Nothing So Permanent As a Goverment Program

The original Friedman quote said “temporary government program” but I think it works this way as well. And today’s events cementing ObamaCare seem to prove that point.

So what happened? Much blame will be thrown around. Trump Fans will blame congress. Trump Haters will blame Trump and Democrats will try to take credit for what is effectively a GOP fielding error (to use a baseball term.)

Before we start into the Post-Mortem, some more Milton Friedman:

From my point of view, the primary blame lies with the GOP who ran for 7 years on “Repeal” or “Repeal and Replace” but apparently hadn’t actually planned on doing it. In light of the above Friedman video, their lack of desire to repeal makes a certain amount of sense. As I’ve stated before, there is no conservative base. That applies here as well. The senators who voted note want to keep that sweet sweet Medicaid (and to a lesser extent premium subsidy) money flowing into their states. It is, as I have said in the past, a Faustian Bargain. As the federal incentive fades away, Medicaid will continue to be more and more unaffordable for the states. (Something that is already happening.) But the political will to fix it will continue to trend in the “throw more federal dollars at it” direction. There are a number of reasons for this; most prominently that the federal government can (and does) run a gigantic deficit that most states are prohibited from doing, so this type of money looks “free” from the perspective of states since they don’t have to raise taxes. (The bill comes due eventually, and at some point we’ll be unable to service our debt, but set that aside for a moment because we’re thinking like craven politicians not like logical people.)

Now for Trump’s part, as I said on Twitter a good coach could paper over a bad team. Smart moves at the right time (a pitching change here, a pinch hitter there) can hide flaws and squeeze out a victory. Trump could have focused the news on the hold outs. Tried to change what is “politically profitable” by harping on the promises made (and abandoned.) Erased Congresses illegal exemption for the ACA, or what have you. But Trump isn’t a good coach. Instead we’re getting what seems to be a variable of Obama’s “Stray Voltage” strategy and discussing whether Scaramucci can do the fandango.

Ultimately though, the fault lies with the team itself though. The people on the field cannot look to the coach to make the plays themselves.

So what’s next. Therein lies the problem. Let us for a moment take Trump out of the picture. Why? Because I think he’d sign anything that came to his desk, even a single payer bill from Democrats. But I don’t see Democrats taking the house in 2018, even with this utter failure. (“What are you gonna do about it, vote for the democrats?” is what the GOP is saying right now.) Congresses approval has been in single digits for several years now. But incumbents keep wining. Everyone hates the other 434 congresscritters, but will vote for theirs.

Democrats face a hard map this year to retake control of the senate too. They have to pick up a net of 3. Even with this mess, McCaskill still faces an uphill battle I suspect. She’s genuinely unlikable, has 0 legislative achievements, actually voted for Obamacare in 2009 and is releasing proposals to solve the problem of insurance deserts that border on insanity. (Sorry about the paywall). MOGOP being what MOGOP is, they’re struggling for a candidate, but I think one will emerge. Will it be another Todd Akin? No effing clue. (My offer to assist on health policy for any MOGOP candidate still stands.)

So if Dems can’t take both chambers (lets face it the filibuster is dead if they take the senate) then nothing will change. Meanwhile, a system specifically designed to implode will continue imploding.  I’ll say this: We’ve never seen an entitlement crash in real time like we’re seeing now. Once Medicaid begins to really strangle state budgets, it’ll only get worse. At some point I suspect the GOPe will cut a “more spending” deal with democrats to try to tourniquet the worst of the bleeding, but the damage will already be done.

Oh, and let’s not forget the Cadillac tax! Once employers are faced with a 40% tax on benefits above a certain threshold they’ll likely start adjusting things to…well avoid that tax. They’ll do this by foisting more premiums on employees, reducing benefits, or eliminating them entirely. At the current rate of premium increase, we’re looking at about 20% of employees being subject to said tax in 10 years. (ballparking here because the data is complex, full graphs in the previous link.) By 2035 it’s upwards of 3/4. (And, because of the way unions negotiate, they’ll be the first under the bus!) So now we’ve thrown the employer market into disarray just like the individual one. What could possibly go wrong!

I was going to do a set of posts, in part based on a series of conversations with Friend of the Blog @insureblog on my thoughts about rejiggering health insurance, restoring it’s role as a financial too (i.e. insurance) and what type of insurance plan I would design for myself (and family) if I were given a buffet of choices. Alas, such effort would be wasted, so I’m going to go back to my world of animal research ethics where at least I can finish my PhD.

Eat Arby’s.