American Elephants


Did The Election Save ObamaCare? Are We Helpless? by The Elephant's Child

A number of companies are announcing that they will have to make tough business decisions in response to ObamaCare. ObamaCare begins to come into effect on January 1, and American companies are having to make business decisions. Those who wrote the health care act in the backrooms of Congress were all excited about taking a big step on the way towards single-payer health care. That has been a dreamed-of-goal for years for Democrats, because it makes people dependent on the government, and once dependent the people will continually keep Democrats in power lest they lose their benefits.

The trouble with Democrat dreams, is that the left doesn’t understand basic economics, free market capitalism, how business works, what part incentives play, or even where money comes from. Where does money come from? Why you just raise taxes, especially on the rich who can afford it, and should be brought down anyway.

Here are some examples: take the “Occupy movement.” Hordes of folks in Adidas, Levis, LL Bean or Columbia parkas, carrying iPhones, iPods, Coleman tents, Jansport packs, Kelty and Coleman sleeping bags assembled in city parks to protest corporations.  At the Democrat convention this year, an enterprising video maker asked conventioneers if they would support a law outlawing profit. They absolutely would, and none seemed to understand why they were ridiculous.

With such bad unemployment statistics, the Obama administration changed the definition of full-time employment by knocking it down from 40 hours to 30 hours. Businesses must either pay for health insurance for their employees or pay a fine. It is a surprise to many that the profit margins for business are not very large. The reason that retailers call it “Black Friday” is because that is the day when most retailers begin to make a profit for the year. Think about that — the end of November.

ObamaCare will add $1.76 per hour to the cost of a full-time employee. The fine for not paying for their insurance is 78¢ an hour. Businesses do not have to pay for the health insurance for part-time employees. Many businesses are simply closing because they cannot afford the additional costs. Others are doing major layoffs. Major restaurants are switching their employees from full-time to part-time, or 28 hours a week. These are not easy business decisions, but the political left is responding with calls for boycotts.

The Obama administration hid a sharp rise in the numbers of Americans on food stamps until after the election. The administration has been encouraging food stamp use, and trying to get more people on them, but food stamps are a cost for government.  When conservatives oppose food stamps, they want people to be gainfully employed and not need government help for food. There are consequences. When ObamaCare forces companies to lay off employees, more people need unemployment compensation, and when they can’t find employment end up needing government help with food and welfare  to survive. When fewer people are working, fewer businesses make a profit. Fewer people pay taxes and the government has less income, with which to help those who are dependent.

ObamaCare is a stupid mess of a bill.  It is not paid for in any realistic way. The legislation lowers Medicare spending over the next ten years in order to fund health insurance for young people. That means lower payments to doctors, hospitals and other providers — reductions that will seriously impair access to care for senior citizens.

The Office of Medicare Actuaries has predicted that these cuts will force one in seven hospitals out of the Medicare system in the next eight years. Payments to doctors under Medicare will fall below Medicaid levels and will continuously fall behind Medicaid. From a simple financial point of view, seniors will be less desirable patients to doctors than welfare mothers.  Seniors will increasingly become dependent on emergency rooms. Today almost one in every three doctors is not taking any new Medicaid patients.

The law requires us to get a long list of preventive services without deductible or co-payment. Economists at Duke University calculated that if every patient got the recommended screenings and tests, the average primary-care physician would have to spend 7½ hours of every day giving preventive care to healthy patients.

There will be a huge increase in demand for care, but no change in supply. We are already thousands of doctors fewer than those required, and the medical-training pipeline cannot produce the increased numbers needed. Those in plans that pay less, will have an increasingly hard time finding care.

Lawmakers seem not to understand incentives. Insurers must charge the same premium for all, regardless of expected health care costs. This means that they will profit from healthy enrollees and incur losses on the less healthy. The incentives will be to offer more services to the healthy and less to the sick. People will have an incentive to stay uninsured while they are healthy and enroll after they get sick to get their bills paid.  But wasn’t the whole idea to get the uninsured — insured? Estimates are that the 30,000-50,000 people without insurance will remain about the same numbers because of misguided incentives.

These are problems inherent in the ObamaCare legislation itself. Secretary Sebelius has already offered hundreds of waivers, though we don’t know much about who got waivers from just what. Can Congress tinker and tweak enough to make it a viable plan that will not destroy the country?  They would do well to simply vacate it and start over, but that won’t happen either. The election is over and we’re in a mess. Here are some ways to protect yourself.



Is Free Market Capitalism Morally Superior? Of Course! by The Elephant's Child

Economist Walter Williams has a special genius for explaining complicated things in simple terms. He is a renowned Professor of Economics at George Mason University, and in this interview he takes on the free market. Good video to share with your high school and college students.




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