About that single-payer Plan B for ObamaCare ...

Conservatives have long suspected that the long-term goal of ObamaCare is to force the adoption of a single-payer system. Progressives have occasionally advocated for that transition, and of course Bernie Sanders campaigned for the Democratic presidential nomination on the basis of “Medicare for all.” We may soon find out whether it’s true. The crisis may hit as soon as next February, The Hill’s Sarah Ferris notes, regardless of which candidate wins:

The next president could be dealing with an ObamaCare insurer meltdown in his or her very first month.

The incoming administration will take office just as the latest ObamaCare enrollment tally comes in, delivering a potentially crucial verdict about the still-shaky healthcare marketplaces.

The fourth ObamaCare signup period begins about one week before Election Day, and it will end about one week before inauguration on Jan. 20. After mounting complaints from big insurers about losing money this year, the results could serve as a kind of judgment day for ObamaCare, experts say. …

Levitt and other experts warn that if the numbers don’t improve this year, more insurers could bolt. That would deal a major blow to marketplace competition while also driving up rates and keeping even more people out of the exchanges.

Already, many insurers this year are proposing substantial rate hikes with the hopes of making up for higher recent medical costs. The average premium increase next year is about 9 percent, according to an analysis of 17 cities by the Kaiser Family Foundation. But some hikes are far higher: Blue Cross Blue Shield has proposed increases of 40 percent in Alabama and 60 percent in Texas.

If the Trojan-horse theory holds, then the next argument we’ll get from the inevitable ObamaCare collapse is that only a total takeover of the US health-care system will save it. However, a new study from Colorado shows that a single-payer system would produce a similar collapse into a sea of red ink, shrinking provider bases, and skyrocketing costs and taxes. Advocates for state-wide socialized medicine managed to qualify a referendum for the November ballot, but an independent study of the proposal says that it will start off in the red — and only sink further and further every year. By the end of its first decade, it will have a $7.8 billion deficit, even with federal subsidies (via Matt Vespa):

The 2016 ballot initiative to give every Coloradan healthcare won’t be able to cover its costs, according to a study released Monday by the Colorado Health Institute.

That’s despite the fact that the proposed amendment 69, known as ColoradoCare, would more than triple the amount of taxes collected by the state.

“Simply put, the revenue would not be sufficient,” the report stated. “CHI’s model projects that the revenue from taxes and federal funds would fall just short of paying ColoradoCare’s bills in the first year – with widening deficits in each subsequent year.”

The study suggests ColoradoCare would have to cut benefits, raise taxes or reduce payments to doctors and hospitals to achieve long-term financial solvency. The ballot language would empower the proposed 21-member board to make such decisions.

In my column for The Fiscal Times, I argue that this is the inevitable result when government seizes control of private-sector economies. The solution should not be the hair of the dog that bit us:

In a monopolistic government-run system, what options would Colorado residents have to fix these problems? CHI offers three ways to keep ColoradoCare from collapsing. The government-run system “could ask its members to approve tax increases,” (emphasis mine), which would erode buying power across the board and have a negative effect on the economy. Failing that, the government could choose to provide fewer benefits or stiff providers with lower payments.

These are precisely the options left when the government takes over a private-sector function. It operates from a scarcity model, choosing to ration and tax where a healthy market would provide opportunities for price signaling, competition, and increased production. None of the potential solutions to the fiscal crisis that would result from ColoradoCare add to the choices or options consumers would have in the market; it either restricts their buying power, their choices, or their providers. After all, how many doctors will choose to work and live in Colorado in a system where the government restricts what they can make from their work, and keeps reducing their pay?

Those who see private markets as zero-sum games may never be convinced of the folly of single-payer systems. The rest of us, however, must demand an end to this failing Obamacare system and an end to the fantasy of socialized medicine at the state or federal level. The only way to control health-care costs is to establish lightly regulated markets with price signaling to consumers, encouragement for providers to enter the market and a rational reconstruction of the concept of insurance to its proper place as an indemnification against unforeseen circumstances rather than as a maintenance program.

Until we do, we will continue to generate vast oceans of red ink and destroy an American health industry known for its innovation and expertise.

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