Obamacare

 The political struggle over Obamacare has reached a critical inflection point as real events have overtaken its opponents’ basic arguments.  That opposition has always drawn on, and encouraged, doubts about the public’s real interest in a federal guarantee to health insurance and their tolerance for a mandate to enforce it.  After the program’s fitful start, it is now clear that large numbers of Americans are prepared to spend the considerable time and money required to sign on. The Rand Corporation estimates that 9.5 million people who had no coverage a month or a year ago now do, thanks to the Affordable Care Act (ACA).  I also analyzed the data and found that the newly-insured number at least 7.8 million and as many as 10.9 million.  And if the governors and legislatures in 24 states had not inexplicably turned down the ACA’s Medicaid expansion – a decision three of those states are reconsidering -- the total number of newly-insured today would range from 11 million to 14 million.

            These numbers create a political inflection point, because the program’s demonstrated appeal renders it virtually impossible to repeal.  Arguing against a new federal benefit is an easy political challenge for conservatives.  By contrast, withdrawing a benefit that millions already depend on is, at best, a herculean task.  Just try to imagine any future Congress or President actually withdrawing practical access to medical coverage from millions of moderate-income families, millions of young adults covered by their parents’ policies, and millions of more people with preexisting medical conditions. 

            This political inflection point will strengthen not only as more people enroll, but also, and even more important politically, as Obamacare generates benefits for everyone else.  To begin, surveys show that several million people would like to change jobs but stay where they are, out of concerns about losing their healthcare coverage.  Now, they can do as they like – and the enhanced labor mobility should help the economy.

            More important, by enrolling large numbers of previously-uninsured people, Obamacare should slow increases in everyone’s insurance premiums -- or even lower premiums.  As countless studies have shown, most people without coverage get their medical care in emergency rooms.  Since they usually cannot pay the bills for that care, hospitals pass along those costs through higher charges on everyone else, which in turn leads to higher insurance premiums.  The ACA will not only relieve some of those direct pressures on premiums; its mandated coverage also will generate more income for insurers, further easing upward pressures on premiums.

            This would be very good news for the American economy.  Over the last decade, healthcare coverage has been the single, fastest-rising cost for most U.S employers.  But as globalization intensifies competition, many of those employers find themselves unable to pass along their higher healthcare costs by simply raising their prices.  Their only recourse, as I have written many times, has been to cut other costs – beginning with jobs and wages.  In the end, therefore, the ACA could contribute to broader gains in employment and incomes – and that could produce a political inflection point that could support political realignment.

This post was originally published on Dr. Shapiro's blog  

            With a good part of the federal government now closed for business, the pathologies driving it are too obvious to ignore.  The diagnosis begins with the fact that there is no partisan argument this time about overall federal spending.  The White House and congressional Democrats have accepted the arbitrary cuts of the sequester process, despite evidence that they are slowing the economy.  Instead, the rightwing of the House GOP is holding normal government operations hostage to a variety of demands tied the Affordable Care Act.

            Obamacare has been a festering focus of Tea Partiers since 2010, when its passage helped elect a number of them to Congress.  Three years later, their continuing single-mindedness about those reforms has begun to look like a pathological obsession.  Too strong?   Their threats to close down Washington unless President Obama agrees to give up his signature achievement – and their deluded confidence that they can bend him to their will -- have been utterly unaffected by not only the results of the 2012 elections, but also by the prevailing consensus that their strategy will cost the GOP even more in 2014.
 
            This week, the pathology spread to Republican leaders.   Since Tea Party members make up less than one-quarter of the House GOP and an even smaller share in the Senate, they always need support from their more moderate colleagues and Party leaders to carry out their threats.  Those leaders and colleagues have for weeks publicly opposed the Tea Party strategy – that is, until this past weekend.  After months of being held hostage themselves to Tea Party threats of insurrection and primary challenges, House Speaker John Boehner, Senate Minority Leader Mitch McConnell and most of their associates have now identified with their captors and adopted their worldview.  In short, they’re suffering from a political version of “Stockholm Syndrome.”  If they don’t recover quickly, much of the national government could remain closed for a long time.  
 
This post was originally published in Dr. Shapiro's blog.