drop the excessive mandates, and thin out administrative costs, and people will flock back to the system voluntarily’

Sounds reasonable to this blog.  There are solutions out there to rising health-care costs.

These aren’t just computer glitches, but rather deep and serious challenges that likely won’t be fixed anytime soon.  I’m reminded of Solyndra, which showed an almost childlike understanding of the private sector and childlike faith in political coalitions guided by rather Left-Of-Center idealism to throw taxpayer money at the industries which were desired to succeed.  Long on speeches, short on delivery.  Lots of politics.

Tech start-ups which actually do succeed (and most don’t) throw a lot of talent and energy balls-to-the-wall to try and solve specific problems to make some process that people engage in now simpler and easier.   These problems can be very complex and challenge the best minds who are under intense deadlines to use their capital well.  There are no guarantees in this high-risk, high-reward activity which can be the work of a lifetime amidst intense competition.  The path is littered with near misses and spectacular failures.

It’s not as easy as it looks.

So, how much politics was involved here?  Avik Roy makes the case a little more starkly:

‘The answer is that Obamacare wasn’t designed to help healthy people with average incomes get health insurance. It was designed to force those people to pay more for coverage, in order to subsidize insurance for people with incomes near the poverty line, and those with chronic or costly medical conditions.’

You won’t just be paying more for your own insurance, you will be forced to buy other people’s insurance, induced into then kept by force in a system of political wrangling where politicians and certain favored interests and coalitions control the money supply much more than they do now.

Related On This Site:  Avik Roy At Forbes: ‘Democrats’ New Argument: It’s A Good Thing That Obamacare Doubles Individual Health Insurance Premiums’Megan McArdle At Bloomberg: ‘Health-Care Costs Are Driven By Technology, Not Presidents’

Richard Epstein At The Hoover Institution: ‘The Obamacare Quaqmire’

Richard Epstein At The Hoover Institution: ‘Watching Obamacare Unravel’

From The New England Journal Of Medicine Via CATO: ‘The Constitutionality of the Individual Mandate’From If-Then Knots: Health Care Is Not A Right…But Then Neither Is Property?… From The New Yorker: Atul Gawande On Health Care-”The Cost Conundrum”Sally Pipes At Forbes: ‘A Plan That Leads Health Care To Nowhere’

5 thoughts on “Richard Epstein At The Hoover Institution: ‘The Obamacare Train Wreck’

  1. Chris the problem is so bad that it is unbelievable. All the ACA did is throw more money at the inefficient health care system we have while setting up a big wealth redistribution machine. My guess is about 20% of the population will see some improvement in their situation because of the transfer payments. Most of the rest will experience higher costs and longer waits to get medical services and about 10% will see their income taxes increase. The medical device tax makes no sense at all.

  2. Ron,

    Well said. We’ll see about the 20% as there will be winners and losers. We keep many of the old system’s failures with a large, bloated bureaucracy redistribution machine now attached. A late-to-the-party entitlement program designed on the same model that’s failing us now when we need new thinking more than ever.

    It can’t even claim that it will work as both Soc Sec and Medicaid ‘work’ out of the gate, but rather it’s a stillborn mess.

    The cynics truly think it was designed to fail. I’m willing to entertain the idea that it’s more a series of a some decent ideas, many wrongheaded ideas and failed models along with compromises and backroom deals. Much of it is doomed to fail.

    It’s spectacularly bad.

  3. It’s also inducing, but really forcing the young into this stillborn mess to subsidize the old. The incentives and the system itself aren’t really going to control costs and it transfers wealth from the young to the old WITHOUT addressing many of the root causes of rising costs in the first place.

    Morally bad. Gets the incentives wrong. Bad law.

  4. Malcolm,

    Thanks for the link!

    I suspect many of the true-believers and people with skin in the game won’t back off now, nor perhaps ever.

    For others, who trusted this administration enough to just let him handle things, or trusted in the inertia of the system, or who kind of lined-up with his ideals, or who just don’t pay attention or care enough one way or the other….

    They could do a lot worse than Hayek right now.

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