It's time to open our eyes.
Unfortunately, not many analysts or any economists are talking about the economics of Obamacare. We are too busy talking about its cost and whether it is accurate. The government could not seem to figure out what the sign up number was, and now all of a sudden they are so precise at 7.1 have signed up. I find this comical.
These 7.1 million people have put health insurance in their shopping cart but have yet to pay for it. Only about one-third of them were currently uninsured. I suspect that a vast majority of this number are new entries onto the roles of Medicaid, which, down the road, will have an impact on states. And here's what the numbers aren't showing yet: How many people have lost their insurance? How many people, like my wife and me, have seen the monthly cost of their healthcare coverage double?
All this is having a dramatic impact on the economy. No one seems to be taking into account that all this increase in coverage is coming out of the pockets of Americans when we desperately need people to be spending that money into the economy. The Cleveland Clinic reported this week that 75 percent of healthcare coverage has increased in cost for the average person. If this is accurate, it means that 75 percent of American citizens have less money in their pockets today than they did a year ago. We seem to ignore the fact that 71 percent of our GDP depends on American consumers consuming goods and services. This has become harder and harder to do when we continue to lose discretionary income to healthcare. This is not to mention the discretionary income that will be lost because of high deductibles and co-pays. All this will have a far greater negative impact on the economy than will higher gasoline prices-even though higher gasoline prices affect a larger segment of the population. Obamacare will slow or, at best, maintain the stagnant economy because we are robbing Americans of discretionary income.
All this is on top of the fact that when inflation is factored in, the median income of families has been going down and is at the lowest level since 1973. Of course, the government is trying to do everything possible to make it more attractive once again for Americans to begin taking on debt through credit cards and other kind of debt in order to grow the economy. Yet our savings rate is maintaining at around 4.5 percent, which is high for America.
And let us not forget that we are creating new bureaucracies in the government in order to administer Obamacare. According to the original bill, around 132 new bureaucracies would be added, but over the next three or four years, the government will grow dramatically because of the administration and management of our healthcare.
If the economic implications of Obamacare are not scary enough, think about the government now managing your health care. They are still trying to figure out how to manage a rail system. Over the years, the government has proved its inefficiency and ineffectiveness in managing anything other than the national defense and our military.
As huge as the economic repercussions promise to be, I believe that the biggest issue with Obamacare will be a quality of care issue. I still believe that by the 2016 elections, everyone will know someone who has been denied care, has died, or has received a late diagnosis because of Obamacare. This will change the political landscape dramatically
If you can't visualize the problems Obamacare is bringing to the quality of care in our healthcare system, you will see them clearly by the end of 2016. And the economics of Obamacare are creating more debt that will be placed on the backs of our children and grandchildren, and more unfunded liabilities on top of the current $100 trillion in unfunded liabilities. Every day we see what used to be our "normals" changing dramatically. We continue to lower the bar and expectations on all growth in all sectors of the economy.
Yes, Obamacare is and will affect the quality of our healthcare and our economy - on many levels. We are not an economy that depends on exports; we are an economy that depends on consumer spending. Lower fuel prices may offer some offsets to this additional cost and the loss of discretionary income because of healthcare, but we still have been refusing to embrace the new energy revolution that could change our economy for the better.
It's time to open our eyes to the whole picture. It's not a pretty one.