Obamacare Defies Rules of Economics Once Again

Thursday, April 5th, 2012 and is filed under Blog, Economy, Obamacare

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How bad is Obamacare?  This bad.

The most basic rule of economics is that a decrease in demand for a product or service will result in downward pressure on the cost of that product or service.  Well, it has become clear that the bad economy is taking a toll on health services.  Many people have lost their jobs, and due to the anti-free-market government tax policy, their health insurance is tied to their place of employment.  Without any employment, many of the unemployed are stuck without insurance.  That has led to a decline in doctor’s visits and usage of some prescription drugs, according to the IMS Institute for Healthcare Informatics.  This, from the New York Times:

The number of prescriptions issued to patients declined by 1.1 percent compared with 2010, and visits to the doctor fell by 4.7 percent, the report said. Visits to the emergency room, by contrast, increased by 7.4 percent in 2011, an increase that the report’s authors said was linked to the loss of health insurance resulting from long-term unemployment.

So with the decrease in demand, you would expect the price of health insurance premiums to decline, or at the very least, to increase at a slower rate.  Well, not with Obamacare and its costly mandates on insurance companies.

How destructive are these meddlesome mandates on the private sector?  They distort the market to such an extent that, despite the decrease in demand for healthcare, premiums still skyrocketed to record highs.  Kaiser Family Foundation recently reported that the average family premium has increased $2,200 since 2009.  The facts are straightforward: private insurance companies are recouping the front-loaded costs they will incur under Obamacare mandates, even before they take effect.  This is exactly what happened in Massachusetts with Romneycare.

Sadly, this is all an insidious plan to impose single-payer healthcare on us.  Obama is banking on the fact that people will not realize the culprit of their high insurance premiums, blaming it instead on the free-market – even though there is no free-market in healthcare.  Then, people will start clamoring for single-payer European style healthcare.  This is why we must fight to defund and repeal Obamacare as soon as possible, even if the Supreme Court strikes down the individual mandate.