Commentary Magazine


Democratic Governor Dissects ObamaCare

Tennessee Gov. Philip Bredesen in an op-ed today explains:

Our federal deficit is already at unsustainable levels, and most Americans understand that we can ill afford another entitlement program that adds substantially to it. But our recent health reform has created a situation where there are strong economic incentives for employers to drop health coverage altogether. The consequence will be to drive many more people than projected—and with them, much greater cost—into the reform’s federally subsidized system. This will happen because the subsidies that become available to people purchasing insurance through exchanges are extraordinarily attractive. …

For a person starting a business in 2014, it will be logical and responsible simply to plan from the outset never to offer health benefits. Employees, thanks to the exchanges, can easily purchase excellent, fairly priced insurance, without pre-existing condition limitations, through the exchanges. As it grows, the business can avoid a great deal of cost because the federal government will now pay much of what the business would have incurred for its share of health insurance. The small business tax credits included in health reform are limited and short-term, and the eventual penalty for not providing coverage, of $2,000 per employee, is still far less than the cost of insurance it replaces.

As more Americans flood into the public system, the cost of all those additional highly subsidized patients will skyrocket. The cost of the new entitlement will balloon, as will our deficit.

Now, this is smart analysis by a Democrat. Could not senators and congressmen have seen precisely this result? Of course they could have — conservative analysts predicted this precise phenomenon. But the rush was on to pass something — anything — and call it “historic.” The result is not only politically distasteful but fiscally untenable. The move to repeal ObamaCare will, I think, have many Democratic advocates as Bredesen’s take becomes the new conventional wisdom. Well, that and the 2010 election returns should do the trick.