Awaiting the Administrative SNAFU


The above chart was used in the healthcare debate to illustrate the bureaucracy that the bill would introduce. Apparently nothing relevant has changed and 159 new agencies and bureaus will be created. It completely defies logic and history that this complex set of regulatory, personnel and factual decisions will produce a rational, intended outcome.

Those banking on the implementation of the healthcare take-over to increase its public support are betting on a lottery ticket in a rigged drawing. Many discretionary decisions must be made under the new law by people that are yet to be appointed, trained, or identified. One of the first "Polish jokes" I learned in Poland was the tale of the new potato inspector. The young man was briefed on what are good and bad potatoes and given a pile of several hundred by his supervisor. He was told to sort them as instructed. Hours later the supervisor returns and see that only eleven potatoes have been sorted. He demands to know why. The young inspector-trainee simply replies: "Every potato is a decision."

No one can imagine the number of decisions or their consequences from the bureaucratic nightmare set out in this boondoggle. We already know that the doctrine of unintended consequences is alive and well in the act. Employers will be incentivized to drop health plans and pay smaller penalties ($750 per employee) in lieu of continuing their employee coverage. Major subsidies to employers cut off at 26 employees, so there is a build-in incentive to keep hiring lower. And, of course, it will be increasingly tempting to move facilities across borders to lower operating expenses. But hundreds of other discretionary decisions of what to include in approved plans, what to tax, and other "command-and-control" mechanisms will replace individual market-based decisions.

We know that the catastrophic insurance option (which is a cost-effective way to cover the risk of major illness), will disappear over the phase-in period, because it will not meet all of the coverages demanded as an "approved plan." Do millions of Americans even know that they will not be able to select the type of insurance that fits their needs anymore? What will the reaction to "one size (and only the most expensive size) fits all"?  Obviously millions of young workers have no idea that they will be compelled to buy insurance, especially insurance that covers things that present no health or economic risk to them. Add to this basic inequity built into the act that fact that some bureaucrats will decide what has to be covered and the makings of a disaster seem to lurk under every arrow in the chart.

Imagine the regulations that have to be promulgated. Litigation over the regulations?

Now interpose a Republican House and maybe a Republican Senate that will use every turn of events to stymie the program and advance the cause of repealing it in whole or part.


Anyone who thinks that it was a good idea to try to do a whole-cloth remake of American healthcare against the wishes of a clear majority of American likely voters will obviously join the ranks of fans of the tooth fairy. The new system will not implode, because it will never get to the point where it has enough internal pressure to inflate.

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