Conservatives fought hard against the weekend, Social Security and Medicare when they were proposed. But once enacted, both Republican and Democratic Presidents and Congresses have embraced all three as they became part of American life.
So we can expect Obama's complex, compromised health care reforms -- which transfer responsibility for paying for uninsured people's health care, from hospitals and doctors, who passed costs to the public through higher fees, to taxpayers, who will pay for expanded health insurance -- will continue, even if Republican Mitt Romney is elected President.
Veteran Philadelphia investor James M. Meyer, of TowerBridge Advisors, wrote a thoughtful account of the costs, purpose and likely durability of "Obamacare," in a note sent this morning to clients of West Conshohocken-based investment brokerage Boenning & Scattergood. Highlights:
"For the supporters of ObamaCare, [Thursday's Supreme Court decision upholding the law] was a big victory. Essentially they got what they wanted... To us, the legal issues are an interesting curiosity but the more important implications are the economic consequences.
"In the short term, the fact that the law stands means that the tax surcharge on investment-related income for higher-income individuals kicks in on January 1. So does the tax for medical device manufacturers," despite attempts of Congressmen whose districts include medical-device factories, like US Rep. Jim Gerlach, R-Chester-Montgomery-Berks, to erase the tax.
"Over the next decade, ObamaCare is estimated to add an additional $2 trillion to our [tax-funded] health care bill. Most of that cost will be to cover Medicaid expansion and to subsidize the insurance exchanges that will be established to offer insurance to those who don’t get it through their employers or through some other mechanism.
"The law was all about expanding coverage, not reducing costs. It does set up trial ways to try and deal with costs but mandates little or nothing. Now that the law has passed muster with the Court, Washington has to begin attacking costs.
"Republicans want to repeal the law. Indeed, the House will vote on or about July 11 to try and do just that. Almost certainly a repeal bill will pass but just as certain it will die a quick death in the Senate.
"Mitt Romney has suggested that repeal of ObamaCare would be his first Presidential initiative if elected. But that is probably just rhetoric.
"Outright repeal without a realistic alternative isn’t going to sit well with the public. Few want to go back to a world where insurers can simply reject high risk patients, where people can’t move jobs for fear of losing coverage, or where children under 26 can no longer be covered on their parent’s policies.
"Instead, what are needed are mechanisms to make our health care system more cost efficient. That requirement is going to be the same whether Obama or Romney is elected.
"Any proper program has three requirements. First, payments have to be outcomes based. The current cost-plus system simply rewards suppliers to offer more and more services.
"Second, the patient needs to have an economic stake in the decision to spend money on health care. In Medicare Part D, one chooses a drug plan that best suits [one's] needs. It is an annual decision. It has proven to be a very efficient program and can be a model for others. Voucher systems work. There is no one right answer other than to say that cost-plus doesn’t work. Third, individual efforts to stay healthy (e.g. exercising or losing weight) should be rewarded.
"The medical ecosystem is going to push back. Doctors don’t make money if they don’t see you, hospitals don’t make money if you don’t go, and drug companies make more money if you pop more pills.
"Proponents of high cost medicine will use fear terms like “rationing” to scare us all. But we all know that effective health care isn’t the same as more care. Nor is it necessary to do in a hospital what can be done in a doctor’s office," as throways tests and online data-sharing and other cheaper decentralized methods start to proliferate.
"We can save trillions if we try. We have to. And we are going to move in that direction no matter who is elected President because it is it is the only possible way to regain fiscal control of our economy. Both Romney and Obama understand that." [Emphases added]