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.