The forgotten man of Obamacare

Josh Blackman Author, Unprecedented
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Under Obamacare there are winners and losers. The clear winners — the ones the president talks about the most — will be those who need it most. People who are sick, those with pre-existing conditions, those who are poor, those who could not afford insurance beforehand, adults under the age of 26 and want to remain on their parents’ plans, and other groups.

Opponents of the Affordable Care Act should not diminish, or disregard the important benefits for those who are helped. But as the law is implemented, we are beginning to appreciate the full scope of the losers of Obamacare. These are the forgotten men and women of Obamacare.

During a fireside chat in 1932, President Franklin D. Roosevelt promoted the New Deal as a means to help those who need the most aid, “the forgotten man at the bottom of the economic pyramid.” As author Amity Shlaes points out in her important book by the same name, Roosevelt’s arguments in favor government assistance ignored the real forgotten man.

At the forefront of all social welfare programs are the people being helped — the poor, the sick, the disadvantaged. The beneficiaries of such laws are obvious. Who are really forgotten are those who are being harmed by the law. And those harmed by the law are not merely the super wealthy, or those paying higher taxes. In the case of Obamacare, the harm will be felt most severely, not by the wealthy, but by those forgotten men and women squeezed in the middle.

First, there are also those who were covered by their employers’ plans, but were dropped, and forced onto the insurance exchanges. Second, and even more pernicious, are those who are dropped from full-time employment to part-time employment because their employer cannot afford to pay for Obamacare’s more expensive plans. Obamacare perversely creates incentives for employers to do both of these things.

Third, there are those who had individual plans, which their insurers cancelled. Obamacare rendered many cheaper plans with less coverage illegal, so insurers simply stopped offering them. Fourth, those who live in states where insurers exit the markets will have less choice, and higher prices. This flight is especially prominent in rural areas where low populations do not justify the costs of participating in the exchanges. Insurers shrugged.

Fifth, there are those who will have to pay higher premiums, and more out-of-pocket costs, to cover the cost of insuring the poor and sick. The director of Covered California admits as much. “People could have kept their cheaper, bad coverage, and those people wouldn’t have been part of the common risk pool. We are better off all being in this together.” Obamacare helps the winners (makes their health care more affordable), by penalizing the losers (makes their health care less affordable).

As always, the super wealthy will still be able to afford health insurance through generous employer-sponsored plans. The brunt of Obamacare will most strongly be suffered by the forgotten men of the Affordable Care Act. For example, the Los Angeles Times interviewed a self-employed lawyer in California who was forced to switch to a $238/month policy, after her $98/month policy was cancelled. She said, “It doesn’t seem right to make the middle class pay so much more in order to give health insurance to everybody else. This increase is simply not affordable.” The Times notes that in California, middle-income consumers, who are not eligible for generous tax subsidies, will see a rate increase of 30 percent. And California is just the tip of the iceberg. This story will become more typical across the country.

Maybe our collective empathy for the plight of those helped by the law should reduce our concerns for the middle-class. Perhaps that would have been an important national debate to have had in 2010, or during the 2008 election. But Americans never had the conversation that would sanction such a radical transformation of our society. Arguably, we had the conversation in the early 1990s with HillaryCare, and the American people spoke decisively against it.

Obamacare was sold to the American people with the promise of helping both groups. In addition to promising that the poor and sick would be helped, everyone else was promised that they could keep their doctors. They were promised that health care costs would go down. They were promised that there would be no new taxes (the administration reversed this position as soon as the litigation began to defend Obamacare’s constitutionality). None of these things proved to be true.

Had the full picture of this law been understood back in 2010 — the impact on both the winners and losers — rather than the sugarcoated version rammed through Congress on a straight party-line vote, it is doubtful the law would have ever been passed.

But now, we are stuck with Obamacare, and its 2010 veneer is quickly decaying into its 2014 reality.

Josh Blackman is a law professor at the South Texas College of Law, Houston, and author of Unprecedented: The Constitutional Challenge to Obamacare.