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ObamaCare Beyond the Handouts – Wall Street journal June 24th

We’ve already proved we can subsidize health care. But which subsidies make sense?
By HOLMAN W. JENKINS, JR.

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By one standard no government program can fail, and that’s the standard being applied to ObamaCare by its supporters: If a program exists and delivers benefits, the program is working.

Paul Krugman, Nancy Pelosi and others consistently point to the fact that people are willingly receiving ObamaCare benefits as proof of the program’s value. Mr. Obama himself says: “When you talk to people who actually are enrolled in a new marketplace plan, the vast majority of them like their coverage. The vast majority are satisfied.”

And the polls indeed show that 74% of ObamaCare’s eight million enrollees are “satisfied” with their plans, because the polls fail to count the 12 million who are eligible but decline to enroll.

Of the eight million who have signed up, some 87% are receiving taxpayer subsidies. In other words, they are getting health care partly or wholly at someone else’s expense. The latest data reveal that the average monthly benefit amounts to $276 per person (up from $268 in February), allowing the typical HealthCare.gov user to buy a plan for $69 per month out of pocket.

To put it another way, the annual subsidy amounts to $3,312 per recipient. Which is excellent if you’re one of the recipients.

Steve Rattner, a Wall Street figure and President Obama’s former auto-bailout czar, insists in a recent New York Times op-ed that ObamaCare “is working,” by which he apparently means it’s in operation, which nobody denies. Mr. Rattner, like a lot of analysts, writes as if costs are benefits—as if millions of people lining up for something from the wallets of their fellow citizens, ipso facto, is proof of a worthwhile program.

Mr. Rattner, in a throwaway line—really, a partisan pleasantry—adds without evidence or elaboration that health-care costs are lower than they otherwise would be at least partly due to the new law.

Now, if this were true, it would be the greatest validation of ObamaCare as public policy but there is no reason to believe it’s true.

The right question about any program is whether the benefits justify the expenditure of taxpayer money. ObamaCare’s cheerleaders provide not cost-benefit analysis but benefit analysis—as if money grows on trees or is donated by Martians or can be printed in limitless quantities by the Fed.

ObamaCare, with its subsidies to those with low incomes, is not the worst thing in our health-care system by far. Medicare indiscriminately subsidizes everyone in Warren Buffett’s age group; and, more insidiously, trains Americans from an early age to expect somebody else to cover their medical costs in retirement. And the giant tax handout to employer-provided insurance perversely treats the richest taxpayers as the neediest.

It pays to remember, however, why the pending Supreme Court decision in King v. Burwell is such a lethal threat to ObamaCare. King v. Burwell argues the IRS is illegally misreading the law to grant subsidies to 6.7 million users of the federal ObamaCare exchange known as HealthCare.gov.

King is a threat to ObamaCare because, without subsidies, ObamaCare is nothing. It fixes no problem in our health-care system, except to subsidize more people to consume health care at taxpayer expense. Not that subsidies are always undesirable: They help some people get necessary care. But subsidies do the most good when used sparingly, because subsidies also tend to inflate prices for everyone as well as encourage inefficient consumption that doesn’t improve health and may even endanger health.

In a final irony, many Republicans, seeing the damage an adverse Supreme Court ruling would do, take the statesman-like view that a GOP Congress must stand ready to find a new way to extend subsidies to the 6.7 million people who, since the advent of ObamaCare, expect themselves to be subsidized.

Fine, but let’s also have a major rethink of who should be subsidized and who shouldn’t, across our whole range of health-care programs, including Medicare and the workplace tax benefit.

Never going to happen? It will, if the GOP summons the courage to fix ObamaCare along the lines of the original, rational, “reform” that has motivated health-care thinking for four decades. A place to start would be reducing ObamaCare’s costly coverage mandates so policies would be genuinely attractive to people spending their own money; subsidies could then be trimmed back because fewer people would need subsidies to induce them to buy coverage.

We’ve always said that ObamaCare, for all its flaws, could become the instrument by which responsible reformers renew their push for health care that delivers value for money. In the meantime, however, no worthwhile thoughts about ObamaCare, pro or con, are to be heard from people who count a program as a success just because Americans enjoy receiving benefits at the expense of other Americans.

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