Sarah Kliff wrote a very nice article, “The last time the government expanded health care, it was also kind of a disaster”, about the last time the government expanded health care through an online exchange. She highlighted some of the problems when the government launched online shopping for the prescription drug program and pointed out that “about 90 percent of seniors say they are satisfied with their Part D coverage”. Unfortunately that is where the comparison starts to fall down. When the government expanded Part D there were a lot of “winners” and very few “losers”.  At the end of the article she quoted an expert who said, "They don’t remember the glitches in the first weeks of getting coverage. It’s the coverage that sticks with people." That is why this time it is different.

When you focus on the coverage there are a lot more “losers” in this “reformed” individual health insurance market. Most of the people who purchased health insurance in the individual market in prior years are in for a nasty surprise.  The vast majority of them are healthy and their insurance bill just went up. For those who have had their plans canceled and are now forced to use the exchange to find a new plan, they have found that the closest substitute to their plan costs 100% higher in the exchange. In many cases their existing plan is better and cheaper but they are being forced to pay a disproportionate share of society’s burden to care for the less fortunate. The Affordable Care Act supporters just whipped the sleeping dog and are now wondering why people are unhappy? The bottom line is that individual market reforms are not fair and even the Affordable Care Act supporters agree that there is a high likelihood that these health insurance reforms will not work. Health insurance was a product created for the middle class. The high income folks do not need it and the low income folks have more important things to spend their money on. At some point we have to recognize that this feeble attempt at Schumpeter’s creative destruction is not working. What we have gotten instead is plain, old destruction any idiot could conjure up and a new entitlement system that no one can control.