“Health care reform, President Obama’s signature policy achievement,” Paul Krugman assures us, “is probably going to work.” Why? Because
the Affordable Care Act is based on three simple ideas. First, all Americans should have access to affordable insurance, even if they have pre-existing medical problems. Second, people should be induced or required to buy insurance even if they’re currently healthy, so that the risk pool remains reasonably favorable. Third, to prevent the insurance “mandate” from being too onerous, there should be subsidies to hold premiums down as a share of income.
So, is it “probably going to work”? No, it isn’t. Why not? Because Obamacare is based on three idiotic ideas. First, bumbling bureaucrats got the great idea to force insurance providers to provide insurance to everybody and at the same rates, even if they already have a chronic condition requiring a lot of medical care, which would naturally just drive premiums up even higher for everyone in addition to creating a disincentive for young, healthy individuals to buy an insurance policy unless and until they actually got sick, thus driving premiums higher still. Second, to solve the problem of increasing premiums created by this first policy, Washington central planners decided that they should do away with the Constitution and individual liberty and force young, healthy people (many of whom are healthy because they choose to eat right and exercise) to buy an insurance policy against their will and contrary to their own financial interests under threat of penalty in order to subsidize the costs of health care of those who require a lot of it (many of whom are sick because they choose an unhealthy lifestyle). Third, to offer a carrot in addition to the stick to get young, healthy people who have low incomes to subsidize the costs of health care for older, less healthy people who generally have higher incomes, these same brilliant bureaucrats got the idea just to use force to expropriate wealth from those higher income folks in order to redistribute it back to those younger people with lower incomes.
Krugman’s description of the ideas behind Obamacare as “simple” is quite accurate, if by “simple” we take him to mean
It won’t work, because you can’t legislate away the free market without unintended negative consequences, as each of the government’s “solutions” above for the problems it created with its own legislation in the first place illustrate. Government bureaucrats seeking to use force and coercion to centrally plan the economy do not know better than the free market, in which individuals engage in voluntary exchange for mutual benefit, how to efficiently direct scarce resources towards productive ends. They can’t, since absent the free market’s pricing system, their decisions about how to direct resources are at best arbitrary and at worst a product not of good intentions but of corruption and the desire to use political influence for the benefit of one class of special interests at the expense of everyone else in society.