Obamacare’s death spiral.

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UnitedHealth CEO Stephen Hemsley (AP photo)

UnitedHealth CEO Stephen Hemsley (AP photo)

Listen To You Tell Me Texas Friday 12/4/15

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And so what was prophesied has come to pass. While the proponents of Obamacare were making their emotional and anecdotal arguments for annexing one-sixth of the U.S. economy, many of us were making fact-based economic arguments against the idea.

Five years later, facts are, as they are wont to do, asserting themselves.

The latest example comes from UnitedHealth CEO Stephen Hemsley, who was quoted yesterday in The Hill newspaper as saying he regrets entering the Obamacare marketplace. “It was for us a bad decision,” said Hemsley at an investors meeting in New York.

UnitedHealth is the country’s largest health insurer. They have announced that they will quit advertising Obamacare plans and may pull out of Obamacare altogether in 2016. If they carry out that threat, it will become exponentially more difficult to purchase Obamacare-compliant coverage.

According to Hemsley, UnitedHealth will lose more than a half billion dollars over two years by staying in the Obamacare marketplace. Therefore, they’re thinking about pulling out. If they don’t pull out, it will be because the Department of Health & Human Services will find some way – outside the purview of Congress – to subsidize UnitedHealth’s participation.

Any number of people saw this coming. Some were members of the conservative pundit class. (One such pundit was right here.) Some were members of Congress. But the voices that spoke with the most eloquence yet with the least effect were the men and women who own and run small businesses.

It was American small business that could clearly see that Obamacare would never work. Small business owners live close to the edge. Most operate on razor thin margins. Staying in business requires understanding what happens when demand and supply get out of balance. It also requires a facility for simple math.

From one corner of the country to the other, small business owners did the math (in their heads) and immediately understood that it could never work. You cannot create demand for something absent a mechanism to expand supply. If you design a market in which consumers with the highest rates of consumption are the very ones who pay the least, losses become inevitable. No company – no matter how large – is going to willingly lose money for long. Thus millions of ordinary Americans figured out on their own that Obamacare would never work.

Yet the Ivy-credentialed elites who run our government – but who have never run a business – staunchly believed that it would. Armed with that belief, a supine mainstream media and control of the executive and legislative branches, they crammed Obamacare down our throats.

Now, nearly six years on, actual facts and actual math and actual economics are asserting themselves and debunking the faculty lounge theory that spawned Obamacare.

Economist Thomas Sowell once said something to the effect that there is only a limited amount of damage that can be done by the dull and stupid. For a truly monumental disaster, he said, you need people with high IQs.

He was so right.

Paul Gleiser

Paul L. Gleiser is president of Gleiser Communications, LLC, licensee of radio stations KTBB 97.5 FM/AM600, 92.1 The Team FM & KYZS in Tyler-Longview, Texas.

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4 Responses

  1. Linda E Montrose says:

    Thing is, obama never meant for it to work and he didn’t care who or what it brought down because that was the plan all along! He wants a government run program for everyone except himself and congress of course and since people didn’t want that, he devised the demise of regular healthcare as we knew it! Thus, the only thing we will be able to have is a one payer system, just as he wanted in the first place.

  2. A timely and right-on-the money assessment of the current down-spiraling Obamacare fantasy becoming nightmare. My business, Lone Star Comics, is right in there with all the thousands of small businesses having to navigate the crocodile-infested waters of Obamacare. Obamacare starts for us January 1st. We have 85 employees. Obamacare will suck as much as $100,000 out of your cash flow (especially if we hire more people). For now we are profitable, but we are scrambling to figure out ways to sell more to offset our big Obamacare loss. At the same time, we are looking at our low profit areas that should now be discontinued so as to reduce staffing demands. 2016 will be, we think, the year all of Obama’s socialist fantasies begin to REALLY kill the economy. Many small businesses manage on tight margins. Obamacare will push many to break even or worse. Don’t be surprised if a lot of us little guys go under during the year Obama is doing his swan song.

  3. Jena Smith says:

    Pelosi: “We Have to Pass the Bill So That You Can Find Out What Is In It”.

  4. C M Solomon says:

    Before I comment on the subject at hand, I wish we Conservative Patriots would STOP using the “language of the left” that deliberately camouflages the real meaning of the Left’s diabolical goals to destroy our individual rights to exercise our own judgment without their (Left’s) dictatorial control over EVERY aspect of our lives. Does anyone see the abdication of real meaningful words when we use the terms “single payer” or “one payer” system to describe the Marxist goal of DICTATORIAL health care by government edict?

    The Marxist Left is consumed with their ego-maniacal “brilliance” and despises the “serfdom of society” that they are determined to subjugate under their iron boot of tyranny. For the time being, these followers of Saul Alinsky (and Lucifer) must use every “compassionate technique” to hoodwink the public into following their utterly evil dogma of “WE WILL TAKE CARE OF YOU”. This is the essence of their soft bigotry: trust us and distrust yourself and your fellow man that doesn’t care about YOU. That is to say, “damn the free enterprise system!”

    Once this LIE is established in a low information population that has been persuaded by institutionally wicked propaganda machines (media, education, and government bureaucracies of every size and flavor), the way is clear to nationalize DICTATORIAL control of EVERYTHING. Everything includes medicine, energy production (fuel and electricity), banking and investment, housing, food, transportation, construction, education, healthcare, farming, fishing, ranching, manufacturing of every type, immigration, courts, taxes, fees, licenses, job assignments, business locations, community development, land and river use, language mandates, marriage, religion, media/press content and operation, law enforcement, military, and lastly, your PROPER acceptance of the bounds set for YOU by the all-powerful benevolent rulers that have brought you this utopia – and YOU better like it! This is why these cretins envy the dictatorial power of the despots that rule the uncivilized third world.

    In summary, tyranny is a wonderful thing as long as the ruling class is FREE to decide YOUR destiny and productive role in their glorious experiment in their advanced civilization. The spirit of Hitler, Stalin, Mao, etc., still lives today, but in a “kinder and gentler” form. The wise among us see no difference in Obama NO Care, Obama Media, Obama Banking, Obama Immigration, Obama Housing, Obama Energy, etc. It is all intended to usher in the dictatorship they want in a piecemeal fashion, and out of focus. Whether their ideas work or not are immaterial and are not to be questioned.

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