Obamacare, by its backers’ own admission, had a problem from the get-go. It wasn’t supposed to affect 85 percent of the population that had health-care insurance. So for 85 percent of the population, even if Obamacare didn’t harm them, they would get no real benefit. As long as most of that 85 percent didn’t lose anything and 15 percent gained something, Obamacare would be in good shape. But then the list of Obamacare victims expanded. Now we have a list of people who are not happy with Obamacare:
People who had their existing insurance canceled.
People whose spouse was dropped by employer coverage.
People whose work hours were cut to avoid the Obamacare 30-hour requirement.
People who had cheaper insurance than the exchange price.
People who don’t want to buy insurance and now face a fine.
People who enjoyed Medicare Advantage, which was cut to pay for Obamacare.
Then there are the people who feel like they were promised something that the president’s program didn’t deliver: People who qualify for a subsidy and still can’t afford insurance. People who don’t qualify for a subsidy and still can’t afford insurance (e.g. in a state that did not expand Medicaid.) On top of all that, include the people who might benefit from Obamacare but cannot access the site. So now the group of people Obamacare doesn’t help or actively harms (or just annoys) is huge.
Then let’s look at the winners. The people who are helped, at least so far, are mostly those who can qualify for Medicaid, which really isn’t central to Obamacare. Likewise, there are those up to age 26 years who can stay on their parents’ plan (although that’s also a discrete part of Obamacare) and those who have preexisting conditions who will be helped by community rating. Then there are the lucky ones, the Obamacare lottery winners, which are those — perhaps the self-employed — who don’t have employer-provided insurance, can’t buy it cheaply (e.g. aren’t healthy, are older but not Medicare eligible) and managed to get through to purchase it.
It should be obvious that the first category dwarfs the second category. Obamacare wound up hurting or annoying a whole bunch of people and limiting (by incompetence) the number of beneficiaries. No wonder most people don’t like it. And they will like it less when the adverse selection process kicks in. The older, sicker people will persevere to get onto the exchanges, and the younger, healthier ones (many didn’t want to buy insurance or wanted a catastrophic plan) won’t be prodded into buying it. The Web site glitches certainly exacerbated the problem, but the adverse selection problem was always looming. (If you recall, the president himself warned that it doesn’t work unless a bunch of young people sign up.) The program thereby becomes a whole lot more expensive, requiring a tax hike and/or raising the debt.
In short, as many conservatives predicted to one degree or another, Obamacare is piling up the causalities and the unintended consequences for very little gain. We certainly could find a less disruptive and cheaper way to take care of the category of people who want insurance without making everyone else (taxpayers, the used-to-be insured, medical-device companies, etc.) miserable. This is a program in search of a constituency, a behemoth that personifies conservatives’ complaints about government. (If Obama didn’t come up with it, conservatives might have had to invent it.) Whether it is repealed, sinks under its own weight or becomes a voluntary system (in essence, the exchanges become high-risk pools) remains to be seen. But it is a lesson in how the liberal welfare state can do more harm than good.