Obamacare proves to be in rude health despite critics’ predictions

The number of Americans without health insurance has fallen by about 15 million

Obamacare is working better than even its supporters expected – but its enemies say that the good news proves nothing, because nobody predicted anything different

Obamacare is working better than even its supporters expected – but its enemies say that the good news proves nothing, because nobody predicted anything different

 

Imagine yourself as a regular commentator on public affairs – maybe a paid pundit, maybe a supposed expert in some area, maybe just an opinionated billionaire. You weigh in on a major policy initiative that’s about to happen, making strong predictions of disaster. The Obama stimulus, you declare, will cause soaring interest rates; the Fed’s bond purchases will “debase the dollar” and cause high inflation; the Affordable Care Act will collapse in a vicious circle of declining enrolment and surging costs.

But nothing you predicted actually comes to pass. What do you do?

You might admit that you were wrong, and try to figure out why. But almost nobody does that; we live in an age of unacknowledged error.

Sinister forces

Finally, there’s a third option: You can pretend that you didn’t make the predictions you did. I see that a lot when it comes to people who issued dire warnings about interest rates and inflation, and now claim that they did no such thing. Where I’m seeing it most, however, is on the healthcare front. Obamacare is working better than even its supporters expected – but its enemies say that the good news proves nothing, because nobody predicted anything different.

Go back to 2013, before reform went fully into effect, or early 2014, before the numbers on first-year enrolment came in. What were Obamacare’s opponents predicting?

The answer is, utter disaster. Americans, declared a May 2013 report from a House committee, were about to face a devastating “rate shock”, with premiums almost doubling on average.

And it would only get worse: at the beginning of 2014, the right’s favoured experts – or maybe that should be “experts” – were warning about a “death spiral” in which only the sickest citizens would sign up, causing premiums to soar even higher and many people to drop out of the program.

What about the overall effect on insurance coverage? Several months into 2014 many leading Republicans – including John Boehner, the speaker of the House – were predicting that more people would lose coverage than gain it. And everyone on the right was predicting that the law would cost far more than projected, adding hundreds of billions if not trillions to budget deficits.

What actually happened? There was no rate shock: average premiums in 2014 were about 16 per cent lower than projected. There is no death spiral: on average, premiums for 2015 are between 2 and 4 per cent higher than in 2014, which is a much slower rate of increase than the historical norm.

The number of Americans without health insurance has fallen by about 15 million, and would have fallen substantially more if so many Republican-controlled states weren’t blocking the expansion of Medicaid. And the overall cost of the programme is coming in well below expectations.

One more thing: you sometimes hear complaints about the alleged poor quality of the policies offered to newly insured families. But a new survey by JD Power, the market research company, finds that the newly enrolled are very satisfied with their coverage – more satisfied than the average person with conventional, non-Obamacare insurance. This is what policy success looks like, and it should have the critics engaged in soul-searching about why they got it so wrong. But no. Instead, the new line – exemplified by, but not unique to, a recent op-ed article by the hedge-fund manager Cliff Asness – is that there’s nothing to see here: “That more people would be insured was never in dispute.”

Ridicule

You see, in a polarised political environment, policy debates always involve more than just the specific issue on the table. They are also clashes of world views. Predictions of debt disaster, a debased dollar, and Obama death spirals reflect the same ideology, and the utter failure of these predictions should inspire major doubts about that ideology.

And there’s also a moral issue involved. Refusing to accept responsibility for past errors is a serious character flaw in one’s private life. It rises to the level of real wrongdoing when policies that affect millions of lives are at stake. – (New York Times service)

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