The passage of Obamacare was by fraudulent means. If a business, say a drug company, manipulated information the same way, everyone would go to jail. It is a pity that the purveyors had to revert to fraud, because the fundamental idea of looking after each other is a good one.
There is an important lesson.
You probably did not know of MIT economist Jonathan Gruber until recently. He was an architect of the American medical insurance law known as Obamacare. Video tape of a presentation he made in October 2013 recently came to light. In it he pointed out that they structured the act so it would not appear to be a tax and hid other elements that the people might care about. You can see the entire video here. The comments regarding Obamacare are around the 18 minute mark. His comment:
This bill was written in a tortured way to make sure [the Congressional Budget Office] did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. OK? So it’s written to do that. In terms of risk-rated subsidies, if you had a law which said healthy people are going to pay in — you made explicit that healthy people pay in and sick people get money — it would not have passed. OK? Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get the thing to pass. Look, I wish … we could make it all transparent, but I’d rather have this law than not. (Emphasis added)
While I would like to score this as evidence of Liberal arrogance, there is a deeper concern. The voters really are stupid. Perhaps uninformed, misinformed, or busy with other things, would be more polite but the result is the same.
One of the things the voters seem not to notice is that there are people who will use asymmetric information advantages against them. It is difficult to avoid, but impossible if you don’t try. Be a little skeptical about anything someone tells you where it is to their advantage to have it be so. Know their agenda. The end justifies the means is common thought in political circles, used car lots, and TV advertising.
I recently spoke with an Canadian living in the US. His view is a that Obamacare is a wonderful thing. Not because it is any good, but because by being so inept, it will force an examination of the entire medical care industry. His view is that the medical service part seems to work pretty well, but the cost to administer it and liability costs are out of control.
The bureaucratic search for perfection makes the reasonably good solutions become poor ones. There is no perfect so why reach for it? Especially why if it devalues what you could be doing.
The same thing happens in business. Customers expect more than they can reasonably have and the overhead to provide it consumes a meaningful share of margin. Seek and deliver openness and common sense. Knowledgeable customers are the easiest to deal with. Good solutions are simple and direct.
Just like Jonathan Gruber’s words around the voter apathy issue. Simple and direct.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. Contact: firstname.lastname@example.org