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