Proponents continue to distort Obamacare’s failures, tragedies

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Reid and Obama / The White House, used under government works license
Reid and Obama / The White House, used under government works license

WASHINGTON, March 1, 2014 — Harry Reid’s claim that all of the negative stories about Obamacare are lies is astonishing. Paul Krugman’s New York Times column raises that astonishment to disbelief.

Obamacare’s proponents claim that millions have benefited from the new law. Dependent children aged 23 to 26 now qualify to remain on their parents’ plans. While this is a benefit for the child, it raises the cost of family plans for everyone who pays for one. This is a case of a few people benefiting while the vast majority pay more.

Millions of people are expected to pay less for their health insurance because they receive a government subsidy. That is, money collected from taxpayers will be used to subsidize people who cannot afford to pay for their own health insurance. This is a benefit to low income people, but it is a cost to everyone who pays higher taxes and higher premiums for their health insurance. Again, a few people benefit while most pay more.

We might point to previously uninsured who will now receive Medicaid benefits. These come at no cost to recipients, but they result in higher tax liability for the rest of us. Medicaid can’t get doctors to work for free.


There are other harms from this law aside from higher taxes and insurance costs. When prices of products and services are raised, the quantities demanded fall. That’s why raising the minimum wage, for instance, reduces the demand for labor and causes job losses.

If workers become more expensive to employers because of added benefit costs, the number of jobs available will also decrease, just as if wages had been raised. The labor costs imposed by Obamacare’s employer mandate will cut labor demand, though there is a lot of disagreement about the amount.

It will also reduce labor supply, inducing people to leave the workforce. The CBO projects a 2 percent reduction in hours worked between 2016 and 2024, almost entirely due to changes in labor supply.

Many people who want health care coverage for all Americans — a goal most of us would support — want desperately for the Affordable Care Act to succeed. The true believers, though, will say whatever  is necessary to reach the goal, regardless of the truth. Despite the promises, millions of people will be forced to change doctors. Tens of millions of people are paying higher premiums and higher deductibles. Millions will be forced to go to hospitals not of their choosing. Tens of millions of people have had or will have their policies cancelled, even though they like those policies.

The astonishment occurs when Harry Reid, the majority leader of the Senate, accuses the tens of millions of Americans who have suffered because of this poorly constructed and extremely partisan law of lying. With a straight face, he said something that by now most people know to be false: He said that not one person has suffered because of the Affordable Care Act.

Paul Krugamn is a brilliant and accomplished economist. Yet his feelings on Obamacare are so powerfully partisan that he can no longer distinguish reality from desire. He calls the Obamacare horror stories a bunch of “hooey.”  Like Harry Reid, he believes that Americans are either delusional or liars.

When the proponents ask, “You don’t want to go back to what we had before, do you?” the answer is generally “yes.” What millions of us had before was better than Obamacare, even considering the problems, and we wanted to keep it. Ten percent of the population lacked health insurance, and a few percent were hurt by lack of coverage for things like pre-existing conditions. The remaining 85 percent of Americans were generally happy with their insurance plans.

Obamacare addresses the concerns of some of the bottom 15 percent of income earners while it clobbers the other 85 percent of us with much higher costs, fewer choices, and eventually poorer quality. The Affordable Care Act is on balance destructive, and the means used to impose it un-American, no matter how the proponents spin it.

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  • John Lynch

    This piece seems to me to lack the very balance it accuses Obamacare proponents of displaying. All the ill effects you attribute to Obamacare were “pre-existing conditions” – some of which are exacerbated by Obamacare and others ameliorated. Narrow provider networks are nothing new and are an essential tool for containing costs; neither are physicians refusing patients with coverage in plans they don’t accept.

    I’m not a true believer in Obamacare and have criticized it extensively on my own blog. I am a realist, however, and recognize the deep-rooted flaws in our healthcare system that have nothing to do with Obamacare. Its failure to grapple with the greed, incompetence, and outright threat posed by our broken healthcare system are among its greatest flaws. But do you really think repealing it will solve those problems? Get real – all undoing Obamacare will do is give even freer rein to these abusive practices that thrive most in our least regulated states.

    As for the costs to cover more of our poorest citizens, I consider that a matter of priorities. If we’re OK subsidizing corporate interest in all other spheres – from farming to defense, from colleges to prisons – then why aren’t we OK with subsidizing what’s needed to protect human lives, our fellow Americans?

    I’m extremely comfortable with that. Why aren’t you?

  • howiem

    The American people are only “comfortable” with the collusion of government and corporations because the American people are mal-eduucated, and ignorance is bliss, until it comes back to bite. The corporations can get away with this only because the politicians say yes, and they say yes when their coffers get filled with legal bribes called campaign contributions. The voter ignorance enables the election of corrupt politicians, so we have to look in the mirror to find out why we can’t get governance.
    On Obamacare:

    Perhaps what you should be asking is why a law that was alleged to do so much good for
    so many is doing so much harm to so many, and is that an intended or unintended
    consequence? We have no idea of how much
    more harm it will do to how many in the future? Since Obamacare was just a bill in congress, we
    were not told about any potential harm that it could do if it became law. Why didn’t the original bill(s) at least
    contain a list of foreseen harmful consequences before it was signed into law? One
    reason is that the bill was not complete when it was signed into law; not only
    were more rules and regulations with their foreseen and unforeseen consequences
    added after the bills became law (which should never happen), but more
    unforeseen consequences will result as time passes. How many more foreseen
    harmful results will we see in the future? We are just beginning to see the tip
    of the consequences iceberg. There are a lot more impacts to come; and
    while some might help people, others might harm people. So the balance you are
    seeking should be why doesn’t legislation tell us what might go wrong as well
    as what might go right before ram-rodding legislation through congress?

    The fact
    that Obamacare is more about health insurance than it is about health care cannot
    be denied. If forecasts of doctor shortages are even remotely accurate, we can
    have all the insurance that our little hearts desire, but we’d better hope that
    non-prescription drugs can kill the pain, because our insurance policies will
    not, nd are quite hard to digest.

    I don’t think we can gloss over concerns about
    why we were lied to about being able to keep plans, doctors, and coverage that
    we liked. What lies have not yet been revealed? Obamacare is about economics as well as
    healthcare insurance. And because it will impact the economics of everyone in
    some way, we cannot just look at Obamacare in a healthcare insurance vacuum. We
    must also consider the ripple effect of economics that essentially says that
    every economic activity impacts other economic activities.

    Although your complaints about greed, corruption and waste are justified, how many of those complaints are because of prior government actionsand/or the nature of
    government? You do not know all the
    future impacts of the many thousands of rules and regulations that Sebelius and
    other cabinet members added into Obamacare AFTER it became law, so how can you be so sure that Obamacare should be kept? Isn’t the real question whether or not there is a better solution? There are many possible ways to improve healthcare and healthcare insurance, but there is no perfect way. What kind of law says that even if you can afford to pay to live. you will
    be denied the health care it takes to keep you alive by some unelected appointees
    who answer to no one and whose decisions are final? Inflationary policies (which
    all government programs are), will, in the longer term cost the poor more as well,
    even if they are not paying for health insurance. When some have to pay and others do not,
    prices have to be increased or costs reduced. When people are down to less than 30 working
    hours a week and thus earning less, yet as working people, they are supposed to
    be subsidizing Obamacare, inter-alia, and costs of consumer products rise, just
    who is supposed to pay for all of it? When
    prices of consumer products rise, the consumers pay more, and we are all
    consumers, even the poor. While the poor might not pay for Obamacare
    insurance, and do not pay federal income tax, they do pay taxes in other
    ways. Inflation is a tax that everyone
    pays. You seem to imply that government
    is the way to reduce costs; but if that is true, why do the costs of government programs keep rising? Are you discounting the impacts of other
    inflationary government actions on costs of all government programs, just
    because the term ‘inflation’ is rarely mentioned in connection with the
    programs? A study was done some time
    ago (I believe it was at Southern Illinois U.) which indicated that the impacts
    of new government policies cannot be measured for at least 6 months to 2 years
    after the policy has been implemented and can take much longer in the
    case of complex policies. Obamacare is
    an extremely complex policy, and since some of the early indications are that
    it is causing harm, costing jobs needed to pay for it, and is really only “fair” to the politicians who
    got votes for getting it passed, plus bureaucrats and technocrats getting 6
    figure salaries to run wasteful, corrupt, and fraudulent programs.

    If legislation
    is intended to do good, then should it also do harm, especially when at least
    some of that harm will be to those who are supposed to get the “good”?

    Should we
    have laws allegedly to help people if they also cause harm? Isn’t that unfair? Especially in a free country, laws should not tell
    us what we must do. Laws should tell us what we must not do and prescribe the
    punishment for breaking those laws. When we allow government to tell us what we
    must do, we become slaves to government. At this point, one might be inclined
    to compare the U.S.A. with other countries, but that usually discounts all
    American history, tradition, demographics, and the fact that we are not a cohesive
    country. In fact we are getting less cohesive every day because of the push for more ‘diversity’ of input rather than best outcomes.

    You may
    get your wish to keep Obamacare, but you might find it a case of regretting that
    your wish came true. There are many
    proposals on how to improve healthcare, one needs just to look around for them.

  • John Lynch

    Whew – you said a mouthful! But I appreciate your constructive tone and absence of vitriol. I’m afraid, however, it’ll be impossible to respond with brevity.

    A few things. Of course we should be asking if there’s a better way – but that’s not something the opponents of Obamacare put forth, was it? If all you have is one proposal for “reform” – and if you don’t think it needs reforming, then maybe this makes sense – or to do nothing, then who’s asking for a better solution? You’re theoretically correct, but without basis in political reality.

    And laws SHOULD have rules and regulations to implement them. You seem to abhor this necessity, but – again, realistically speaking – laws aren’t meant to be written in the detail required for their implementation. Virtually all laws require rules and regulations – and often legislative revision – in order to be properly implemented. There are always unintended consequences and some of them can be fixed when that’s a shared legislative agenda.Without them, laws would sit on the books without enforcement – which I’m guessing you’d prefer.

    While much of what you say makes sense from the treetops – as economic theory, that is – it isn’t of much real-life value, in my opinion. It’s one thing to argue that the poor are benefiting at the expense of the less poor – and, to some degree, they are – it’s quite another to argue that the poor will suffer from price increases down the road. The poor are trying to survive day-to-day, not worrying about vague pricing pressures somewhere in the future.

    What I find most interesting is your apparent presumption that we didn’t have great price pressure before Obamacare. Healthcare costs have been increasing at multiples of non-medical inflation for decades – and have, in fact, slowed down since Obamcare was passed (I know, lots of reasons for that – but wouldn’t Obamacare be blamed if it were the other way around? You know it would).

    Look, this thing ain’t perfect – by a long shot – but the responsibility we all share is to make it better,. That’s what usually happens with such epic legislation. But the current toxic political climate has thrown that usual legislative function into limbo in favor of the repeal construct – back to business as usual. No thanks.

    What I find your most glaring omission is your complete lack of acknowledgement of responsibility beyond the political realm. The real problem with our healthcare system is very much driven by doctors and hospitals, not politicians,. Yes, they buy off the pols with campaign contributions – no industry more so than healthcare – but it would be even worse with no government constraints. I refer you to the data of our least regulated states – which virtually all manage to rank among our worst performing and highest cost states for healthcare.

    It’s not just political and corporate corruption – it’s medical corruption that’s even more culpable. Nothing gets done in healthcare without a doctor’s order. Nothing. And no industry has a fraction of the fraud settlements with the government as our healthcare industry – responsible for more such settlements than all other industries combined – times FOUR! Where’s the outrage about THAT?

    You’re looking at the wrong set of problems. You’re messing with the landscaping while the house is burning down.