A Realist’s Take on Obamacare

For years, Obamacare supporters weathered at best tepid support for the President’s reform in the expectation that once people experienced the actual law, rather than the right-wing fever dream, opinions would change. Then they were hit with the wholly unexpected surprise of a botched website roll out that set the whole public opinion war back on its heels and then a wave of cancellations that were reported in a misleading way (and only affected a tiny portion of the population) but nevertheless further soured public opinion.

But for all that, here’s why I think the generally cataclysmic press is overblown and why the law will be a success.

Much of what I’m going to say below is based on worst case scenarios, most of which I don’t think will materialize. Earlier I noted poll data that shows that for all the soured opinions and bad press, Obamacare’s standing with the public remains pretty strong. The program is actually doing pretty well in states that have functioning websites. But as they say in the Army, Hope is not a plan. What are the bottom lines when you figure all the things that could go wrong? Here’s why I’m still pretty optimistic.

I base this relative optimism on four assumptions.

The first is legislative: regardless of firestorms about this or that, this law will not undergo substantive changes before January 2017. In practice, President Obama has complete control over this part of the equation. Even with a Republican blowout in 2014 (which I think highly unlikely) and lots of Democrats turned against the law, it’s virtually impossible that a presidential veto could be overridden. “Substantive changes” can mean lots of things but I mean new legislation aimed at repeal or gutting the law. Nothing will happen on the legislative front that Obama doesn’t approve of. This is a cardinal fact.

Second and under-appreciated: the major national insurance carriers have heavily bought into the “Obamacare”/exchange model and have spent almost three years retooling their business models to prepare for it. It’s too much to say there’s no going back. But the carriers themselves are about as close to being locked in as you can get. Any decision to reverse course and go back to the old system is fraught with real danger. So the carriers themselves have huge incentives to make the system work.

Third: By early next year you will have millions of new people enrolled in Medicaid, large numbers of people who have health care covered who couldn’t get it at any reasonable price before who now have coverage and you will have large numbers of people who have care that is better or cheaper and often both than it was before. Yes, you will also have people who had barebones policies who will have to buy into more expensive policies with fuller coverage. On balance, those people will tend to be more politically connected and visible, person for person, than the people on Medicaid for instance. But all evidence shows the first three groups will vastly outnumber the last group. I do not think anyone will be able to claw that back. It’s one thing to have millions of uninsured or people boxed out because of pre-existing conditions. But once they have affordable coverage, I don’t think you’re going to be able to take it back.

Fourth: the most important premise, I think Obamacare is good policy. By ‘good’ I mean something very specific – not ideal or perfect or the best but that its basic approach of incentives, subsidies, creating better risk pools and efficiencies through exchanges, etc. can and will work to substantially increase access and reduce market failure and medical inflation. There’s no guarantee of that assumption. And I’d say it’s the most speculative of the four. But I think there’s very good evidence to assume this based on the experience in Massachusetts, the opinions on policy experts I respect and actually a lot of data we’re already seeing even in this very bumpy roll out. Obviously, if the policy really is a failure, if it leads to risk pool death spirals, market failure, skyrocketing rates for everyone, then eventually reasons one through three will eventually be beaten down by that reality. But I see no real reason to think those will happen in part because I think it’s fundamentally a workable policy and especially because of the political and stakeholder buttressing of reasons one through three.

Now, one response I’ve heard on this front goes something like this: Sure, most of the uninsured will get covered and people will preexisting will be protected and you won’t be able to be dropped if you get sick but it’s just going to be an endless PR nightmare and the Dems will be paying for it in 2014 and 2016 and maybe 2018 and it may ‘work’ but never be popular.

This doesn’t strike me as probable or logical. Over time, if the key market failures in the health care system are removed, I think most people will decide it was a good idea.

But here is where the question comes to the prism and the standard of success. We didn’t pass Health Care Reform for it to reap electoral gains for Democrats (though I think it still will) or to have it be popular, per se (though I suspect it will be). The aim was to get people covered, make the health care provision system more efficient and reduce the scale of human suffering, especially the spectrum of suffering tied to your wealth and your luck.

By that standard, I think it will be a success and I think there will be no going back. And that’s the only standard that matters.

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