Scott Yenor, Ph.D., is a professor of political science at Boise State University. In an exclusive interview, he spoke with IdahoReporter.com about what he believes will be the likely fiscal impact of the federal Obamacare law as well as the anticipated operation of the Idaho state-based insurance exchange.
IR: President Obama and some members of Congress sold the Obamacare agenda to the American people by promising that it would make health care more plentiful and less expensive. President Obama said himself that the agenda would “bend the health care cost curve downward.” Yet the impact of Obamacare is completely opposite of what it was supposed to be. Why is it panning out this way?
Yenor: The concept of Obamacare is to provide health care to those who didn’t have it before. In order to pay for that, there is an increase in costs for those who have it currently, with the hope that those who offer it currently (employers who offer health insurance to their employees) will continue to provide it, even though the cost of it is going up and up.
So what is going on is that in order for insurance companies to offer “free” care, or discounted care through the state exchanges, they have to transfer the costs of that care to those who are providing it already. So everybody’s insurance rates are going to go up, and everybody is going to be affected by the implementation of Obamacare.
IR: So what you’re saying is that the money to pay for Obamacare has to come from somewhere and those of us who are paying cash out of pocket for health insurance and those employers that are paying to provide their employees with health insurance, those of us in this category are going to pay more so others can receive insurance for less, or perhaps no cost at all. Is this a fair, thumb-nail sketch of what you’re saying?
Yenor: That is exactly right, yes.
IR: The idea of the Idaho insurance exchange was that if our state creates its own insurance exchange, we would isolate ourselves from the federal government’s intrusion in our insurance markets and keep insurance rates low and keep the health insurance decisions of Idahoans all in Idaho. It doesn’t appear to be panning out that way. The Idaho insurance exchange looks as though it will be controlled by the federal government every bit as much as anything else with Obamacare. What are we to make of this? How is Obamacare impacting Idaho and is there any difference between the state insurance exchange and Obamacare?
Yenor: I don’t think there is a difference. Obamacare is part of this larger federal-state arrangement that we’ve had going on really over the last 50 years and the arrangement is bankrupting the country and the states. Putting it as simply as I can, we have the national government functioning as a tax collector and the state governments are spenders of the federal government’s money. And there is no discipline on the state governments to limit the amounts that they spend because they get “free money,” or so it seems anyway, from the national government. This has been bankrupting our Medicare system in Idaho, but all over the country as well, because states have been expanding Medicare and Medicaid offerings, and keep getting 80 cents on the dollar or 60 or 70 cents on the dollar from the federal government to pay for these expanded offerings.
So we have the states and the federal government cooperating in bankrupting each other. We call this “cooperative federalism” in the business of political science and the state exchange is another example of this cooperate federalism. So Idaho can run its own exchange but really it will all be under federal regulation and direction. There will be very little movement or independent judgment that Idaho will exercise as it operates its state exchange.
IR: It appears that the insurance companies, which will have their policies bought and sold on the exchange, will also be recipients of some of this “free money” that you noted, at least in the short run. Is that a part of the equation?
Yenor: Yes, in the short run, the insurance companies might like Obamacare. But once the fiscal realities of Obamacare come into full view and once more and more employers dump their employees onto the state exchanges, the exchanges will become unsustainable and some sort of great national governmental control is going to happen. Insurance companies will then either end up being regulated like a public utility, or they will just end up out of business and all health care will ultimately be run by the federal government.
President Obama, before he became president, said that this was the ultimate aim of health care reform, to have an entirely government controlled system. And recently, Sen. Reid (U.S. Senate Majority Leader Harry Reid, D-Nev.) said that this was his aim, and that Obamacare is just a step on the path toward a government-controlled system. So in a way, the private insurance companies have made a deal with the devil.
Note: IdahoReporter.com is published by the Idaho Freedom Foundation. Dr. Yenor is a member of the board of scholars of the foundation.