I’m reading a terrific book, The Politically Incorrect Guide to Socialism, by National Review’s Kevin Williamson; the book is one of Regnery Publishing’s PIG series. Let’s leave aside the issue of whether Obamacare is socialism. Not going there, Gentle Reader. Williamson does point out, however, one aspect of Obamacare that dooms it to failure: central planning by bureaucratic elites who snatch figures out of the air. These figures are developed by people with little real world sense of how their plans will affect us.   

As you probably know, the system mandates that citizens buy health insurance but then sets up subsidies for those who can’t afford to do so. There is a graduated system of “notches” that determines eligibility.  Stanford law and business professor Daniel Kessler explains how this will discourage citizens from working:  

Starting in 2014, subsidies will be available to families with incomes between 134% and 400% of the federal poverty line. (Families earning less than 134% of poverty are eligible for Medicaid.) For example, a family of four headed by a 55-year-old earning $31,389 in 2014 dollars (134% of the federal poverty line) in a high-cost area will get a subsidy of $22,740. This will cover 96% of an insurance policy that the Kaiser Family Foundation predicts will cost $23,700. A similar family earning $93,699 (400% of poverty) gets a subsidy of $14,799. But a family earning $1 more-$93,700-gets no subsidy. …

Consider a wife in a family with $90,000 in income. If she were to earn an additional $3,700, her family would lose the insurance subsidy and be more than $10,000 poorer. In addition, she would also pay more in income and Social Security taxes. Taken together, these policies impose a substantial punishment on work effort.

Notches also lead to unfairness. The principle that families of the same size with similar incomes should be treated similarly by tax law and transfer programs has deep philosophical roots and appeals to basic notions of equity. The notch turns this principle on its head. Next-door neighbors with virtually identical circumstances could receive very different levels of government assistance, depending on which side of the notch they happen to fall. This feature will justifiably increase public cynicism about the law and government in general.

If Obamacare is repealed-and it must be-then reform must be incremental. It should also be based on the free market, which, unlike the abstractions of bureaucrats, provides real information in the form of costs.