Shorter Barack Obama: They shoot Samsungs, don’t they? In a speech “celebrating” the Affordable Care Act in Florida yesterday, the president admitted that his signature ObamaCare program has some problems, but compared them with glitches that consumers find with their cellphones. “They fix it, they upgrade” Obama said, “unless it catches fire.”
This analogy won’t catch fire — it’ll blow up in his face:
The point is, now is not the time to move backwards on health care reform. Now is the time to move forward. The problems that may have arisen from the Affordable Care Act is not because government is too involved in the process. The problem is, is that we have not reached everybody and pulled them in. And think about it. When one of these companies comes out with a new smartphone and it had a few bugs, what do they do? They fix it. They upgrade — unless it catches fire, and they just — (laughter) — then they pull it off the market. But you don’t go back to using a rotary phone. (Laughter.) You don’t say, well, we’re repealing smartphones — we’re just going to do the dial-up thing. (Laughter.) That’s not what you do.
This analogy would work great if (a) the government mandated that everyone buy a cellphone, (b) the government also mandated that all cellphones have similar interfaces and apps, and (c) the government then ran the markets in which the phones were purchased. The problems with ObamaCare don’t come from insurance policies with bugs in them; they spring from the government interventions that Obama and his fellow Democrats imposed on the individual insurance markets.
Those interventions have created distorted risk pools that have not caught fire but blown up instead. Premiums that jump 50-67% in a single year, as they did in Minnesota this year after double-digit increases last year, are not a “bug” but an eminently predictable response to the distortions of these risk pools over the last three years. Moreover, the “fixes” Obama wants are simply more taxpayer subsidies to bail out the insurers for the losses driving the premium hikes — essentially opening up an ocean of red ink at the Treasury to hide the problems rather than solve them. Meanwhile, most consumers have to spend thousands of dollars to see even the first benefit other than a wellness check from their insurance — and in some cases, tens of thousands of dollars.
In other words, this is the Samsung Note 7, only worse. Imagine that the Affordable Cellphone Act had mandated that all cellphones operate like the Note 7, but the prices increased from $700 in Year One to $1,292 in Year Four without any improvement in quality or service. Now imagine that consumers have to pay for the first 5,000 minutes out of pocket before getting free coverage, and that if they actually try to use it, the phone has an almost-even chance of catching fire in their pockets, but that the only response from the White House is to try to get Congress to offer a subsidy for Neosporin. Now we have an actual analogy to ObamaCare.