Obamacare: Too Small to Succeed?

Obamacare: Too Small to Succeed?

The problems with the Affordable Care Act stem from government being too small and weak, not too big and powerful.


Just a few weeks ago, on the heels of the Tea Party’s disastrous shutdown of the government, pundits were predicting a sea change in American politics. Republicans were on the run, while Democrats were looking to recapture the House and revive a can-do, muscular liberalism. Oh, how things have changed! Now the conventional wisdom is that the various snafus in the rollout of Healthcare.gov have reversed the political dynamic. On Fox News, Charles Krauthammer and Bill O’Reilly crow about the “end of modern liberalism,” the New York Post declares an “Obamacare Overreach,” and Congressman Paul Ryan (who, as my colleague Lee Fang points out, once quietly requested Obamacare cash for his own district) brays on about how Americans are witnessing—and rejecting—“big government in practice.” Even mainstreamers like The New York Times’s Ross Douthat, invoking Jonathan Rauch’s tired, Clinton-era jeremiad against the size of government, blame Obamacare’s failures on bureaucratic sprawl, because “government spends and regulates so much.”

It’s a nice parable, full of the tidy parallels that make the No Labels crowd swoon: as Republicans have pushed their monomaniacal hatred of government too far, so Democrats have fallen into the hubris of thinking that big government can solve everything. It’s also total bullshit.

At this point, we don’t know if the Affordable Care Act will eventually succeed and endure, and anybody who tells you it will or won’t is indulging in ideological wish fulfillment. What does seem clear is that unless circumstances change, it will fall short of its original goal of insuring 27 million Americans by at least 5 million people—and perhaps many, many more. These shortcomings, however, are a result of government being too small—too clipped, constrained, underfunded and underpowered—to achieve Obamacare’s policy aims, not vice versa.

Here’s how the Affordable Care Act ran into trouble. The drafters of the law planned to insure 16 million poor and near-poor Americans through an expansion of Medicaid. As a carrot, they fully funded the expansion at the outset and funded 90 percent of it by 2020—a formula much more generous than what’s currently offered. As a stick, they designed the law so that states that refused the expansion would lose their Medicaid funding. When the Roberts Court upheld the individual mandate (the requirement that Americans purchase health insurance or face tax penalties), it also broke that stick, allowing states to opt out of the expansion without penalty. Since then, twenty-one states, all of them controlled by Republicans, have done just that. As a result, about 5 million Americans, the majority of whom are people of color in the South, will fall into a coverage gap. They are ineligible for Medicaid and will be required to purchase insurance. At the same time, they are too poor to qualify for the ACA’s subsidies. But nota bene: the plight of these poor Americans is not a result of any flaw in the original law; it’s due to the Roberts Court’s gutting of one of the law’s crucial levers and the wave of GOP cruelty politics that ensued.

It’s a similar story with the much derided federal exchange. Yes, the IT whiz kids in the administration failed to live up to expectations. And yes, the president made a mistake when he claimed—in a foolish attempt to rhetorically minimize the law’s impact—that people who buy insurance on the exchange can keep their plan if they like it. But those missteps—one bureaucratic, the other political—aren’t the main problems with the federal exchange. It’s that Healthcare.gov was never supposed to be the focal point of the ACA.

That task was delegated to the states, which, again, failed to step up (of the thirty-six that refused to establish exchanges, twenty-nine are GOP-controlled). This meant that Kathleen Sebelius’s HHS was left scrambling to build a federal marketplace, for which there was never adequate funding in the law—a fact she repeatedly reminded Congress of when she begged them, to no avail, for more money to finish the job.

In at least thirteen states, GOP lawmakers have engaged in more than just passive noncompliance. They’ve attempted to cripple Obamacare by passing a wave of “navigator laws” designed to prevent healthcare advocates from helping people sign up at the exchanges. Missouri, for example, has made it illegal for state and local officials to provide “assistance or resources of any kind” to the exchange unless required to by law. Indiana charges advocates as much as $175 to become navigators; Texas requires sixty hours of state training. Such barriers—which also include proof of residency, fingerprinting or background checks—are purportedly aimed at insurance fraud, but they have as much relation to that “problem” as voter ID laws have to the so-called problem of voter fraud: which is to say, none at all. As Ethan Rome of Health Care for America Now puts it, “We’re not talking about states remaining neutral. We’re talking about proactive, ideological sabotage.”

It’s not clear whether these daunting challenges can be overcome. But it is clear that in many of the sixteen states that have fully implemented Obamacare, the law is largely working as it was intended to. In California, as of November 9, more than 60,000 people have purchased health insurance on the state exchange and another 72,000 people qualified for Medicaid expansion.

A single-payer system would certainly have been simpler, better and ultimately more cost-effective. So would an expansion of Medicare and Medicaid along with a nationwide public option. Either proposition would vastly expand the reach of the federal government. Anyone interested in building public support for such a shift can do so by cutting through Republican spin about the reasons for Obamacare’s failures and getting at the truth: far from being too big to work, it was chipped away by opponents who hope it’s becoming too small to succeed.

Zoë Carpenter looked at the threats to Obamacare in a recent blog post.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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