Government: Admin Costs are Zero for Citizens

A friend posted the following on Facebook today:

I have to purchase private health insurance for my family. It’s bad enough that I have to do this with after tax dollars unlike people who get it through their employer, but now I am forced to deal with the incompetence of our government as well. I had a very good plan, not the “sub-standard plans” Obama speaks of, because I already live in a state where health insurance is mandatory and those types of plans are not offered. But my Romneycare wasn’t good enough for Obamacare. I was told months ago that our family’s plan would be cancelled on March 31st. In fact they called me approximately 3 times a day for 3 months to remind me of this. And not because it wasn’t good enough, but because they needed to charge me about $150 more per month for the exact same plan. I would have to re-enroll for the privilege of paying more money. What choice do I have? NONE- it’s the law. I got the bill for my April premium and was ready to pay it, when [Massachusetts General Hospital] called to say that an appointment on Wednesday for my daughter [to see why she is waking up screaming at night] wouldn’t be covered because the people working for our government had cancelled my plan as of March 1st – not March 31st as they had told me on a daily basis. So, now I’m left with no insurance for the month of March, and when I called their answer was “hmm..I’ve never seen this before, but sadly there is nothing we can do.” I’ve tried multiple times to call another department of the Health Connector [Massachusetts version of healthcare.gov] and apply for a waiver to get coverage for March, but the line is always busy. So, thank you Mr. President and everyone in Congress who voted for this legislation. You’ve wasted my entire morning dealing with this and left me without coverage. Could you please be the ones to wake up with my five-month-old daughter 10 times a night until I can get an appointment when I have insurance?

[slightly edited by me]

I’m wondering if the explanation for all of this is that people routinely underestimate administration costs. I have done this in our helicopter business. I would price Groupons so that we would break even when customers showed up to take an introductory ground school and flying lesson. Then we would lose money because customers would call the front desk to reschedule, ask questions, etc. We could tell how much money we were losing because we had to pay the front desk workers.

With most government programs there is no mechanism for recording the hours wasted by citizens complying with laws and regulations. As far as government workers are concerned, the admin cost on the citizen side might be zero. So that makes it possible for bureaucrats in Washington, D.C. to be celebrating the success of a program while citizens in Massachusetts are experiencing a reduced quality of life.

[In the case of my friend, her quality of life is definitely reduced by the existence of health insurance. Her family of four is large enough that costs will be smoothed out to some extent. She and her husband have sufficient savings and extended family support to absorb even the expenses for a catastrophic illness or accident. So she would be much better off swiping her credit card every time she consumes medical services, the same way that she pays for groceries and restaurant meals. But she can’t do that because (a) she has already been forced to pay for health insurance (about $20,000 per year for a family of four), and (b) providers would charge her 2-10X as much if she were paying individually.]