On Saturday, in the wake of the failure of House Speaker Paul Ryan’s American Health Care Act (AHCA), President Trump tweeted, “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!”
Okay, so let’s take a closer look at the President’s message. He made two points: First, Obamacare will “explode” because of excess costs; and second, that his administration will yet find a way to develop “a great healthcare plan” that’s presumably a good deal different from what we’re seeing now.
So let’s look at each point in turn; in this installment, we’ll look at the “explode” question, and in next installment, we’ll examine possible alternatives.
Will Obamacare, as Trump says, “explode”? It is true that costs in some places are spiraling, even as coverage is shrinking. As the President said in his February 28 address to Congress:
Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116 percent last year alone. Governor Matt Bevin of Kentucky just said Obamacare is failing in his state, the state of Kentucky, and it’s unsustainable and collapsing.
However, these troubles are not evident everywhere. As The New York Times rushed to report, Arizona was the outlier; nationwide, the increase in the benchmark plan was “only” 22 percent. That is, a double-digit increase, not triple-digit.
Either way, to be sure, they are big increases. And thus the Democrats suffer from continuing vulnerability on the Obamacare issue. That is, they and their program have failed completely to uphold Barack Obama’s 2008 campaign promise to cut the average family’s annual healthcare bill by $2500. Instead, according to the Kaiser Family Foundation, the average cost of family insurance premiums has risen from $13,375 in 2009 (the first year that Obama was in office) to $18,142 in 2016. In other words, instead of the promised 20 percent reduction, American families have faced a 35 percent increase.
Yet even so, the American people are cautiously supportive of Obamacare; at least, they like it more than they dislike it. According to the latest RealClearPolitics polling average, 48 percent approve of the law, while 43.8 percent disapprove of it.
Indeed, support for Obamacare has risen substantially in the last year. Evidently, the prospect of the program actually being repealed has forced Americans to ask themselves if they really want the program to go away—and the answer has been “no.” House Republicans had to acknowledge this political reality last week, when they pulled their Obamacare-repealing AHCA.
In fact, if we drill down further into the polling data, we find that Obamacare—or at least the idea of national health insurance—rests on a deep bedrock of public support. In an Ipsos/Reuters poll conducted earlier this month, Americans were asked if they agreed or disagreed with this statement:
Health care must be recognized as a right, not a privilege. That is, every man, woman and child should be able to access the health care they need regardless of their income.
A total of 62 percent “strongly” agreed that yes, health care is a right, and 22 percent “somewhat” agreed. Thus we can see: A full 84 percent of us accept the ultimate argument that the Democrats have been making, while just 12 percent accept the libertarian-Republican counter-argument.
Indeed, given those numbers, one can only marvel that the Democrats did so poorly in the 2010 and 2014 midterm elections, when Obamacare was a front-and-center issue.
So how might we square this circle—that the underlying idea of Obamacare is popular, but not Obamacare itself? As a quick answer, we can presume that the Democrats were done in by the technical defects of the Obamacare plan (the notorious website glitches), as well as its sideshow ideological problems (the Obama administration pushing insurers to pay for sex-change operations).
So the Democrats have some learning to do. The takeaway lesson of the last seven years, for welfare-state architects, is that it’s best to be technically competent and to avoid exotic excesses. That’s why, for example, the meat-and-potatoes essentials of Social Security are safe, politically, even as the complexity that is Obamacare still finds itself in the crosshairs.
In fact, evidence is clear: The American people want a program that helps them feel secure about the basics of their lives, not a program which is the basis for someone else’s theory of avant-garde social experimentation.
Yet at the same time, Republicans, too, have some lessons to learn: To put it bluntly, the voters of this country are not where the the Republican intelligentsia thought they were. That is, all the ideological think-tanking of the last seven years—all the manifestos, road maps, battle plans, and talking points that called for the eradication of Obamacare—all that was just so much vaporizing.
We can further say: The “experts” who wrote that earnest propaganda, living in their fatcat-funded hothouses, never seem to have met an actual voter, or at least not enough of them.
It is, of course, possible to imagine that Republicans could have come up with a true repeal-and-replace bill, one that peeled away the mistakes and excesses of Obamacare while maintaining the essential of affordable care for all citizens. But the latest GOP plan, AHCA, was not it.
Indeed, the reality of the disconnect between Republican theory and political practicality became searingly obvious on March 13, when the Congressional Budget Office concluded that under AHCA, 24 million people would lose their health insurance. At that moment, the bill was doomed; according to a Quinnipiac Poll taken ten days after the CBO finding, just 17 percent of Americans supported AHCA.
Just hours after the bill was pulled on March 24, Charles Krauthammer said on Fox News, “There is now a generalized expectation that there is a an entitlement to universal healthcare.” Or, as House Speaker Paul Ryan reluctantly conceded, “We’re going to be living with Obamacare for the foreseeable future.”
But wait, what about the question of Obamacare “exploding”? All those cost increases? Without a doubt, cost increases are going to be a big issue.
And yet here we might pause to note that the insurance-expansion of Obamacare falls into two buckets, and so any solution must deal with both, separately.
The first bucket, and most notoriously, is the Obamacare personal mandate, which was aimed at forcing people into buying health insurance. As we all know, the mandate has been been the emotional crux of the Obamacare fight; millions said, in response, “Don’t tread on me.” Thus the mandate was a prime target of the GOP’s AHCA bill.
Yet interestingly enough, the number of Americans enrolled in the Obamacare “exchanges”—the vehicle through which people were supposed to comply with the mandate—is relatively small: In a country of 320 million, the number of enrollees fluctuates within a range of six million and 11 million (the number changes as people’s status changes—they get new jobs, get married, and so on).
Yes, it’s true: Most of the Obamacare fight over the past decade has been about a program that directly affects only two or three percent of the population.
Meanwhile, it’s this program that has been visibly “exploding” in cost, as Trump has said. Why the explosion? Critics say it’s because the Obama administration deliberately low-balled the cost-estimates in the first place, as a way of making it seem more politically attractive. And yet because prices were set low, health-insurers weren’t much interested in offering plans. Moreover, since there’s been uncertainty over the fate of Obamacare, insurers haven’t been enthusiastic about offering plans. Thus exchange participants have often gotten the worst of both worlds: High prices and little choice.
So how could the problem of the exchanges get fixed? Or at least dealt with?
One possible answer, of course, is a renewed push to repeal the whole program. One diehard is Vice President Mike Pence, who said on Saturday, the day after AHCA died, “The American people want Obamacare gone.”
A second possible answer is additional subsidies as a tweak to the program—or, if one prefers, as a bandaid.
The exchange health plans typically cost a few hundred dollars a month, including existing subsidies. And so if we do the math as to possibly increasing subsidies to keep the program alive, we can arrive at a rough additional cost estimate of $5 billion. To be sure, many will strongly object to any such increase, which can be regarded, through one lens, as a crony-capitalistic subsidy to the health insurers.
So here’s where the Obamacare battle will likely first resume: What to do about about the Obamacare exchanges, now that they have survived the AHCA chopping block? The insurance companies, of course, will make an easy target, as they are unpopular, and yet what about the millions of actual people in the exchanges? Will the political system turn its back on them? Given the American people’s support for universal coverage, that seems unlikely.
We might add that yet another concern is the long-term erosion of health insurance provided by private employers; in the “gig economy,” more and more people will have to find insurance on their own—and that will take them to the exchanges.
Okay, so now to that second bucket of Obamacare, which is the expansion of Medicaid. This program has actually been larger than the Obamacare exchanges; about 12 million people have been added to the program in the last seven years. Interestingly, these new additions were mostly among the working poor; as we know, Medicaid has covered the non-working poor for decades.
Medicaid, too, would have been affected by AHCA, and more than a few Republicans rose to defend it, especially since it was low-income workers—increasingly a core Republican constituency—who would have been most affected. One such defender is Sen. Bill Cassidy (R-LA); he has been notably energetic in defense of his own blue-collar voters. We can say it’s unlikely that one more think-tank pamphlet will change his reading of his own fellow Louisianans.
Of course, Medicaid is not cheap; in 2015, it spent $545 billion. Does that massive expenditure represent an “explosion” in costs? Or is it simply a piece—admittedly, a big piece—of our overall national health expenditure of nearly $3.5 trillion? To put it mildly, those are questions for further debate.
Yet for now, Medicaid, too, along with the rest of Obamacare, is destined to remain intact.
So where does that leave us? If the legal and fiscal structures of the healthcare status quo seem firmly locked in place, is there anything else that can be done? Is it still possible that President Trump can realize his dream of “a great healthcare plan”?
Will we ever have greatness with Obamacare? Or will we just have more of the same? Is there any possibility of a breakout to something better? Really better?
We’ll take up those questions in part two of this series.