Why Obamacare Survived

Jul 24, 2017 Jeffrey Frankel

When the 2016 general election delivered all three branches of the US government to the Republican Party, the time to fulfill the party's promise to "repeal and replace" Obamacare seemed to have arrived. Why haven't they succeeded?

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.

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0 Comments on this paragraph, 29 Comments on this article

Peter J. Sträter Aug 2, 2017

The basic problem of the US health care system is, that it has the per person highest expenditure of the world, while the results are for the poorer 90 % in the USA less than mediocre. If the parties involved would be willing to attack this problem, the financial consequences of helath care would be much mitigated. Butt ..., it seems nobody cares. PJS
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Patrick Newman Aug 2, 2017

The NHS is not socialised medicine, it is universalising medicine, free at the point of use, funded by taxation and costing less than 10% of GDP. Its main problem is the Tory Party (British equivalent to the GOP) underfunding it.
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James Edwards Jul 31, 2017

The reason it survive is that the Republican leadership tried to do it via secret process, unlike the Democrats did in 2009-2010 period, to spring it on the its members with no input from stakeholders in the process something McCain has stated in his return to DC. It all came down to one needed legislation to get it over the House to craft it via conference committee. They deserve to fail for what they did.
Leave it to Trump to try to channel the defeat to do it again after wrongly complaining that it was the filibuster rule that cause the loss ignoring the fact the legislation was a reconciliation bill.
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Barry Rosenfeld Jul 30, 2017

Very few pople get the "Cadillac" plans that corporate and financial executives receive. However, if a service is covered by insurance, be certain that physicians will order it. That is why US care is over-prescribed and the costs are so high relative to the benefits received. The medical-industrial complex ensures that any proposal will allocate to each component a share of the costs.

And don't kid yourself, regardless of the direct costs anyone faces, the taxpayer pays the preponderant share. American health care already is "socialized" in this sense of the word. And physicians are culpable, although they decry government interference with health care decisions.
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TS Low Jul 30, 2017

The Republican conservative ideal of "personal responsibility" has moved considerable rightward in the last few years, even arguing that hospitals and emergency services be allowed to deny even the critical ill from accidents from treatment. This would consist of barriers to any treatment right at the hospital emergency room door.

This is what the far-right agenda is coming down to.
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R Polinsky Jul 30, 2017

Republicans have not not been in interested in reforming health care in the US. They were more interested in destroying President Obama. They used this approach with success in 2010 but since that year, they are gradually coming to the reality of their situation and they will now be held to account for their actions.
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Chris Jones Jul 30, 2017

Let Obamacare fail. The states are crying because they can't keep up with the Medicaid costs and want guaranteed federal reimbursement. The insurance companies want federal reimbursements to make up costs of an expanded pool, or as seen, will pull out of state markets. Medicare costs are rising as the Baby Boomers flood in and actuaries predict disaster. Medicare taxes will have to rise. If Democrats get elected, Medicaid taxes will start. The problems snowball.
McCain and Murkowski lied on repealing and replacing Obamacare because their hate for Tea Party anti-federalism overrode their campaign promises.
HSAs, Tort limitations, facilitating varying insurance option offerings across state borders as the Commerce Clause was designed to accomplish, and allowing states Medicaid design options all seem the way to go. Mandating EITC payments into a HSA is a common sense solution for poorer working Americans to fund their HSAs. Getting young Americans after college age off their parents insurance would get them contributing and working.
The Obamacare cliff edge looms before us and the incalcitrant Senators just cut the brake lines.
- Ben Leet Jul 31, 2017
  
  This article is very perceptive. I've tried to understand the mess of health care, and this article has a good grasp. Basically costs must be reined in. Comparing other advanced countries' costs with U.S. shows we have double to quadruple the cost for identical services, procedures and medicines. The International Federation of Health Plans shows the U.S. price for everything is very high: Tecfidera (a drug for M.S.) in UK costs $663, in the U.S. seven times higher, $5,089, and you can go down the list. Why does the U.S. pay more than double other advanced nations per capita? It's not Obamacare. Other nations place price controls and make it affordable. Capitalism does not work in regards to monopoly, monopsony, and in cases of non-profit endeavors such as saving the life of a senior who has exhausted her life savings, or aiding a child who had the misfortune of being born to poor parents. Capitalism is not the solution for all human experience. Eleanor Roosevelt said, "Freedom is meaningless when you do not have bread." Wage income for 80% who are production and non-supervisory workers, average weekly earnings, has risen by 7% since 1982 while the economy per capita GDP has risen by maybe 61% say the authors Saez, Piketty and Zucman at equitable growth dot org. The Fed graph at St. Louis Fed FRED shows "Consumer Price Index for All Urban Consumers: Medical Care", and it increase by 3.6 times or 260% since 1982. The income increase for all, say Saez, Piketty and Zucman, was 61% since 1980. Answer the question "why ?". It's not an easy answer, but the system failed. My blog, Economics Without Greed, http://benL8.blogspot.com
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- John Ellis Jul 30, 2017
  
  To start with Medicaid isn't Obamacare. The Obamacare expansion probably accounts for about 12 million of the 75 million covered by Medicaid in total. The fact you don't know this gives a fair idea of your general grasp of the subject. Of the 300 million people in the US with health coverage all but about 12-14 million in the individual market get subsidies in one way and another (tax exclusions, subsidies etc.). Neither do you seem to know much about the economics of HSA's which only really work if you have an income north of 70k The median income in the US is around 56k. Obamacare although needing some tweaks isn't failing after 8 years of predictions that it would. That was why ultimately the Republicans were unable to over turn it and take insurance off 22 million people. Obamacare is here to stay. Trump may threaten to pull the insurance subsidies but if he did it would destabilize the entire individual market the larger component of which is totally unsubsidized.
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Cary Fraser Jul 30, 2017

"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. "
Is it about arithmetic, or is it about functional illiteracy?
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Kevin Lecocq Jul 30, 2017

In my life, I've experienced a wide variety of health care regimes: in the US, I had employer-sponsored insurance; in Britain I enjoyed the benefits of the NHS and in Switzerland I am currently in a system whereby every resident is required by law to purchase health insurance from one of a number of (very competent) firms. Additionally, I had free health insurance, from the Navy, when I was a US Marine.
Ironically, the best systems, in my experience, were the ones at the extremes: single providers like the US Navy or the NHS and the completely private insurance - and personal accountability of - Swiss system (although many hospitals are owned/run by the Kantons).
American health care wonks should look abroad to see what works well, and not so well, in France, Japan, Sweden, the UK, Switzerland, and Canada (as alluded in this piece). They will find a wide variety of systems, all of which work better than the current US model. 18% of GDP - really?
- John Ellis Jul 30, 2017
  
  I also have experienced several different systems but they are totally irrelevant to the US because of the path dependence which has brought us to where we are. The US is spending around 17% of GDP not because of insurers (who may be rent seekers) or Medicare/Medicaid/Chip but because of the cost of the provision of care and drugs. This is where the money is as Willy Sutton is supposed to have said. The key to containing cost in all these other systems whether they are state run like the NHS or hybrids is caps the pricing of services and drugs. The US has some but not many and this is why country spends 2-3 times what others do; doctors are paid multiples of those in Europe or Japan; medical procedures the same. Now bringing all these costs under control is going to gore a lot of ox's and the only body with the power to do it is government.
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John Ellis Jul 30, 2017

The fundamental strategic economic reality with healthcare is that it is a product for which the demand is inelastic. The birthrate won't increase if the cost of having babies fell 75% and vice versa. Thus given the hybrid nature of the American system the government is the only entity with the monopoly power and resources to both police this system and maximize its coverage. From this and the path dependence that has created the present structure everything flows. If you want to add millions to the rolls then additional money has to come from government to provide subsidies. If you want community rates and guaranteed issue you have to have the mandate in order to enlarge insurers risk pools and avoid bankrupting them. You cannot eliminate insurers from the picture because they employ hundreds of thousands of people, represent hundreds of billions in shareholder value, and cover about 175 million people mostly through employer provided coverage. Consequently any change has to incremental. This piece does a pretty good job of explaining why Republicans are never going to be able to over turn Obamacare. It's attained critical mass and become totally intertwined with the US healthcare system. Taking health insurance off 22 to 32 million people is simply not politically possible.
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bruce birkett Jul 30, 2017

I'd suggest a more two-tier solution where people who have serious problems are allowed to pay for Medicaid.
Doctors and hospitals would be reimbursed as they are in Portugal. There are public hospitals (Medicaid and basic Medicare) and private hospitals and doctors paid for privately through private insurance.
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Elizabeth Pula Jul 27, 2017

There may even be other "deeper reasons: affecting Republican motivations". Could there be specific supported attempts to distract the general public so extremely from basic legislative issues by first always using "propaganda labels" - such as "Obamacare" to attack a prior president personally? Who notices how the "popular media" repeats "propaganda messages" such as derogatory labels of key political leaders, rather than using prior accepted norms of "public acknowledgement of" titles of leadership, or basic polite first or last names, when appropriate, or even the basic names of appropriate laws and attempts to change specific laws? At this point, I doubt if even any Republican in the Senate can even name which version of which law is being attempted to be changed. Presently this administration and the continued repetition of "propaganda messages", by others that only effectively "support" the carefully instigated propaganda started by "propaganda specialists" are distracting from any common ground of any reasonable debate of even any political issues anymore. The only messages are messages to personally attack certain key individuals, even Republicans that are not favored by a certain individual who is attempting to change the position of the office of United States President into a meaningless position of perhaps?? "dictator of nonsense".
- John Ellis Jul 30, 2017
  
  @ Frederick Hastings
  
  Actually it was Volcker's credit squeeze that got rid of inflation that sparked the recovery. Reagan went on to triple the debt after massive tax cuts that he then spend six years trying to reverse them. A task that his successor and Clinton finally had to accomplish (ps. Volcker was appointed by Carter).
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- Frederick Hastings Jul 30, 2017
  
  Have you forgotten Reagan's famous quip, aimed at those who opposed his policies to address the moribund economy inherited from Carter, policies that led to a big recovery: "They don't call it Reaganomics any more!"
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Jose araujo Jul 25, 2017

Because Republicans are liars and never had any alternative plan?
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Jose araujo Jul 25, 2017

Because public Health care makes all the sense?

Can you imagine living in a country where you let kids die because their parents can't afford health are?
- Jose araujo Jul 26, 2017
  
  Anthony, you contradict yourself. You say that in America you don't let kids die because parents can't afford healthcare, and then say only people who don't want to pay die...
  
  So if a Kids parent doesn't want to spend money on health, and the kids gets sick, then he will die...
  
  I would also point you to the fact that GOP think that people who pre-conditions should pay more...
  
  America is a third world country when it comes to Healthcare,both in conditions and in performance. All because of prejudices and ignorance of the ones who don't understand why health has to be universal and public.
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- Anthony DeAngelis Jul 25, 2017
  
  I can't and anyone rational realizes the USA was never that country. Medicaid and Medicare covered the old, poor, and vulnerable. Employer provided insurance covered the majority of the rest. The ones uncovered largely did so because they didn't want to spend the money to buy an affordable, catastrophic insurance plan which would have prevented anyone from going bankrupt if they got a severe illness.
  
  When someone doesn't have homeowners insurance and their house burns down, we shake our heads, offer sympathy, but blame the individual for sure a stupid decision.
  
  When someone goes bankrupt because they don't have a simple health insurance plan we cry injustice and look for the government to solve our problems.
  
  And as usual, instead of solving problems, the government provides a solution that reduces choice, drives up cost and taxes people. Great solution.
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Joseph Zorzin Jul 25, 2017

"nobody in the US is calling for that"- that is, socialized medicine.

I guess ordinary Americans are "nobody" since many ordinary Americans would like socialized medicine.
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Chee-Heong Quah Jul 25, 2017

Simple. The question lies in the obligation of parents providing for children the needed insurance when the children are brought to this world. Since babies have not agreed to be brought to this world and to face the risks of being uninsured, the parents should bear all the costs of insurance until the kids reach maturity. If parents cannot afford the insurance for their kids, they should auction off their babies in the market for babies. Otherwise, these parents must face the court of law.
- Michael Parsons Jul 30, 2017
  
  Would this not flood the market for babies with poor quality genetic material inherited from a feckless background?The traditional method of infant exposure on cold hillsides, or state-sanctioned post-natal euthanasia seem cheaper and worked well in China, but unfortunately gives rise to chronic generational and sexual imbalances.. Given free trade, it might be viable for America's opponents to buy-up uninsured babies and dispose of them, so reducing the number of Amerians, which given their foreign policy of intervention and regime change might well be the least-cost alternative to meeting them later in battle, especially as militarisaation of cadet-cadres in US schools suggests a Pentagon infant-purchasing policy might be well-funded.
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Anthony DeAngelis Jul 24, 2017

@ Jeff Frankel - side note. How about you create a job before you call out someone's "unprecedented lack of experience and general incompetence". Whatever Trump's failings, tens of thousands of people have been employed or are employed by his endeavors. Their tax money has gone to fund your salary through all your government "work".

And people wonder why supposed experts are ignored and otherwise held in contempt.
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Anthony DeAngelis Jul 24, 2017

Gotta love the dig at Trump. Can't write an article without snark.

However "incompetent" Trump might be, at least he didn't pass this horrible "healthcare" bill.

Repeal Obamacare because it is a failure that does more harm than good. It was passed without review, it has resulted in increased insurance costs, less options and higher taxes (that's what the penalty really is).

Repeal it, make Medicaid easier to get (helping the most vulnerable), increase HSA contribution limits and remove barriers within the industry (aka regulations). This will reduce the number of uninsured and provide more affordable options for those who lose insurance from this repeal.

On a side note, it is rather amusing to hear people cry about
20MM losing insurance" as if this has been something going on for decades. An entitlement given only 7-8 years ago is treated like a Constitutional Right.

Nothing will happen because Congress is useless and the voting public is addicted to something "free" as long as others pay for it. So we lumber on with this failure in place, on top of countless other government failures, which will only increase national debt until the point where massive tax increases will be the only solution.

Welcome to the USA.
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Walter Gingery Jul 24, 2017

Obamacare was initially attacked because (a) it didn't make health care truly affordable, and (b) the individual mandate seemed like an attack on Americans' freedom.

Well, guess what? Republicans, given the opportunity,
offered a replacement that actually made things worse.

For not only did it not bring down the cost of health care, it made Americans even less free!

If you're a regular American, one of the main threats to your freedom is loss of your job through technological disruption and globalization and therewith the loss of your health insurance. followed by illness, and bankruptcy and family breakdown.

The LAST thing you want, when you're being buffeted by massive forces beyond your control, is legislation that says: "Guess what? You're on your own!"
- Phil Cartier Jul 31, 2017
  
  You'll notice Mr. Gingery that the US Senate has done NOTHING about healthcare. Also note that the Affordable Care Act was pushed by the President and his minions with mulitple lies in almost every forum-hence "Obamacare". He owns it. It was passed along strict party lines by a Democratic filibuster proof log-rolling majority in the Senate virtually unread by any of our "representatives" in Congress, except a few Republicans, maybe.
  Why have the Republicans not made any progress. Simple, they do not have a majority. They have significant number of Republicans in Name Only, liberals, conservatives and moderates. Any group of 3 can and has fouled up the process with no support from any Democrat to deal with the obvious faults in Obamacare- repressive government over-reach, excessive regulations, sweet heart deals for "special" people and factions(Including Congress and congressional employees) and numerous other failings.
  
  Mr. Frankel's article is a truly laughable collection of Democratic talking points and opinions.
  
  One other point Mr. Frankel- if Canadian healthcare is so great why do US Hospitals just across the border do a booming business in procedures hthat have grossly long waiting times I have quite a number of friends in Canada. They all say that their healthcare system if pretty good for common family practice problems for young families. For anything else it is nearly worthless.
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