A ‘Success’? The Jury’s Still Out On Obamacare

Jim Huffman Dean Emeritus, Lewis & Clark Law School
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Last March, on the 5th anniversary of the enactment of the Affordable Care Act, President Obama declared the act a success. Last week, Obama administration cheerleader-in-chief Paul Krugman wrote in the New York Times that “the Affordable Care Act is an overwhelming success.” Are the president and Krugman right, or was conservative commentator Sally Pipes correct when she wrote last year in Forbes that “the Affordable Care Act has failed to deliver what its name formally promised”?

The name of the act promises affordable care. Although the president claims that the act has led to a reduction in health care costs, any objective analysis would conclude that the jury is still out on the affordability question. Democrats point out that since the ACA was signed in to law by the president, the rate of increase in health care costs has declined. Republicans respond that health care costs continue to rise and that the decline in the rate of increase is a consequence of the “great recession,” not the ACA. No one really knows for sure.

But what we do know for sure is that health care costs have declined for some Americans, while making health care more expensive for others. By forcing more young and healthy people into the health insurance pool and requiring the already insured to remain in the pool, the ACA was designed to do exactly that – to subsidize the previously uninsured at the expense of the young, healthy and already insured.

We also know for sure that over 15 million Americans who did not have health insurance before the implementation of the ACA in 2013 now are insured. This, by many accounts including the president’s, is the ACA’s crowning achievement. In proclaiming the success of Obamacare, the president and Secretary of Health and Human Services Sylvia Mathews Burwell have relied heavily on the stories of individuals who are among the 15 plus million. Even parading those individuals in front of television cameras, as has become the unfortunate custom in modern American politics. See! There are real people benefiting from the ACA – what else do we need to know?

Well, actually, there is a lot else we need to know. For starters, if subsidizing health insurance for the less well off, for young adults until they are 26 and for those with preexisting conditions was the objective of the ACA, why was the bill over 2000 pages long? The 1935 Economic Security Act (Social Security) was only 64 pages.

Accepting that subsidizing health care for those who cannot afford it is a good idea, why didn’t Congress enact a short and simple bill mandating such means-tested subsidies from the federal treasury? Obviously that would have required Congress to either raise taxes or cut other expenses – both political nonstarters. It was a lot easier to require insurance companies to do the dirty work of shifting costs, leaving the pols to take credit for forcing the big bad insurance companies to do the right thing.

The ACA was over 2000 pages long because, like most legislation now enacted by congress, it is larded with provisions that have nothing to do with affordable health care. The less well off benefit, but so do a whole lot of other interests who managed to influence the hastily drafted act. Indeed the complexity of the act (we all remember what Nancy Polosi said) virtually assures that health care costs will continue to rise for all but those who qualify for subsidies.

Claiming that the ACA is a great success because over 15 million people now have insurance coverage for which they do not pay the full cost would be like General Motors declaring a good year because their market share increased as a result of selling at below cost, or giving away, 15 million more cars than they otherwise would have sold. Of course that would never happen because, unlike the federal government, General Motors cannot mandate that those not eligible for subsidies purchase its vehicles at above market prices.

It’s great that over 15 million previously uninsured Americans now have health insurance. But that cannot be the measure of success for the Affordable Care Act. The likelihood is that it could have been accomplished at far less cost with far less intrusion on individual freedom and far less disruption of the American economy.