Gary Locke, the Secretary of Commerce, has now weighed in on the impact of Obamacare on health care costs by pointing out that since there will no longer be uninsured individuals, “this law reduces the hidden tax of about $1,000 for family coverage that those with insurance pay to cover the cost of the uninsured who rely on emergency rooms for care.”

This idea is based on the key assumption that providing health insurance will reduce the use of emergency rooms by the uninsured and instead they will seek care from primary care physicians at a much lower cost of care. Let us consider all the other assumptions of this sort of thinking: First, insurance payments to primary care physicians will change the habits of those who use the Emergency Department for their care. Second, primary care physicians will be available to take on these new patients. Third, the provision of health insurance will reduce the ultimate subsequent hospitalizations and emergency room visits of the previously uninsured. Fourth, that the cost of care for these individuals will decline and therefore the “cost curve will be bent downward”. All of this is wrong.