Brace Yourself for Obamacare Sticker Shock

You can count on Obamacare costing more than estimated.


Nor are we getting value. One thing you can count on: It will cost more than estimated. Health care costs have gone up at three times the rate of inflation for over the last decade. The Congressional Budget Office originally estimated the Obama exchange's 2014 outlays would be $15 billion. It has upped that amount to $24 billion. Earlier on, it had pegged the cost for 2015 to 2019 at $337 billion, and the CBO now predicts $420 billion for that time period. When Medicare was passed in 1965, predictions were it would cost $12 billion in 1990; it actually cost $110 billion. No wonder Warren Buffett said that health care costs in the United States are "like a tapeworm eating at our economic body."

We are going to get sticker shock over deductibles. The law requires insurers to cover a broader array of benefits than they previously did. Out-of-pocket costs for consumers top out at $6,350 for individuals and $12,700 for families. This eliminates the option of choosing high deductibles in return for cheaper premiums. And consumers, especially those who are healthy and don't qualify for government subsidies, will thus have to pay more, sometimes double their current rate. Yes, the program may benefit older, lower middle-class people, but they are placing new burdens on the younger, middle- and upper middle-class, yet another misrepresentation of Obamacare by the president.

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What is to be done about our health care? More and more people are advocating a single-payer system as the best solution, for they now realize that Obamacare does not address the underlying causes of the health care cost explosion, namely a private insurance system and a fragmented income-seeking medical care delivery system that is largely paid on a fee-for-service basis.

Nothing will happen until the public becomes sufficiently aware and even fearful of the growing failure of our system to provide the affordable health care that they and the nation needs. A serious approach has been proposed by Arnold Relman, a long-time, major health care expert. In a recent issue of The New York Review of Books, Relman advocates multi-specialty group practices that already employ about 130,000 full-time equivalent physicians and provide medical care for about one-third of all patients. "Replacement of all public and private insurance and elimination of itemized bills with a public tax-funded system that simply paid medical groups per capita for comprehensive care would avoid much of the expense and many of the other problems with the current system," said Relman. The resulting savings would be enormous and provide sufficient compensation for the facilities and physicians needed for universal care and would thus make it affordable.

Success for the long-overdue attempt to give us a decent health care system should be welcomed by all. It has been made much less likely by the managerial ineptitude of this administration. The temporary fix proposed by Sen. Mary Landrieu, a Louisiana Democrat, to let people keep their current policies has attracted support from her party, especially those who are on the verge of running for re-election, even though it would mean poorer applicants not enrolling through the federal exchanges would thus fail to qualify for federal subsidies. President Obama now proposes something similar, and says he's sorry. It's an American tradition to forgive mistakes, but he's abusing the privilege.

This Obamacare fiasco has dramatically undermined the president's credibility and the central political appeal of the Democrats' assertion that they are siding with the middle class, who are now being asked to pay so much more to give health insurance to everybody else. It's no surprise the Democratic coalition is beginning to divide. That may be good news for Republican opponents of Obamacare, but it's bad news for millions of people at risk. And whatever your politics, a floundering president with three years left in his term is bad for all Americans.