Thursday, January 5, 2017

Obamacare


At the risk of pissing everybody off, there are some good things about Obamacare.

Preventative medicine....great idea.
Finding more economical delivery systems then the Emergency Room....brilliant.
Providing access for the highest risk segments of the population...great.

But it also has some fatal flaws.

The Project Planning Pyramid.  Risk, Timing, Cost and Deliverables cannot all be independent variables.
Obamacare painted itself into a corner when it tried to mandate that cost, deliverables, timing and risk all be independent variables.

Economic systems have feedback loops.  Moving one variable results in other variables adjusting to form some kind of equilibrium.  There are trade-offs.

It is not mathematically rational to require everybody be insured, everybody be insured for everything and to mandate the cost.  It is also not adult thinking.

It is mathematically rational to slap a $5/hour escrow on every employee and allow them to buy into pools stratified by age and gender...much like term life insurance.  Then, your max annual (or quarterly) expenses are pro-rated to the amount of money you paid in (basically hours worked) the previous year (or quarter).

Employees who are making minimum wage will probably need a wage bump to make this fly.

What happens if you are not able to pay for the five million dollar surgery that might keep you alive?  Well, you get to score on that term life insurance.  It is a win either way.

Seriously, price pressure will cause that equilibrium mechanism to kick in and prices will come down.  And there is nothing that stops you from buying additional insurance to supplement your $10,000/year basic policy.

It the proposal good policy?
Mathematically rational is not the same thing as politically rational or "good policy."  I recognize that.



Borrowed from Charles Hugh Smith
 But the proposal is better than the healthcare system imploding.  No matter how much we might wish it, there is probably no way to unwind Obamacare back to where we used to be.


The proposal is better than doubling the minimum wage.

It is better than the cost "cliff" at 28 hours/week.  How many people are working two and three jobs, working far more than 28 hours/week and yet still have no healthcare insurance?

I just wanted to point out one path out of the quicksand.

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