Why Obamacare Survived
CAMBRIDGE – Since the United States’ Affordable Care Act (ACA) – or “Obamacare” – was enacted in 2010, Republicans have been promising to “repeal and replace” it. When the 2016 presidential and congressional elections delivered all three branches of the US government to the party, the time to fulfill that promise seemed to have arrived. Yet the anti-Obamacare crusade has just been dealt a crushing blow, owing to the refusal of some Republican senators to vote for the replacement legislation.
Republicans blame their failure on the Democrats’ refusal to cooperate. But why should the Democrats help to dismantle their biggest legislative achievement of the last decade (if not longer)? The major flaws in Obamacare are not, as has been argued, unintended consequences of a poorly designed policy, which thus must be replaced; instead, they stem from Republican demands.
In any case, Republicans have majorities in both houses of Congress, so they don’t actually need the Democrats’ support to pass legislation. Likewise, President Donald Trump’s unprecedented lack of experience and general incompetence cannot be at fault, as he isn’t indispensible to the repeal and replace process.
The truth is that the blame belongs squarely on the shoulders of congressional Republicans. Since 2010, they voted more than 50 times to repeal the ACA. Those votes may have been merely symbolic, given Obama’s veto power; nonetheless, the striking fact remains that the Republicans never bothered to try to formulate an alternative in the event that one of their own would one day become president.
In fact, they couldn’t formulate a workable alternative to Obamacare, because some within their ranks refuse to accept the basic laws of arithmetic. According to the estimates produced by the Congressional Budget Office, which has a very good track record, the Republicans’ proposed health-care legislation would have caused more than 20 million Americans to lose insurance coverage. But many Republicans continue to insist that they can somehow slash spending and eliminate rules and requirements, including the “individual mandate” (the requirement that all Americans have health insurance) that underpins Obamacare, without affecting current coverage levels.
Of course, there are Republicans who acknowledge the facts. Some support repeal and replace anyway: Senator Rand Paul of Kentucky, for example, is a relatively consistent libertarian who believes that the benefits of minimizing the government’s role in health care somehow outweigh the costs to lower- and middle-income working Americans. Others recognize that the costs are unacceptable – indeed, that is why the Republican-proposed replacement has just been rejected – but have been unable to put forward any credible alternative.
Logically, there should be a third group of moderate Republicans who acknowledge the arithmetic, find it unacceptable, and commit either to reforming Obamacare or developing some other realistic plan that can deliver better health insurance to more Americans. Unfortunately, there is nobody left in this category, except perhaps Senator Susan Collins of Maine.
But there is another, deeper reason why the Republicans cannot come up with an alternative to Obamacare: the ACA is based firmly on their own ideas. For example, the individual mandate that they now decry was originally developed by conservative think tanks seeking to devise a workable system of national health insurance with the smallest possible role for the government. It was the centerpiece of Massachusetts’ health-care reform signed by Mitt Romney in 2006, when he was the state’s governor.
The individual mandate is essential to barring insurance companies from discriminating against those with pre-existing conditions – a provision that even Obamacare’s opponents want to keep. It is not financially feasible for private insurance companies to insure people who are already sick or at high risk, if those who are still healthy are not also in the pool.
This does not mean that the US needs to go to the extreme of a full-on socialized health-care system, whereby the government directly provides health care to all (though the British are certainly attached to their National Health Service). And, indeed, nobody in the US is calling for that.
What some – most vocally, Vermont Senator Bernie Sanders – have proposed is a single-payer system. In Canada, such a system of government insurance and private provision of services delivers strong health outcomes at a fraction of the cost of the US system. Yet, while a substantial share of Americans may support such a system, a single-payer program would face strong resistance from three powerful groups: the insurance industry, consumers who are happy with their current employer-paid plans, and Republicans in general.
But the system many Republicans tout – a scheme based fully on “personal responsibility” – is not feasible. The system the US had before Obamacare did not meet that standard, as the uninsured imposed costs not just on themselves, but also on other Americans. Those without insurance are more likely to experience conditions like obesity and addiction, and to let their health deteriorate before seeking medical attention. Before Obamacare, hospitals would simply pass the higher costs of treating them on to other patients.
A system of genuine personal responsibility would require that the medical profession not provide care that it feels ethically obliged to provide. But I have yet to meet a free-market conservative who would truly favor a new federal law requiring ambulances to leave accident victims by the side of the road unless they can show proof of insurance.
The solution to America’s health-care woes lies somewhere between socialized medicine and laissez-faire. But there is no question that it must include something like the three legs of the Obamacare “stool”: the individual mandate, protection for those with pre-existing conditions, and a means to pay for it all. Though some Republicans pretend otherwise, there is simply no solution that decreases the role of government without increasing the ranks of the uninsured – and thus raising total health-care costs.
Jeffrey Frankel is Professor of Capital Formation and Growth at Harvard University.
Copyright: Project Syndicate, 2017.
To subscribe to Facts and Arts' weekly newsletter, please click here.
To follow Facts & Arts' Editor, Olli Raade, on Twitter, please click here.
If you have something to say that you want to say on Facts & Arts, please
Write to the Editor, or write a comment in the comments section.
This article is brought to you by Project Syndicate that is a not for profit organization.
Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.
Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.