Getting some of that ObamaCare

A San Fernando Valley woman has posted an apology to President Obama in the Los Angeles Times.  At one time, she had criticized Obama:

I was pretty mad at Obama … I had changed my registration from Democrat to Independent, and I had blacked out the top of the “h” on my Obama bumper sticker, so that it read, “Got nope” instead of “got hope.” I felt like he had let down the struggling middle class. My son and I had campaigned for him, but since he took office, we felt he had let us down.

But then she learned about the Pre-existing Condition Insurance Plan (PCIP) created by ObamaCare, which is tailor-made for her needs as an uninsured Californian with breast cancer.

I have tremendous sympathy for this woman, who was facing breast cancer at a time when her husband’s COBRA had long since run out, and the family had been unable to afford insurance for several years.  Health insurance is very expensive in California, as a result of the state’s penchant for overregulation, public subsidies, and rent-seeking.  All insured health-care transactions in the Golden State contribute in one way or another to the gigantic state health-care apparatus, which endlessly drives up the cost of everything in the “private” sector.  (This squeeze has produced a mushrooming medical-services industry across the border in Mexico, as well as causing a growing number of practitioners in the state to operate on a cash-only basis – no insurance accepted.)

But PCIP is a superb example of how ObamaCare was frontloaded with goodies to attract constituencies.  Because if the Valley Gal were to read the fine print on PCIP, she’d discover that the program ends on 31 December 2013.

California administers the PCIP using ObamaCare funds.  Here is the information from the California PCIP website (emphasis added):

As a result of the federal Affordable Care Act of 2010, California has a contract with the federal Department of Health and Human Services to establish a federally-funded high risk pool program to provide health coverage for eligible individuals. The program will last until December 31, 2013 when the national health reform is set to begin. After that date, there will no longer be a need for high risk pools because federal rules will not allow insurers to reject persons with pre-existing conditions or charge them higher rates than those without such conditions.

The federally-funded program is called the California Pre-Existing Condition Insurance Plan (PCIP). The PCIP offers health coverage to medically-uninsurable individuals who live in California. The program is available for individuals who have not had health coverage in the last 6 months. The California PCIP is run by the Managed Risk Medical Insurance Board (MRMIB).

California actually already had a high-risk insurance program, before ObamaCare was passed.  The Major Risk Medical Insurance Program (MRMIP) became operational in 1991, and at one time served over 27,000 Californians.  Spiraling costs (partly due to legislative increases in plan benefits) meant the plan had to increase premiums and cap the number of participants at around 14,000.  In 2002, a 36-month limit was imposed on participation in MRMIP, with the proviso that MRMIP insurance providers would guarantee the offer of insurance to termed-out “MRMIP graduates” at 110% of the cost of their MRMIP premiums.

Loosely tethered to some semblance of fiscal accounting, MRMIP is definitely more expensive than PCIP in terms of monthly premiums.  Through 31 December 2011, for example, the woman in the San Fernando Valley can get PCIP coverage for herself for $306 a month, compared to the $480 she would have to pay Kaiser Permanente under MRMIP, or the $797 for a PPO plan with Anthem or Blue Cross under MRMIP.  And in January 2012, the MRMIP premiums are scheduled to increase.  The PPO plan premiums will go up to $865, and the Kaiser Permanente premiums to $516.

But that’s just something states and private companies have to do, because they face bad consequences if they don’t exert some control, however slight, over the gap between their revenues and their expenditures.  ObamaCare is subject to no such pressures.  Hence, it was able to lower PCIP premiums for Californians by an average of 18% in August 2011, because, as explained by the California administrators,“We want to make sure that everyone who qualifies for this program has access to its benefits and is not deterred by price.”

Presumably, ObamaCare, like Obama Money, comes from Obama’s Stash. It has certainly bought an apology from a Democrat who was previously angry enough at the president to switch to Independent; it may well buy her vote next year.  But the joke on her will not be a funny one.  PCIP ends on 31 December 2013, and what will happen after that is that premiums will go up – for everyone.  But services will also be restricted, for everyone who contracts for medical care using “insurance.”  And those are just the direct, first-order consequences.

The Valley Gal will find herself increasingly subject to state bureaucrats who get to decide how much she has to pay for her health “insurance” – which will actually be a state-run health plan over which she has no discretion – based on her income and assets.  Up to now, even in the wildly overregulated health care environment we have today, middle-class householders have been able to make choices of their own by maintaining private insurance at their discretion.  But it is “insurance” itself that is being subverted:  under ObamaCare, “insurance” is not a ticket to independence but a means for the government to exert control over the middle class.

The process of subverting medical insurance began decades ago, as alert readers will no doubt point out.  But ObamaCare takes it across the finish line with the insurance mandate.  Under no circumstances is the premium-cutting, welcome-all-comers PCIP model sustainable – and without a mandate, its unsustainability will blow up all over the Obama Stash program very, very quickly.  There’s nothing behind the politically deceptive PCIP premium-cutting except the future earnings of millions of people who have other plans for their money – if they’ve even been born yet.

Will Obama get his mandate?  The Supreme Court will make one decision on that before the 2012 election.  Americans may or may not accept it, if it goes the wrong way.  But one thing is for sure: as provided by the “Affordable Care Act” itself, PCIP will cease providing access to medical care in exchange for unrealistically low premiums in a little over 24 months.  I’d strongly suggest no one build his or her life around it.

J.E. Dyer’s articles have appeared at Hot Air’s Green Room, Commentary’s “contentions,” Patheos, and The Weekly Standard online.