Wednesday, December 4, 2013

'Better off' under Obamacare? Hardly

This was a letter to the editor of a newspaper. It looks like the author, Strobl, is or was a graduate student in economics at George Mason University. I saw it listed on Google News.

http://fredericksburg.com/News/FLS/2013/122013/12042013/807082

"Date published: 12/4/2013
 
'Better off' under Obamacare? Hardly
It was irresponsible for The Free Lance-Star to have passed off as news what should have properly been relegated to the opinion page. While the Families USA study asserts that the "vast majority will be better off under the Affordable Care Act" (Nov. 22), the same study ignores many of the adverse effects of the act.

The study says that three-quarters of the 403,000 Virginians with individual health coverage will qualify for subsidies. What's ignored is the reality that those subsidies, to be bestowed upon more than 300,000 Virginians, do not magically fall from the sky. Those subsidies are paid for by--wait for it--other Virginians! The "vast majority" of the rest of us who are funding more than 300,000 subsidy recipients are clearly not "better off" under the ACA.

Then there is the ACA's employer mandate. This onerous requirement on businesses creates an incentive for firms to avoid expanding jobs. Potential workers who will not be offered employment due to the ACA's mandate are clearly not "better off" under the ACA.

Finally, the ACA disrupts the critical actuarial underpinnings of working insurance plans (one example: the inability of insurers to price based on the insured's health status). This, as we are beginning to see, will reduce the supply of insurance plans offered in the market.

Simultaneously, the ACA will increase demand for health care. This brutal combination of reduced supply and increased demand is an age-old recipe for higher prices. These higher health care prices will inevitably affect all consumers of health care--not just those who benefit from the ACA.

Virginia families facing higher health insurance premiums are clearly not "better off" under the ACA.

A more appropriate headline for this article might have been "Some will be better off under the ACA. Others, not so much." As written, this article was an opinion piece not suited for publication on the front page. Clearly, readers would've been "better off" if the FLS had given this some thought.

Michael Strobl
Stafford"

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