[February 07, 2014]The
Office of Management and Budget has released a report that has
some interesting things to say about the president's insurance
program, Obamacare. As one reads the report from OMB, it depicts the
government's version of the development of the Edsel, a supposedly
"dream car" that would set the trend in automobiles for decades to
Ford had a better idea in the mid-1950s. The
company was going to
"revolutionize" the industry by building a car that everyone would
clamor to buy. There was going to be a fundamental change in the
industry that would close the gap between Ford and
General Motors in the domestic American automotive market.
was developed on paper as an idea and later developed as an
experimental car that moved to production during the 1958, 1959 and
1960 model years. Contrary to the desire, the expectations held by
Ford never materialized. In fact, the rollout never met the
expectations, never gained popularity with the post-war generations
moving into the decade of the 1960s and ended up costing Ford Motor
Co. millions of dollars in losses on Edsel's development,
manufacturing and marketing.
Ford moved from a privately owned company to a
publicly traded corporation in the early 1950s, before the conception
of the Edsel. When the company went public into a corporation, it was
no longer entirely owned by members of the Ford family.
Consequently, the company was able to sell cars by following the
current market trends in the automotive industry, turning back what
the famed inventor and owner, Henry Ford had said years earlier,
"You can have a Ford in any color you like, as long as it is black."
The assembly lines were no longer producing the ideas of the Ford
family, but were now responsible to corporate ideas and postwar
generations of people who were setting the market trends in auto
sales. Ford's idea was to develop a new division with Edsel at its
In the final analysis, however, even with all the hype the company
had centered on the new concept car, it came out with nothing more
than a few bells and whistles that enhanced its appearance, but the
basic model was nothing more than the other Ford-line cars with only
external changes in style.
The public almost immediately turned
against it as being unworkable, more expensive and nothing really
different than what was already available in other Ford products. In
fact, the Edsel was said to have a "vulgar" look about it with a
front grill shaped like a horse collar, or worse. After the third
model year, 1960, the Ford company had to throw in the towel after
having lost millions of dollars.
Now comes the Edsel-like government insurance company, Obamacare, the premier achievement of the Obama administration. The first two
years of his first term, the president and
Democrats completely, politically unilaterally, conceptualized, developed and wrote a gigantic
bill in Congress and passed it to the president to sign into law:
the government insurance policy that was going to be the panacea of
health insurance, Obamacare. It was produced and finally rolled out
in the model year 2013. It may as well have been called "Edselcare"
for the flop it made when all the marketing smoke had cleared.
Obamacare had been touted as the option that would
provide health care to 30 million uninsured people in the United
States. It was an insurance program that would fall short of the
"single-payer" plan the president actually wanted but would still
be better than all the policies the insurance companies were
offering, and more "affordable."
By now, of course, most everyone
knows from experience that the rollout was not nearly as streamlined as the
administration had expected. Once the "market trends" began to
experience their loss of policies, loss of their physicians and less
services than they expected, they began to realize the plan didn't
fit their needs or desires. Younger people who might have already
had insurance discovered they would have to pay two or three times
their current premium since the government plan was expecting them
to pay more to cover the cost of the older policyholders and those
with pre-existing illnesses. They haven't been "kicking the tires"
of the government policy in the numbers the administration expected.
Now comes a new report from the Congressional Budget Office. The CBO has put out a report with an analysis
of the economic and
budget outlook for the next few years. It is a report that
castigates the Obamacare insurance program as a program that will
result in major economic downturns. The unintended consequences of
Obamacare are the destruction of jobs, an increase in spending, and
with the loss of existing insurance policies people had, this is
making actual health care less accessible for some people. The report
refutes the multiple promises made by the president and members of
his administration in the marketing phase of the process
There are several major components of the OMB
report. Projecting the economic impact all the way to the year 2024,
the report claimed that 2.5 million jobs will be destroyed and will
be unavailable to American workers. The hours employees
will be paid to work will be reduced in able to allow the
employer to push the employee out of employer-paid insurance to the
government exchange. When the cumulative number of those work hours
is finally known, it will represent a large portion of jobs being
eliminated. The OMB has projected that the reduction in these hours
reduces the overall full-time equivalency jobs to a part-time
job. The tenets of Obamacare have redefined full time to 30
hours per week and release the obligation for employer-paid
insurance as a benefit.
One of the major benefits claimed by the administration for enacting
the Obamacare plan was to provide insurance to about 30 million
people who have been uninsured for various reasons. The president
has claimed all along that the government had to do something about
the problem with "30 million" people being uninsured.
Now, the OMB's
report indicated that by 2024 there will be approximately 31 million
non-elderly people of the United States without health insurance.
So, the law that intended to rectify that problem is likely not
going to have any effect on the issue at all.
Remember the president's claim, "If you like your plan, you can keep
your plan, period." Well, it seems the OMB reported that millions of
people who liked their plan will eventually lose it and will not be
able to be provided an employer-based insurance plan. Further, the
OMB report indicated that 6 million or 7 million fewer people will enjoy
employment-based insurance each year from 2016 through 2024. That
will result in millions of people being shuffled from their employer
to the exchange, and likely with less hours to work. Of course that
has brought to light another unintended consequence, namely, the
disincentive for people to actually work, but instead, depend more
and more on government subsistence.
The American dream of finding work, working hard, rising up the
ladder to success, keeping a job and experiencing the dream is
predicted by the OMB report to be shattered due a lack of incentive
to find and keep a job being built into the components of the Obamacare plan. The plan provides subsidies for the health plan
purchased through the exchanges. The subsidies will be reduced as
the person increases his or her income (for example getting a second
30-hour job), but will be increased as the person's income falls.
Some people will be financially better off by not working and
earning less since the amount of the subsidy will be increased to
compensate for the loss of the income from the second job.
Finally, some individuals will discover their paycheck will be
reduced through the increase in taxes needed to pay for the
Obamacare plans. Many people have already experienced an increase in
their taxes beginning in 2014. The OMB report indicated that in 2018 Obamacare calls for an excise tax be placed on the higher costing
insurance plans. The OMB projected that the tax will come from those
who work by having reductions in their after-tax compensation. The
only ways to avoid that would be employers switching to a lower cost
plan with reduced health services or passing the cost of the extra tax
to employees who want to keep the higher cost plan. Even if
the employer raises the employee's compensation, the employee will
be subject to a higher income tax bracket.
So, we can only hope the government that has tried to enter the
insurance business by investing taxpayer money to the tune of $600
million just to the software company to build the Obamacare
website, and countless millions more on the rollout, will eventually
see as the Ford Motor Co. saw after the loss of millions of
dollars on their marketing and rollout of the Edsel, and will make the
same decision as Ford made and stop trying to push a product the
market trends have rejected. That rejection is confirmed even by the
Office of Management and Budget.