by Prof Michael Boskin of Stanford. Let’s establish his perspective: he’s a conservative who served in the HW Bush administration. Nevertheless, he’s an honest academic, and his Op-Ed in the Wall Street Journal earlier this week nails it.

Key points:

– the ACA model is inherently defective as it treats all insured equally, which violates the very principle of insurance, in that risks are socialized according to the proportional value of that risk across the insurance pool.

Bromley analysis: the easy analogy here is charging all homeowners hurricane insurance, regardless of whether one lives in, say, Idaho :), or coastal Alabama.

– on top of charging low-risk individuals high premiums and forcing them all to buy into the program, the only way ACA can afford itself is by limiting and entirely centralizing costs, i.e., doctors, hospitals, pharmaceuticals, etc.

Bromley analysis: Big Health, especially the insurance and drug companies, all lobbied for ACA, because figured 1) Congress was going to do something about health care so they’d better play ball; and worse, 2) they got greedy, realizing that centralized systems require centralized providers, and smaller competition would lost out in a centralized, price-controlled system, leaving only the big companies. The exact same thing happened during the 1930s with the automobile industry, as FDR’s “planned” economy forced out smaller manufacturers, leaving only a few large ones left. Think GM and you will understand where the health care industry is going with ACA inside of 30 years — only without Honda, Toyota, etc. to offer alternatives to crappy Detroit cars.

– ACA rules will push workers into part time jobs. We’re already seeing this — and the reaction to it in the renewed push to raise the minimum wage.

Bromley analysis: It all leads to higher and permanent unemployment, especially for unskilled workers.

– “Supply side” effects will include fewer doctors and nurses choosing to work within the ACA / Medicaid/Medicare systems, and instead opting out for strictly private practice which most people can’t afford.

Bromley analysis: think your DMV experiences, cuz that’s where we’re headed with this law. I asked a wealthy friend in London how he likes the socialized health care in the UK, and he laughed at me. “What? Nobody with money uses it. We all go to private doctors while everyone else has to wait in line.” These systems further divide the classes, and do nothing to punish the wealthy.

What I like best about this article is that he actually offers solution, per his final paragraph:

 sliding-scale subsidies to help people buy a low-cost catastrophic plan, purchasable across state lines, equalized tax treatment of those buying insurance on their own with those on employer plans, and expanded high-risk pools.

Bromley anaylsis:

– low-cost catastrophic plans = low monthly premium with high-deductibles
– across state lines: current federal law prohibits sale of similar plans across states
– equalized tax treatment: current federal law only allows “expensing” of health care costs as a tax deduction for businesses and not for individuals. Yes, that’s crazy, but ask FDR why he did that, not me. The entire systems was set up by FDR to force large businesses to pay for insurance and not individuals. Doing so has punished individual payers ever since, especially small business owners.
– expanded high-risk pools: allow insurers to include more high-risk individuals in single pools, thus spreading the risk across all high-risk insured and lowering costs for them as a whole. Right now insurance companies have incentives to reduce the number of high-risk individuals rather than adding more. They only agreed with ACA in order to add more high-risk people (the famous “preexisting conditions”) by paying for them with low-risk people. Boskin suggests the opposite: add more and more high-risk and socialize their costs across greater numbers, but without the cost and subsidies to low-risk payers.

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ObamaCare’s Troubles Are Only Beginning

Be prepared for eligibility, payment and information protection debacles—and longer waits for care.

The White House is claiming that the Healthcare.gov website is mostly fixed, that the millions of Americans whose health plans were canceled thanks to government rules may be able to keep them for another year, and that in any event these people will get better plans through ObamaCare exchanges. Whatever the truth of these assertions, those who expect better days ahead for the Affordable Care Act are in for a rude awakening. The shocks—economic and political—will get much worse next year and beyond. Here’s why:

The “sticker shock” that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a “death spiral” of ever-higher premiums and fewer signups. The government, through taxpayer-funded “risk corridors,” is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The “I can’t keep my doctor” shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government’s rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

More IT failures are likely. People looking for health plans on ObamaCare exchanges may be able to fill out their applications with more ease. But the far more complex back-office side of the website—where the information in their application is checked against government databases to determine the premium subsidies and prices they will be charged, and where the applications are forwarded to insurance companies—is still under construction. Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles.

The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors’ appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office’s estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The “Cadillac tax” on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare’s expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law’s employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in.

The repeated assertions by the law’s supporters that nobody but the rich would be worse off was based on a beyond-implausible claim that one could expand by millions the number of people with health insurance, lower health-care costs without rationing, and improve quality. The reality is that any squeezing of insurance-company profits, or reduction in uncompensated emergency-room care amounts to a tiny fraction of the trillions of dollars extracted from those people overpaying for insurance, or redistributed from taxpayers.

The Affordable Care Act’s disastrous debut sent the president’s approval ratings into a tailspin and congressional Democrats in competitive districts fleeing for cover. If the law’s continuing unpopularity enables Republicans to regain the Senate in 2014, the president will be forced to veto repeated attempts to repeal the law or to negotiate major changes.

The risk of a complete repeal if a Republican takes the White House in 2016 will put enormous pressure on Democratic candidates—and on Republicans—to articulate a compelling alternative to the cost and coverage problems that beset health care. A good start would be sliding-scale subsidies to help people buy a low-cost catastrophic plan, purchasable across state lines, equalized tax treatment of those buying insurance on their own with those on employer plans, and expanded high-risk pools.

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Mr. Boskin, an economics professor at Stanford University and senior fellow at the Hoover Institution, was chairman of the Council of Economic Advisers under President George H.W. Bush.