“Re-Peeling” Health Care Legislation

After “passing” health care reform – like passing a kidney stone – the Obama administration is hard at work re-framing the debate, much like a used car salesman following you home after buying a lemon to make sure you understand the car did come with new tires.

The reframing goes something like this: “can you believe those uncaring Republicans want to repeal free health care for all Americans …,” followed by a list of benefits with which any reasonable human being (including most Republicans) would agree. What they do not list is ALL the bad stuff, with which no person would agree, unless you were a Marxist. For example, a minimum of $2.5T in additional debt, 182 government agencies between you and your doctor, cuts in Medicare of $500B, 4 years of taxes before benefits really kick in, and a litany of other unintended (or possibly intended) consequences that are just starting to come out.

Within days of the bill’s passage, several major corporations, including AT&T, Caterpillar, Deere, and others are setting aside between $31M to $1B in one-time, current quarter charges to cover unfunded liabilities that they will incur because of loss of deductibility of certain pension related deductions. In all S&P 500 companies will take a combined hit of $4.5B to first quarter earnings, estimates David Zion, an analyst with Credit Suisse. Of course the administration says that these firms are exaggerating the impact of the loss of these deductions. Bottom line, companies will be less profitable and have less capital to invest in a market that is trying to find a bottom and put people back to work.

So, before the Obama administration has too much time to reframe the debate and repeat the lie for months, thereby moving it from opinion to truth, I want to do some reframing myself. My narrative goes like this: The benefits of Obamacare have much in common with crack cocaine: once you get on it, you’ll love the high, until your health fails and you run out of money. But not to worry, the administration is working on a clean needles program so that we can comfortably rest assured we will not catch a “bad” disease administering a fatal overdose.

The healthcare legislation needs to be “re-peeled:” common sense and market based approaches can achieve better benefits at lower cost.