Shortcomings of the Affordable Care Act

The Humanitarian Shortcomings of the Affordable Care Act

Web problems can be fixed, Obamacare cannot.

Let’s stipulate that most people who favor the ACA have honorable intentions: they want everyone, including people in ill health, to have access to good and affordable medical care. All decent people should want that. (How many favor it merely because it builds up government power and takes money from the well and well-heeled? I suspect it’s the same number as those who oppose it out of a dislike of the poor and ill. Of course politicians who favor the ACA undoubtedly find that it lines up nicely with their political interests.)

The problem is that in making government policy, unmovable obstacles often stand between motives and desired results. The laws of economics and politics thwart the best intentions. Sheer will is not enough to overcome these obstacles, because they are implicit in the logical structure of human action.

One cannot merely decree that there be good and affordable medical care for all. Setting up a byzantine bureaucracy won’t do the trick either. Reality is simply not subject to the human will in that way. The maxim “nature to be commanded must be obeyed” applies here.

If politicians, bureaucrats, and pundits do not understand this, it indicates that they are stuck in an outmoded mindset. Before the 18th century, Ludwig von Mises wrote, the “belief prevailed that in the field of human action no other criterion could be used than that of good and bad. If a policy did not attain its end, its failure was ascribed to the moral insufficiency of man or to the weakness of the government. With good men and strong governments everything was considered feasible.” But, Mises continued,

    Then in the eighteenth century came a radical change. The founders of Political Economy discovered regularity in the operation of the market. They discovered that to every state of the market a certain state of prices corresponded and that a tendency to restore this state made itself manifest whenever anything tried to alter it. This insight opened a new chapter in science. People came to realize with astonishment that human actions were open to investigation from other points of view than that of moral judgment. They were compelled to recognize a regularity which they compared to that with which they were already familiar in the field of the natural sciences.

News of this natural limit on the efficacy of power was not warmly received in all quarters. It did not sit well with those who found it inconvenient that, as Mises wrote elsewhere, “there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success, in precisely the same way as they must take into account the laws of nature.” What did such people do? They denied that those natural market forces operated. The results were tragic.

The ACA is an excellent case in point. Barack Obama and his allies saw a problem: some people can’t afford or qualify for medical insurance. But instead of investigating how market forces might currently be thwarted from addressing this problem, they used government (the blunt weapon of aggressive force) to decree that insurance companies — which are already largely creatures of the state — must accept all applicants regardless of their health (guaranteed issue) and must charge the unhealthy the same price as they charge the healthy (community rating); that is, premiums may not reflect actual risk, converting insurance into a covert transfer program.

Of course, in accord with the economic rule that you can never do just one thing, the matter could not be left there. If the young and healthy were going to subsidize the already sick, they would have to be forced to buy coverage at inflated prices; otherwise they would put off buying insurance until they got sick. (The current low penalty for not buying coverage can be expected to rise in the future.) And bureaucrats would have to set minimum standards, or else the mandate would be a mere formality. Thus, regardless of an applicant’s preferences or situation, all coverage must include, among other things, maternity and “mental health” benefits and “free” preventative services (which means no one knows precisely who pays for them). Insurance policies may not have caps on the total dollar value of benefits, but this may not be reflected in the price.

Of course, bureaucratic rules thus take precedence over personal preferences. It doesn’t matter what you want. Personnel at the Department of Health and Human Services and its myriad boards (advised by whom?) know better. Hence the cancellation of many individual policies that we’re hearing so much about. Why should a man have to pay for maternity benefits he will never use? Questions like that are better left unasked.