Please turn on JavaScript

Brooks Wilson's Economics Blog: Wolf on Obama and Obamacare

Tuesday, February 1, 2011

Wolf on Obama and Obamacare

Quoting from the Washington Time’s byline, “Dr. Milton R. Wolf is a board-certified diagnostic radiologist, medical director and cousin of President Obama. He blogs daily at”  As an aside that must be dealt with, I do not care that he is a cousin to the president; it has nothing to do with his qualifications to write on healthcare reform.  His medical degree does. 

Section 2711 of the Public Health Service Act prohibits insurers from establishing annual or lifetime limits of benefits for any insured person or group.  In his Washington Times Op-ed, Wolf finds three problems with our nation’s recent healthcare reform based on the 733 exemptions to section of the act, political corruption, the implicit acknowledgement that healthcare reform increases healthcare costs, and lack of transparency.

Wolf views the granting of exemptions to several cities, Massachusetts, New Jersey, Ohio, Tennessee, businesses and unions including the Service Employees International Union as evidence of corruption.  Without additional evidence, I not only don’t see fire, I don’t even see smoke.  There were 733 exemptions granted.  Perhaps there were 733 applications.  Political donations are reported.  It would not be difficult to statistical estimate the probability of receiving an exemption for those making donations to the Obama campaign and comparing it to the probability of receiving an exemption for those making donations to the McCain campaign.  Until I see more rigorous evidence, I will not consider the allegation of corruption.

The other charges are more difficult to dismiss.  By prohibiting insurers from limiting coverage the cost the amount of claims paid must stay the same or increase.  They will only stay the same if the caps on coverage were set so high that they were never reached.  I believe that this hit low wage earners hardest.  Suppose your job is worth $10.00 per hour to your employer and that you receive this wage in the form of wages at $7.25 per hour and a healthcare benefit valued at $2.75 per hour.  If the cost of healthcare now rises to $3.50 per hour, the employer will either cancel the policy or fire the worker because the cost of the wages and benefits exceed the value of the job.

At best, the  lack of transparency is bad government.  I don’t know what the legal requirements of transparency are, and without additional information, I assume that the administration meets them.  Wolf writes that more than 500 waivers were granted in December but not reported until after the State of the Union.  That is not a high level of transparency from an administration promising new levels of openness.    


  1. Lori Hodges4/2/11 3:48 PM

    Your right. This is not a level of openness. I have read a little on the health care reform and think that the bill threatens to eliminate the one part of the market that is truly driven by consumers being able to spend their own money and make their own choices. That is what makes a market. My concern is that if we read deeply into the plans of the reform, what is it really removing from the current system. Health care is a very necessary part of the economy, but is the new health care system introducing a lot of benefits that Americans can not afford to pay for with their own money. I also feel that the quality care given by doctors will diminish and our preference of doctors will also be affected. The blog made a very good point referencing the 733 exemptions granted… he implies “if Obama’s new health care reform is so good, why are there so many exemptions being issued.” This is a question that I am wondering also.

  2. Belinda Gonzales (macroeconomics student)23/2/11 10:28 PM

    I agree that healthcare will benefit our people but with raising the price it won't. A man recieves good money from a job with benefits the same as the others. But with the differnt types of care being added one can not afford them. One market's benefits incrase and so does the cost. what is the point of all these new benefits if they are not being used.

  3. Pamela Saucedo (Econ 2302 sum2011 MM)24/5/11 3:51 PM

    I have to agree with Belinda and Lori, we can benefit from the health care, I know many older individuals that would, but they cannot afford it. It also depends on what type of health care you can receive, and what it actually does cover, This is a service that everyone needs in one way or another. I also agree that the doctors are now not really putting all their effort into the patients they see.. granted there are some good ones out there still, but most would rather just pass the patient on to someone else say a specialist because of several reasons, which one includes the money it takes to do what is needed.. on both parts, the doctor and the patient being able to afford the services.