On the occasion of the Supreme Court’s decision in California v. Texas in her latest Washington Post column Megan McArdle assesses the Affordable Care Act’s success:
Obamacare’s supporters talked a lot about illnesses contributing to more than half of all bankruptcies, which implied there should have been a sharp decrease in 2014, when Obamacare’s major coverage provisions took effect. There wasn’t.
Obamacare’s supporters frequently cited America’s abysmal infant mortality rate, which implied that once Obamacare was in full swing, infant mortality should decrease sharply. It didn’t.
Obamacare’s supporters claimed that tens of thousands of people were dying every year because they didn’t have health insurance, which implied that by 2019, our overall mortality rate should be substantially lower than it had been in 2009, with a noticeable kink around 2014. Instead, mortality rates, which had been trending downward, leveled off around that time.
Obamacare’s supporters talked a lot about reducing health-care costs, or at least the rate at which they were growing. Sadly, no.
Partly that’s because those claims were always oversold; research performed in the years since suggests that offering people health insurance has more measurable impact on their financial health than their physical health, and that medical bankruptcies may be driven less by medical bills than by income loss, a problem Obamacare doesn’t address. But there’s another reason neither those optimistic promises nor my pessimistic prophesies bore fruit: We were all wrong about an even bigger question.
In 2011, Doug Elmendorf, head of the Congressional Budget Office, testified that by 2021, 24 million people would be buying their insurance on the Obamacare exchanges. It’s fair to say that both Obamacare’s friends and foes assumed the number would be at least that high, if not higher. In reality, the most recent data suggest it’s half that.
The Medicaid expansion has been more in line with projections, but it, too, is smaller than expected, in part because the first time the Roberts court rescued Obamacare, it ruled that the federal government had to let states opt out of expanding their programs. And that, in turn, has lessened the pressure for the government to exert more stringent pressure over health-care delivery or prices. Most of Obamacare’s gestures in that direction were less effective than hoped, or died on the vine.
That’s not to say Obamacare did nothing; the percentage of Americans who are uninsured has fallen from 16.7 percent in 2009 to 9.2 percent in 2019. That’s a substantial achievement, which even the program’s harshest critics should acknowledge. But even its most zealous boosters should be willing to admit that the program the Supreme Court saved this week is far from the revolutionary transformation its architects envisioned.
Her bottom line is that it wasn’t as bad as its critics thought nor as good as its advocates claimed. I think that from a process standpoint is has turned out pretty much as I predicted—in essence it was “Medicaid for all” and rather than reforming the existing system it cemented it in place.
“Medicaid for allâ€
Not by a long shot. With Medicaid, there are no deductibles or co-payments, but there are fewer doctors.
As long as you do not need it, Obamacare is great. Otherwise, you are screwed. The premium is subsidized, but you still have the deductible, co-pay, and out-of-pocket expenses. Even with the subsidies, a low/no deductible and/or co-pay policy is unaffordable.
Going from Medicaid to Obamacare is very expensive, and if you are over the limit by one penny, medical care becomes unaffordable. So, being uninsured is the most logical choice.
Prior to passage of ACA, some reports had it that the percentage of uninsured was 15% (or 16.7, whatever). Of those about one third were supposedly rich enough to pay out of pocket; one third were healthy young people whose only need was insurance for catastrophic injuries; and one third were working poor who really needed help.
In hindsight (or even foresight), it would have been cheaper overall, and simpler to extend Medicaid to the working poor. You only had to adjust the income level. But we got ACA, which did not solve the working poor problem, because of the grandiose schemes of the socialist planners. The plan was more important than the people. The planners needed to prove their superior morality. Once their virtue had been demonstrated, the working poor could go hang themselves. Here’s some nice socialist rope.
So, why is no one trying to do anything for the remaining 9.2% uninsured? Do they no longer matter?
As I understand it, the ACA requires private insurers to payout 85% of premiums as coverage, leaving 15% for administrative costs.
As a result, private insurers have a very strong interest in medical costs.
They must rise. 15% of $3 trillion is a little more than 15% of $2 trillion for salaries, facilities, and other expenses.
By comparison, Medicaid overhead runs about 2%, although fraud is probably higher.
That’s not actually a change, at least not much of one. Nowadays most large private insurance plans are self-insuring. The insurance companies are administrators only—they bear no risk. Under those plans their compensation is usually a percentage of claims paid which is perverse.