The one unintended positive of ObamaCare

I, like anybody who appreciates personal and economic liberty and rational policy, oppose ObamaCare. That does not mean, however, that it does not have any beneficial impact or, along with its many ill-conceived taxes and bureaucracies and nanny state regulations (such as the impending annoyance of having to see calorie counts on every menu), offer a useful object lesson to guide future policy.

If Jonathan Gruber, despite his apologies for being rude, is correct that American voters are both stupid and selfish, it will be intellectually difficult as well as politically risky for Republicans to point out such object lessons — not least to each other.

But it’s worth a try.

{mosads}And recent data about the declining growth in total healthcare spending (which doesn’t mean total spending is declining, nor does it mean that health insurance premiums are not still rising — quite rapidly in certain categories of plans) are worth talking about.

When faced with data about slowing increases in spending, Republicans rightly point out that there has been a tremendous amount of cost-shifting through taxes and subsidies and that lower direct spending on healthcare is offset by higher insurance premiums.

And while high premiums are indeed an important issue for family and company budgets, when it comes to changes in healthcare consumption by Americans, a key factor is increasing copayments and deductibles, which are causing people to consider healthcare slightly more similarly to how they consider other services they purchase: that it has an actual cost, and that sometimes the cost may not be worth it.

In other words, if going to the doctor is going to cost you $100 instead of $25, you won’t go unless you really think you need to. The same thought process applies to more expensive items such as minor (or not so minor) surgical procedures when holders of insurance policies might now face a maximum $5,000 annual out-of-pocket expense when it used to be $1,500.

So, the growth in healthcare spending may be slowing because Americans are choosing to skip or delay medical care.

Liberals may complain about that effect of ObamaCare, but isn’t such a result exactly what this country needs to get off the track of national healthcare bankruptcy?

If you give people something for “free,” they will consume too much of it. And when that thing is not only not free but actually tremendously expensive, the only way to pay for it is to take money from others. That is the nature of insurance generally, but it is massively amplified by over-generous insurance policies (including many unions’ so-called “Cadillac plans”) and income redistribution through subsidies.

If conservatives want to reduce the redistribution and poor economic incentives which come from people being insulated from the costs of their own healthcare consumption, they must be willing to say “It’s a good thing that people have to spend more of their own money rather than other people’s money on healthcare.”

There is good economic policy, however, that accompanies the more free-market position: increasing the use of Health Savings Accounts (HSA). In short, an HSA allows tax-deductible contributions into an account which can then be used to pay for healthcare (but not for insurance premiums). An HSA allows someone the comfort of taking on a less expensive plan with a high deductible by saving money to cover the deductible should the need arise.

The tax benefit is great incentive to save but the fact that the account has your name on it makes you think about whether a particular visit to the doctor is really worth spending your money on.

By making Americans actually feel the cost of their own healthcare, ObamaCare is having a modestly beneficial impact on overall healthcare spending. Americans are used to getting things for “free” and it’s hard to explain to them why that’s neither economically nor morally sustainable.

Republicans would do well to continue this particular lesson when they look to repeal, replace or (less desirably) reform ObamaCare in coming years.

Lest anyone think I’m actually complimenting Obamacare, it is worth noting that this particular beneficial effect seems more to be in spite of the law than because of it. ObamaCare explicitly implements policies which would tend to increase the use of healthcare services and decrease the use of HSAs.

ObamaCare institutes “free” preventive medicine procedures, checkups, etc., under the dubious theory that such services actually lower overall healthcare costs. Smart health insurance companies already offered some of these things, such as vaccinations, for free. But government mandates which widen “free” services are bad, or at least unproven, medicine. So is requiring that insurance policies cover items which most people will never actually need.

Furthermore, ObamaCare imposes restrictions on the use of HSAs, such as no longer allowing the money to be used to buy over-the-counter medicines without first getting a prescription. It was a close call whether HSAs were going to survive ObamaCare at all, but they did — barely. Democrats oppose them for the very reason that they are good policy: The left wants people to believe that healthcare is, or should be “free,” which is to say paid for by the government — which is to say paid for by other taxpayers.

We still spend too much on healthcare — about $9,255 per person in 2013 and about 17.4 percent of our gross domestic product, with nearly half of all spending coming from government — which is not known to prioritize cost savings — and thus the biggest threat to our national fiscal health. This means that “bending the curve downward” remains one of our highest priorities.

When it comes to lowering healthcare spending, the only thing that ObamaCare does right is making people spend more of their own money when they go to the doctor. It’s not going to be popular for politicians to say out loud (and Democrats don’t even believe it), but the benefits of making people think about what’s worth spending money on and what isn’t — and reminding them that not everything healthcare-related is in fact worth it — is a good thing.

Kaminsky is a fellow of the Heartland Institute and a talk show host on 850 KOA in Denver.