Not Dead Yet: a Very Short and Casual History of Obamacare

Since the dramatic collapse of the bill to “repeal and replace” the Affordable Care Act more than a week ago, I’ve been thinking about why that happened and what it means.  I want to share some thoughts with you about why the repeal effort failed, and a wider lesson that the event may offer. I’m going to post that comment separately. As a sort of preface to those thoughts, I think it’s worth reviewing how the ACA got here.

Contrary to the popular narrative of its opponents, Obamacare wasn’t really a gigantic takeover of an otherwise private health care industry by a heartless federal bureaucracy.  It was part of a painfully slow, piecemeal effort to take care of everybody’s health needs.  The Affordable Care Act added some building blocks to programs enacted over four decades earlier, Medicare and Medicaid.  Medicare provided health care for everyone over 65, and Medicaid covered (through a state-federal partnership) health care for specified categories of people. The categories probably reflected ideas about who was likely to be unable to work enough to get health insurance through an employer.  These programs provided health care to many, but they left out many Americans whose incomes were too low to afford private insurance but who didn’t fit into the Medicaid categories.

Over the decades, we got better at treating illness and injury of many kinds, but the costs of innovative medications, new technologies for diagnosis and treatment, and other health services soared.  These rising costs made health care less affordable in at least three ways: health insurance premiums skyrocketed while wages did not; health plans left more for individuals to pay out-of-pocket; and employers cut back on health benefits or reduced the share of premiums that they paid.  In addition, health plans capped lifetime benefits, froze out some in ill health who hadn’t bought insurance while still healthy, and limited coverage in other ways – all efforts to address runaway prices that also sometimes kept those in greatest need of care from getting it.

Meanwhile, there were all those people we had completely left out because they didn’t earn enough to pay for health care.  That was simply unjust – contrary to our fundamental values, which include looking after one other when trouble strikes.  Just because health care had become complicated and expensive, we couldn’t forget that humans get by and thrive by caring for each other, working together.

Leaving people out was costly in other ways: productive workers were sidelined when they couldn’t get treatment; family members were unable to continue working, or had to work less, when they had to care for those who didn’t get early diagnosis and treatment.  Healthcare expenses spiraled further upward when the costs of caring for uninsured patients who became severely ill were passed along to those who could pay, increasing prices.

In response to the growing crisis of unaffordability and unfairness, President Obama and his supporters in Congress looked for a way to provide health care for all.  In the aftermath of the worst financial crisis since the Great Depression, there was resistance to raising taxes enough to solve the health care crisis in a fully government-funded way – such as the Canadian model, or providing Medicare or Medicaid for everyone.  Instead, Democrats settled on a model drawn partly from one previously adopted in Massachusetts under a Republican governor (Mitt Romney). This approach provided government health care to those with low incomes, required everyone not qualified for government plans to buy health insurance or pay a tax penalty, and subsidized the required private insurance premiums so that they would be affordable.  It wasn’t elegant or easy to understand, but it filled in many of the gaps in affordability and fairness.  And because something like it had passed in Massachusetts with bipartisan support and Republican leadership, it seemed like a middle ground that might gain votes across the aisle.

Republicans, however, took no notice of the bipartisan origins of this idea.  They objected vehemently.  As a result, Democrats cobbled together, in the face of implacable opposition, a law designed to approach universal health care by degrees, an incremental approach, yet one for which only they would vote.  This left their opponents free to decry the law’s complexities and inadequacies, even though some of the shortcomings resulted from the unsuccessful attempt to fashion something that would be supported across the political spectrum

The ACA has been far from a complete solution.  First, it hasn’t successfully controlled the rapid rise in health care costs, partly because it avoids the heavy hand of directly regulating health care provider prices.  Second, because of a successful legal challenge, the expansion of Medicaid became optional, leaving many uncovered in States that refused to expand (including about 70,000 in Maine alone).  Third, ongoing legal challenges and obstruction have placed some features of the law at risk and made it impossible to fix errors and omissions, because the answer of opponents was always “repeal it,” and the balance of power in Congress allowed those opponents to block corrections and improvements.

While limiting the reach and effectiveness of the law as much as they could, the same opponents were quick to blame the continuing unaffordability of care on the very existence of a government solution.  Knowing that President Obama would veto the measure, they promised, and voted, to repeal the ACA time and again, claiming that they would, just by doing so, usher in a new era of cheap, high quality care for all.  Of course, repeal would have done no such thing, but there was no need to worry about that.  Voting for repeal with no risk of success was politically easy:  it showed solidarity with those frustrated by the ACA’s imperfections, without having to address the consequences of actually demolishing it.

Everything changed on Election Day in 2016, when repeal actually became possible.  Suddenly, it wasn’t so simple to advocate extreme measures.  My next post is about what I think we might learn from the turn of events in late March, when a measure to repeal and replace the ACA failed.

Charlie Dingman

About Charlie Dingman

Charlie Dingman likes to write and talk about politics, economics, and law. Through this blog, he hopes to share with you some of his thoughts about those subjects, and how they connect to our daily joys and struggles, and to the highest values of humanity.