"Obamacare was broken from the offset": Expert reveals reason

Congress is now debating an extension to the temporary tax credits for Obamacare. Joining us to discuss is Tony Kennet, national correspondent at the Daily Signal and host of the Tony Kinnet cast radio show and podcast. So Tony, good to have you here. Um some numbers here. Uh Obama premiums had already doubled since uh 2013 and by 2025 they were up nearly 133%. So what do you say about this? What is the fundamental cause? >> Well, the fundamental cause, Don, good afternoon to you, uh, is that the system was broken from the offset. The very framers of Obamacare, those legal analysts they pulled together to write the original Affordability Care Act options, uh, admitted that it was doomed to fail from the start. Uh, there are those who believe there were political motives. There are some who just said that it was a a kind of halfway between corporist and socialist policy gone wrong. The fact of the matter is it didn't work for Americans. We were told it was going to be amazing and it has failed. and has needed to be propped up by bigger and bigger subsidies. So the question becomes, are we just going to subsidize it from now into eternity and therefore drive the cost to American taxpayers or are we going to reframe an entirely new system? Somewhere in the middle of that, Don, is the question is how do you limp America off of the Affordability Care Act, the Obamacare system? You have to do it one way or another because if you just cut it off, you know, it's a big rug pull, let's say, then it's going to cause some severe disyspsia in the market. And most importantly, those who don't spend their days paying attention to this 24/7 in news coverage, they're not going to know until their coverage has expired and they need medical care right away. So, this has to be done with a scalpel, maybe more than a sledgehammer. >> So, Tony, could you just address uh one argument here? Could the reason for the rise in cost of in Obamacare premiums because of already high pharmaceutical prices and overall inflation in the health care sector? >> Uh I think that in in a way that if your leg was broken, you might also have a stubbed toe. Yeah, sure. Rising costs in pharmaceuticals could be a a considerable issue. Uh but the main issue is that the Obamacare subsidies are directly funding insurance companies. So they can just send the premiums higher and higher and higher. After all, your client's not going to pay those premiums. the insurance company is going to pay those premiums uh or or request those premiums paid by the federal government. And so if you are, let's just pick a random insurance company out of thin air, Sigma, for example, Sigma will take a claim and they will say, "Well, you're on the Affordability Care Act, so therefore we will charge the government $4,000 where if perhaps that I was brokering one-on-one with Sigma, again, I'm just picking a random insurance company. I'm not saying anything about Sigma, just the first one that popped into my mind, then there would be a lower price negotiated." So this is one of the ways uh and reasons why the Trump administration is currently looking at health savings accounts and funding the employer provider of health care or Americans themselves directly for uh going into that insurer market. When you have a middleman, the middleman tends to do it all middlemen do. That's up the cost both ways because after all they're doing the facilitating, so why wouldn't they charge more? >> So Tony, can you just talk a bit more on what uh customers are getting out of this? How much choice does Obamacare provide to patients and what about the health comes uh health outcomes compared to private insurance? So uh great question. The different sections and slivers of the Affordability Care Act, the different tiers in the model uh don't provide the best care. In fact, there are those who can't get doctors that they had before the Obamacare, which again is ironic considering the uh if you like your doctor, you can keep your doctor lie. Uh, of course there's a system of care that link insurance networks to certain care facilities. For example, I uh because of the reframing of the insurance market that came about as of Obamacare, even not being on the Affordability Care Act myself, I now have to travel dozens of miles just to get certain kinds of blood work done. And those who are on who are glued to the Affordability Care Act program, they're lucky if again out in the western United States if they can even find care in their county or their section of the state, their congressional district for crying out loud. So when we're looking at the reforming of the health care system in the United States, understanding that government subsidized programs have resulted in less choice as they always have for every program throughout history. They've resulted in less efficiency and therefore they have resulted in a lower standard of care. We can see this from the UK to Canada. Throwing government money at something is how you end up getting toilets that cost $45,000 and a nail that costs upwards of three grand. >> So Tony, you talked about uh indefinitely subsidizing the program. Uh some more numbers here for you and our viewers. Uh so subsidies have climbed to an estimated $138 billion per year and on top of that 80% of people are just paying $10 a month. So, I mean, uh, how sustainable is this in the long term? >> It's not, uh, because again, as costs continue to rise, as insurance, uh, companies continue to eat up subsidization money, which by the way, I don't care what industry you're talking about. This is always how subsidization works, especially, we've seen this in military contracting or governmental construction contracting. That's what I was alluding to earlier with the expensive uh, toilets or scandal from the early 90s, the expensive hammers and nails of the early as the late 90s. the the idea that the subsidization can ever get smaller naturally has never occurred before and so it has skyrocketed. You see this exponential curve on the chart of subsidization money funneling into the Affordability Care Act for more and more people to sit in that and only pay $10 a month. It's an incredible tax burden, but more so it is a major hamper on the industries themselves because you're slowing down efficiency, which also compounds how expensive something is. So filling out 236 forms so that you're government compliant. You've paid $10. The system is being taxpayer funded out the wazoo. It's horribly ineffective and harmful for Americans. >> So Tony, I just want to end this conversation with um potential solutions here. Do you think we should try to mend Obamacare's uh shortcomings or should we replace it completely? What are the options? >> I mean the honest answer is if it's worth doing, it's worth doing right. uh we actually need to see a system in which the government deregulates the health care market uh in which case I am able to actually go and broker a price between my local doctor between my insurer. There's no reason that in several states around this country nurse practitioners need a doctor to look over their shoulder to provide acceptable care. You could deregulate a lot of this and get the middlemen out and then there wouldn't be a need for heavy subsidization. uh there should be tax breaks for health savings accounts for individuals who are spending money towards their health care expenses. These are common sense fixes that we have seen work in other countries around the world. I do think we're going to have to stair step off of this just coming from the education uh field and science fields myself. When you cut a government program, you need to relax and phase out the program. Otherwise, you rug pull the people who are on it who, given that it's a health care program, may not be in the best mental or physical state to readily change to a brand new program right off the bat. If you're going through a major series of surgeries and your healthcare suddenly ends, a rugpool is not the best option. A phase out's more well, I mean, humanitarian for crying out loud. >> Well, all right, Tony. Well said. Good to speak with you today. Thank you, >> Don. Always a pleasure.