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Offlinepsyconaught
Chemical Connoisseur


Registered: 11/04/10
Posts: 6,100
Last seen: 7 years, 2 months
The economics of ObamaCare
    #19142165 - 11/15/13 06:50 PM (10 years, 2 months ago)

http://mises.org/daily/6587/The-Economics-of-ObamaCare

This is a very well written article that shows the realities of what the ACA is causing and what it will cause in the future. As it says in the article, 'its not rocket science.'

I've noticed that most of the people who are rooting for the ACA are doing so from a purely emotional standpoint and completely ignoring economics and real world implications.


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OfflineMush4Brains
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Registered: 07/31/13
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Re: The economics of ObamaCare [Re: psyconaught]
    #19142284 - 11/15/13 07:22 PM (10 years, 2 months ago)

You want to know what would cost the least and serve the most?  Single-payer, two-tier preferably.


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Offlinepsyconaught
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Registered: 11/04/10
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Re: The economics of ObamaCare [Re: Mush4Brains]
    #19142295 - 11/15/13 07:25 PM (10 years, 2 months ago)

i doubt it would cost less. It might serve more people but the quality of care would be absolute shit.

I noticed you didn't refute or address the arguments presented in the article.


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Offlinesytar
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Re: The economics of ObamaCare [Re: psyconaught]
    #19142407 - 11/15/13 07:44 PM (10 years, 2 months ago)

Single payer would cost less. Medicare had 2% administrative overhead. Insurance companies are sitting around 15-20% as of the ACA but many were above that prior to. Other savings come from proper preventative care (poorly done in this system despite what the insurance company incentives should be - happens in part because of copays). Lastly, single payer puts the squeeze on hospital executives and doctors, the system obeys monopsony pricing instead of perfect competition. This is arguably exploitative but it is what it is. The cost effectiveness is certainly bared out empirically  in international comparisons.

My internet doesn't get Mises. I only get Google, BackyardAquaponics, Shroomery, and Wikipedia. Paste the article and I'll eviscerate it for you though :smile:


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I post from my phone. Excuse the typos and autocorrects.


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Offlinepsyconaught
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Re: The economics of ObamaCare [Re: sytar]
    #19142425 - 11/15/13 07:49 PM (10 years, 2 months ago)

Quote:

Near the end of Human Action Ludwig von Mises declared that it was the “primary civic duty” to learn the teachings of economics. The public’s growing furor over the Patient Protection and Affordable Care Act — popularly known as “ObamaCare” — beautifully illustrates Mises’s point. No one has any business being shocked — shocked! — that millions of Americans will lose their current health insurance (including the present, irritated, writer), because such an outcome was obvious all along. Furthermore, the hilarious snags with healthcare.gov are merely a sideshow; the true problems with ObamaCare run much deeper than a malfunctioning website.

The Basic Structure of “ObamaCare”

The Affordable Care Act (ACA) was formally signed into law on March 23, 2010. There are numerous provisions that kick in at various stages, through 2020. For our purposes in this article, there are four key elements of the ACA that merit our attention:

Insurers are legally required to provide coverage to all applicants, regardless of medical history, with a partial “community rating” system for premiums, which means that insurers must set premiums based (mostly) on geography and age, rather than sex and (most) pre-existing conditions.
Health insurance policies must meet minimum standards (called “essential health benefits”), including no caps on annual or lifetime payments from the insurance companies for an individual policy.
Everyone is required to obtain health insurance, except for waivers granted for certain religious groups and those deemed to be unable to afford coverage. Government subsidies and state-based “health exchange markets” will be provided to assist individuals.
An “employer mandate” penalizes firms with 50 or more employees if they do not offer coverage for their full-time employees, defined as those working 30 or more hours per week.
Intended Consequences

There are reasons for the particular provisions above, which sound superficially sensible (if you don’t know much about economics). Obviously, before the passage of the new law, there were millions of people without health insurance coverage. Although many of them were young and healthy — thinking they could risk going without coverage — many of them wanted coverage but couldn’t obtain it, either because of the price or an outright refusal of coverage because of a pre-existing condition.

Now, given that the government wanted to mandate that health insurers provide coverage to all applicants, there had to be specific rules on what premiums they could charge, and minimums on the type of policies offered. Otherwise, the health insurers could say, “Fair enough, President Obama, we will indeed give a policy to any applicant — even someone with brain cancer. It’s just that the annual premium for people with brain cancer will be $2 million, and we will cap our total payment at $100 per year. Who wants to sign up? We’re more than happy to comply with the new mandate.”

Moving down the list, let’s consider the individual mandate, which requires that (just about) every American carries health insurance. The reason for this provision is to avoid what’s known as adverse selection. If health insurers were required to provide coverage to all applicants, with (partial) community rating, and if individuals retained the freedom to buy coverage or not, then the private health insurance companies would quickly go out of business. Healthy people could drop their coverage, saving on the hefty premiums each year, and then apply for health insurance whenever they got sick. This would be analogous to people buying car insurance only after they’d gotten in an accident; it clearly wouldn’t work for any firm to offer insurance in this environment.

But, given that the government is going to mandate that (virtually) all individuals obtain health insurance, it was necessary to offer subsidies and other mechanisms to make sure this mandate was feasible.

Finally, the employer mandate was ostensibly included, in order to minimize the disruption to the existing system. In the absence of an employer mandate, people feared that employers would drop their original health insurance plans, telling their employees to sign up at the state-based “health exchanges.” The reason for limiting the employer mandate to large firms (50 or more full-time employees) and their full-time employees (those working 30 or more hours) is that it would be unreasonable and counterproductive to impose such expensive requirements — which could be thousands of dollars annually, per worker — on small businesses or even a large firm concerning only its part-time workers.

The “Unintended” But Entirely Predictable Effects

We are now seeing many of the undesirable effects of the ACA. These are typically being described as “unintended.” However, this adjective is a bit of a misnomer, since these outcomes were entirely predictable, and in fact were predicted by many free-market economists in the debate leading up to the passage of the ACA. Cynics can justifiably speculate that at least some of the proponents of the ACA knew full well the outcome would be untenable, leading the public to embrace even more federal intervention in health care down the road.

The most obvious result is a large spike in premiums for many people, once the mandates on health coverage are fully phased in. The biggest hit will occur in places that right now offer bare-bones catastrophic policies with large deductibles and low caps. For example, according to this CNN article, officials in Florida estimated that the premiums on a “silver” plan would rise anywhere from 7.6 percent to 58.8 percent, while officials in Ohio estimated an average increase of 41 percent.

Now even if the official amount that certain individuals pay for their health insurance goes down, the real question is whether this is more than offset by the increase in taxes necessary to cover all of the new subsidies to poor individuals who cannot afford to meet the individual mandate. Step back and look at the big picture: Under the ACA, suddenly millions of new people are going to be seeking more medical care than they did before. There’s nothing in the new law that will magically create more doctors, hospitals, or MRI machines. Americans in general are going to pay for this, one way or another. Indeed, the huge increase in government responsibility for health spending will provide the justification for government-imposed rationing down the road — as even Paul Krugman acknowledges when he cheekily calls for death panels. (Really, click on the link to see the video if you don’t believe me.)

“But the President Said I Could Keep My Plan …”

Another predictable outcome is that many Americans will not be able to keep their previous plan. Millions of Americans who bought insurance in the individual market (i.e., not via their employer) will find that their plan doesn’t meet the standards of ObamaCare. To keep premiums down, relatively young and healthy, self-employed individuals had “catastrophic” plans with high deductibles. These are no longer legally allowed. According to this Forbes article, as far back as 2010 (sic!) Obama officials were projecting that 93 million Americans had health insurance plans that would be unacceptable under ObamaCare.

Job Losses

Besides rate hikes (and ultimately, government rationing of medical care), another major downside of the ACA is the job losses it will cause. For example, here is an email that a fellow economist sent to Greg Mankiw of Harvard:

With the implementation of the ACA (Affordable Care Act) these institutions are giving notification to their part-time faculty that their individual teaching schedules will now be limited to three sections. At the college this will likely result in the cancellation of 20-25% of the class sections in economics, and I would assume other areas will have a similar result. The students are not fully aware of the situation and many will be surprised that their desire to get a college education is now being impacted by the need to avoid the full implementation of the ACA. [Emphasis added]
Even some labor leaders recognize the devastation ObamaCare would wreak on workers, protesting to the government that it would “destroy the foundation of the 40-hour work week.”

This isn’t rocket science, as they say. If the government has to force employers to provide a benefit to their employees, it means it’s unprofitable; otherwise the employers would have already done it as part of their compensation package in order to attract quality workers. So if this costly, unprofitable employer mandate only applies to firms with 50 or more employees, and even then only applies to those employees who work 30 or more hours, then we shouldn’t be shocked — shocked! — to discover firms not growing past 49 employees, and/or limiting people to 29 hours per week.




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OfflineMush4Brains
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Re: The economics of ObamaCare [Re: psyconaught]
    #19142430 - 11/15/13 07:50 PM (10 years, 2 months ago)

Quote:

psyconaught said:
i doubt it would cost less. It might serve more people but the quality of care would be absolute shit.

I noticed you didn't refute or address the arguments presented in the article.




I don't like the PPACA, so I really don't care :shrug:.  I think it is an improvement over the previous system, but doesn't go far enough.  I don't think you understand the premise of "two-tier" if you say the quality would be shit.

The US spends 17.9% of its GDP on healthcare (5.6% more than any other country in the world), and yet we still have people showing up in the emergency room for something that could have been prevented by a simple doctor's visit a decade beforehand.  It would be cheaper, but keep ignoring facts if you so please.


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Offlinepsyconaught
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Registered: 11/04/10
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Re: The economics of ObamaCare [Re: Mush4Brains] * 1
    #19142468 - 11/15/13 08:00 PM (10 years, 2 months ago)

i agree the system was broken. You act as if government healthcare is the only answer though.


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Offlinestarfire_xes
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Re: The economics of ObamaCare [Re: psyconaught] * 3
    #19142544 - 11/15/13 08:12 PM (10 years, 2 months ago)

I have to laugh my ass off at people who think someone like Barrack Obama, John McCain, Harry Reid, Nancy Pelosi, John Boehner, et. al, know what is bes for them.

I mean, c'mon liberals.  Doesn't it insult your intelligence that these people think you are too stupid to make your own decisions?

Well, we know a few things for certain now:

1) If you like your healthcare, you can't keep it.  Period.
2) If you like your doctor, you can't keep him.  Period.
3) If you like your low premiums, you can't keep them. Period.
4) If you like a government man up your ass all the time, you are gonna love Obamacare.  Period.

:smirk:


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Offlinesytar
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Re: The economics of ObamaCare [Re: starfire_xes]
    #19142670 - 11/15/13 08:38 PM (10 years, 2 months ago)

So the first point is about catastrophic plans. Those won't even be around anymore, so the "rate hikes" they talk about for silver plans is complete apples and oranges.

Yes, more healthcare will be using healthcare and more of it. Supply and demand says prices will go up. They will. Fortunately, more people will be paying into the system, so that doesn't guarantee that any individual will be paying more. Well, young people forgoing health insurance will be. Unfortunately, since we don't let people die in the street, they are essentially socializing the cost of their healthcare. The same applies to people with inadequate plans who file for bankruptcy. Bankruptcy is quite antithetical to the free market. As far as taxes offsetting gains, of new taxes affecting the public at large I am unaware. Tax rates have largely remained the same, but perhaps they are warning of new taxes on the horizon. Hard to say. Certainly there will be expenses for the subsidies but much of it is right now coming from corporate profits (eg the medical device tax, doctor salaries, medical executive salaries, and others).

You can keep your plan? A lie. Not if you're trying to socialize the cost of your healthcare you can't you cheeky bastard.


Death panels? Yup. They are coming. So what? Other countries have then. They work well. And hey, you can still use private money to buy yourself off of the death panel chopping block. At least for a while, the insurance have death panels of their own. Well, had. They will get them back when the government brings their death panels into play.


Job losses and work hours cut. Yep. Happening. Not very widespread due to transaction costs, but happening. Not a universal phenomenon like the article wants to make you believe.



Still think the ACA is better than what we had. Two reasons: it capped administrative costs of insurance companies at 20%. Medicare runs at 2% so they can do it.

Second is the coverage of preexisting conditions. Haven't heard of a free market solution that can address them. The old system sucked. This one does too. Untethering healthcare from employment would be a good first step. Single payer would be the best final step.


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I post from my phone. Excuse the typos and autocorrects.


Edited by sytar (11/15/13 08:44 PM)


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Offlinestarfire_xes
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Re: The economics of ObamaCare [Re: sytar]
    #19142724 - 11/15/13 08:47 PM (10 years, 2 months ago)

Obamacare is going down in flames.  the people hate it, and they especially hate being lied to. 

by the way, you don't expect that the Republicans will bail Obama out do you?  They can't have asked for a bigger gift than what they got.  Obama managed to take a social issue that was completely in the hands of the democrats and hand it over to the opposition. 

If I were a democrat, I would be thinking hard about how to get rid of this incompetent buffoon.


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InvisibleMr. Bojangles
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Re: The economics of ObamaCare [Re: Mush4Brains]
    #19142818 - 11/15/13 09:02 PM (10 years, 2 months ago)

Quote:

Mush4Brains said:
You want to know what would cost the least and serve the most?  Single-payer




I tend to agree...the status quo system sucked, the ACA sucks...single payer would actually start to address some of the inherent problems on the supplier-side of the healthcare chain who are actually driving up costs.  Even a public option, supplying the cheaper form, would have eased some of the pains felt by the ACA by providing substantial competition.


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"It is dangerous to be right in matters on which the established authorities are wrong."

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OfflineMush4Brains
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Re: The economics of ObamaCare [Re: psyconaught]
    #19142917 - 11/15/13 09:20 PM (10 years, 2 months ago)

Quote:

psyconaught said:
i agree the system was broken. You act as if government healthcare is the only answer though.





The PPACA isn't government healthcare, and a two-tier system would allow for private insurance.  I'm not quite sure what you're getting at here.


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OfflineMush4Brains
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Re: The economics of ObamaCare [Re: starfire_xes]
    #19142924 - 11/15/13 09:21 PM (10 years, 2 months ago)

Quote:

starfire_xes said:
Obamacare is going down in flames.  the people hate it, and they especially hate being lied to. 

by the way, you don't expect that the Republicans will bail Obama out do you?  They can't have asked for a bigger gift than what they got.  Obama managed to take a social issue that was completely in the hands of the democrats and hand it over to the opposition. 

If I were a democrat, I would be thinking hard about how to get rid of this incompetent buffoon.




Well seeing as Heritage came up with idea behind PPACA, I'm sure when push comes to shove, many corporatist GOPers will fold.


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Offlineqman
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Re: The economics of ObamaCare [Re: Mush4Brains]
    #19142977 - 11/15/13 09:32 PM (10 years, 2 months ago)

Quote:

Mush4Brains said:
You want to know what would cost the least and serve the most?  Single-payer, two-tier preferably.


:whathesaid:

This we agree on. :thumbup:


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Offlinestarfire_xes
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Re: The economics of ObamaCare [Re: Mush4Brains]
    #19142992 - 11/15/13 09:35 PM (10 years, 2 months ago)

Quote:

Mush4Brains said:
Quote:

starfire_xes said:
Obamacare is going down in flames.  the people hate it, and they especially hate being lied to. 

by the way, you don't expect that the Republicans will bail Obama out do you?  They can't have asked for a bigger gift than what they got.  Obama managed to take a social issue that was completely in the hands of the democrats and hand it over to the opposition. 

If I were a democrat, I would be thinking hard about how to get rid of this incompetent buffoon.




Well seeing as Heritage came up with idea behind PPACA, I'm sure when push comes to shove, many corporatist GOPers will fold.





I didn't add that the Republicans ARE stupid enough to shoot themselves in the foot and squander the poltiical advantage they got out of this.  They've done it often enough, so no reason they should play a smarter game now.


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InvisibleSimplicitry
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Registered: 05/23/09
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Re: The economics of ObamaCare [Re: sytar]
    #19143991 - 11/16/13 02:32 AM (10 years, 2 months ago)

Quote:

sytar said:
So the first point is about catastrophic plans. Those won't even be around anymore, so the "rate hikes" they talk about for silver plans is complete apples and oranges.

Yes, more healthcare will be using healthcare and more of it. Supply and demand says prices will go up. They will. Fortunately, more people will be paying into the system, so that doesn't guarantee that any individual will be paying more. Well, young people forgoing health insurance will be. Unfortunately, since we don't let people die in the street, they are essentially socializing the cost of their healthcare. The same applies to people with inadequate plans who file for bankruptcy. Bankruptcy is quite antithetical to the free market. As far as taxes offsetting gains, of new taxes affecting the public at large I am unaware. Tax rates have largely remained the same, but perhaps they are warning of new taxes on the horizon. Hard to say. Certainly there will be expenses for the subsidies but much of it is right now coming from corporate profits (eg the medical device tax, doctor salaries, medical executive salaries, and others).

You can keep your plan? A lie. Not if you're trying to socialize the cost of your healthcare you can't you cheeky bastard.


Death panels? Yup. They are coming. So what? Other countries have then. They work well. And hey, you can still use private money to buy yourself off of the death panel chopping block. At least for a while, the insurance have death panels of their own. Well, had. They will get them back when the government brings their death panels into play.


Job losses and work hours cut. Yep. Happening. Not very widespread due to transaction costs, but happening. Not a universal phenomenon like the article wants to make you believe.



Still think the ACA is better than what we had. Two reasons: it capped administrative costs of insurance companies at 20%. Medicare runs at 2% so they can do it.

Second is the coverage of preexisting conditions. Haven't heard of a free market solution that can address them. The old system sucked. This one does too. Untethering healthcare from employment would be a good first step. Single payer would be the best final step.




Being young and healthy isn't socializing anything. Forcing young healthy people to pay for services they don't need is more socialist. Women bearing children  and possibly their husband/baby's father, old people, and sick people have higher medical cost of course. Obamacare forces these costs, through socialization, on healthy young men and women by forcing them to purchase a policy from private corporations that they do not need. Sure some would end bankrupt from medical situations, but many more will end up bankrupt from credit cards, bad investment  decisions, job loss, drug addiction and the list goes on.

I'm 31 years old, my family has insurance (that I pay for) because I have a wife and children. But I am healthy and if it were not for my wife and children I wouldn't need health insurance because I've never accumulated more then maybe  $200 in annual healthcare costs.

Now, under ACA, if I were poor with the family that I have some young, healthy and  single schmuck who made better life choices would be forced,  at the end of a government gun, to subsidize my choices by being forced to pay for services they won't have to use or be fined out of their tax return. That's just not justice

Health insurance is a bad investment for almost all young independent people. Things are financially difficult enough for many of these people trying to jump start their lives without having to pay for services they don't need (or more correctly put, paying for social leeches)

Leftists can scream all they want about single payer, but it has never been realistic. Not even their precious  Democrat party who's cock they have lodged firmly in their throat would have ever passed it.

And what is all this nonsense about how shitty the  U.S. Medical system was? Don't we have the best medical facilities in the world?


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"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

I think we should cut all the social parasites from their welfare checks. Then they will either find a means to support themselves or starve to death, either of wich is good for the economy and society.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."

"Islam in a man is worse then rabies in a dog"


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Offlinesytar
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Re: The economics of ObamaCare [Re: Simplicitry]
    #19144419 - 11/16/13 07:28 AM (10 years, 2 months ago)

The fact of the matter is that we are footing the bill for these "young and healthy" people's emergency room visits as it stands. You don't know if someone is going to come and stab you on the street; not having insurance isn't taking a risk with your own finances it is taking a risk with taxpayer money. Given that we as a society have decided against letting people die on the street, how do you propose to stop these emergency room moochers?

And how do you propose to stop the moochers who have inadequate plans and end up filing for bankruptcy? Bankruptcy is just the state deciding to socialize your medical expenses. Emergency room moochers and bankruptcy moochers are the main reasons prices are so distorted. Without these two groups you wouldn't be getting charged 300 for a qtip.


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InvisibleSimplicitry
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Re: The economics of ObamaCare [Re: sytar] * 1
    #19145119 - 11/16/13 12:35 PM (10 years, 2 months ago)

Quote:

sytar said:
The fact of the matter is that we are footing the bill for these "young and healthy" people's emergency room visits as it stands.




Let me make sure I got this straight, you're trying to argue that young healthy people are the ones overburdening the system with E.R. visits? Wow! :laugh2: That is stunningly ignorant.
Quote:

sytar said:
You don't know if someone is going to come and stab you on the street




A business owner doesn't know if somebody may steal his work vehicles he relies on to make a living. Should the government require him to purchase full coverage on those vehicles from a private corporation  or steal $1500 from his tax return if he declines. After all he might end up bankrupt
Quote:

sytar said:
not having insurance isn't taking a risk with your own finances it is taking a risk with taxpayer money.




If I end up bankrupt from any other (note more likely) scenario should that cost be shouldered by the tax payers? No it shouldn't. Medical bills should be no different
Quote:

sytar said:
Given that we as a society have decided against letting people die on the street, how do you propose to stop these emergency room moochers?




Here is a noble concept. Hold them responsible for their debt. Don't allow people to file bankruptcy on medical debt. That certianly more Just then making some young innocent schmucks foot the bill
Quote:

sytar said:
And how do you propose to stop the moochers who have inadequate plans and end up filing for bankruptcy?




See above. Also this is one the weakest arguments used by leftist in the healthcare debate. Why do you ask? Because it ignores the fact that broke people are, well, broke. You can't squeeze blood out of rock anymore then you can wring cash out of a losers pockets. Obamacare can't fix that. Unless you deny bums healthcare or don't allow them to file bankruptcy on those debts then someone is eating that cost. Obamacare doesn't stop the subsidization of failure it enhances it
Quote:

sytar said:
Bankruptcy is just the state deciding to socialize your medical expenses.




It doesn't have to be that way
Quote:

sytar said:
Emergency room moochers and bankruptcy moochers are the main reasons prices are so distorted. Without these two groups you wouldn't be getting charged 300 for a qtip.




Hold the fuckers responsible for the debt they incurred


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"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

I think we should cut all the social parasites from their welfare checks. Then they will either find a means to support themselves or starve to death, either of wich is good for the economy and society.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."

"Islam in a man is worse then rabies in a dog"


Edited by Simplicitry (11/16/13 12:41 PM)


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OfflineMush4Brains
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Re: The economics of ObamaCare [Re: Simplicitry]
    #19145198 - 11/16/13 12:57 PM (10 years, 2 months ago)

Quote:

Forcing young healthy people to pay for services they don't need is more socialist.




I'm not sure if you understand socialism.

Quote:

Don't allow people to file bankruptcy on medical debt.




:rolleyes:


Quote:

Let me make sure I got this straight, you're trying to argue that young healthy people are the ones overburdening the system with E.R. visits? Wow! :laugh2: That is stunningly ignorant.




I think your analysis of what he said is stunningly ignorant. 

Guess what people get at the age of 62?  Medicare.  Old people visiting the ER isn't raising other people's premiums, as they are covered by insurance.

Middle aged people likely have health insurance through their work, or are covered in some other aspect.

So yes, the young, healthy, individuals who do not have health insurance and end up in the ER are part of the problem.



As you can see, rates go down for people over 45, and are consistent from birth until that point.



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InvisibleSimplicitry
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Re: The economics of ObamaCare [Re: Mush4Brains]
    #19145245 - 11/16/13 01:06 PM (10 years, 2 months ago)

Sorry, young & healthy people aren't the problem here. Please try again

What do you have against holding people accountable for their medical debts?


--------------------

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

I think we should cut all the social parasites from their welfare checks. Then they will either find a means to support themselves or starve to death, either of wich is good for the economy and society.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."

"Islam in a man is worse then rabies in a dog"


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