BrianGarst.com

Gazing into my crystal ball, I see the world as it exists post-Obamacare.  The health insurance industry collapses.  Doctors are closing their doors.  Democrats are out of power.  I suppose you could say it’s a mixed blessing.

It is not hard to figure out what the health care reform bill will do to health care itself.  Using redistribution, the bill will increase consumption of health care.  At the same time, the additional burdens placed on doctors who can’t stay afloat on what Medicare pays will result in many leaving practice altogether.  Greater demand + dwindling supply = skyrocketing prices.

While this is happening with health care, health insurance will be stuck between a rock and a hard place.  On the one hand the federal government has just mandated the purchase of their product, delivering millions of new customers.  Maybe.  The problem there is that enforcing the mandate will be nearly impossible, if the courts don’t strike it down altogether.  Federal regulations also now prevent insurers from refusing coverage based upon preexisting conditions.  The market response, of course, is to charge higher prices to those with greater risk.  But many state regulations don’t allow price discrimination.  This means that health insurers are basically being forced to give charity.  Forcing insurers to take high cost customers + denying them the ability to charge them appropriately = bankrupt insurers.

So, from above we now have bankrupt insurers and skyrocketing health care costs.  Skyrocketing costs + bankrupt insurance = a broken system in which nearly everyone will suffer.

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