Big Thinking About ObamaCare: Wednesday Focus for August 6, 2014

Coffee yesterday with Peter Gosselin. Back in the day, when he worked for the Los Angeles Times he was one of the very very very best reporters covering American healthcare and related subjects. Then he was Tim Geithner’s speechwriter. Now he is doing something at and, I think, underutilized –at least I find myself learning a lot less from him these days then I used to learn.

And at coffee he put me on the spot. He asked me what big thoughts I had about the implementation of the Affordable Care Act.

So I stammered something relatively incoherent…

Now, however, I have had a chance to regroup. I have had an opportunity to bring some things that were barely or unconscious into the full light of reason. So I would like to try to do a better job…

Ten points:

1. This is an ugly sausage. It had to be passed with only Democratic votes. I did see this before. In the run-up to the 1993 Reconciliation bill, Bob Dole pledged that Clinton would get no Senate votes from Republicans. It was not, you understand, because Dole thought the policies were bad policies. It was because he wanted no Republican fingerprints on the bill, so if the economy tanked Republicans could use it as an issue. Not personal, or policy, just political. It seemed to me at the time that this was a rather silly thing for Dole to do. The Clinton economic policies were likely to work–they were, by and large, good policies. Republicans were much more likely to be eager to share credit for the boom than eager to run against Clinton on the economy. Forcing passage via Democratic votes degraded the quality of the bill from our perspective, but degraded it much more from Dole’s perspective.

   So it has proved with the ACA. The ACA was the best bill that could have been passed given that McConnell had persuaded Brown, Collins, Snowe, and Voinovich to oppose it rather than to bargain their votes to improve it. The ACA was much better than nothing. And the ACA is something that moderate Republicans are already profoundly unhappy they let themselves be bullied into lining up in opposition to. Everyone who gains coverage via the Medicaid expansion or via the Exchanges or who sleeps easier because they know they will still be able to afford health insurance if they lose their job knows that the Republicans wanted to keep them from getting that benefit–the Republican Noise Machine has made sure of that.

2. The Republican-Heritage Foundation piece of the bill–the exchanges–appear, to me at least, to be functioning much better than expected. I thought, given the amount of brainpower health insurance companies devoted to gaming the system, that they would have been able to blast large holes through community raining by crafting policies that only an idiot with chronic conditions would sign up for. That has not happened. Yet. But I am now considerably more optimistic about the possibility of providing effective social insurance via a health insurance marketplace dominated by for-profit insurance companies than I once was.

3. Where the Medicaid expansion has been allowed to take effect, it has taken effect. People are going to the doctor more, people are finding doctors to go to, and the only minus is one that we already knew: that Medicaid is not a terribly good way to spend our money in treating people with chronic conditions.

4. I still cannot believe that anybody smart and energetic enough to become president could have focused as little on and had as little idea how to manage the implementation of his career signature initiative as Barack Obama.

5. Matching Barack Obama on not understanding the situation is John Roberts: if you are going to rewrite the Medicaid expansion part of the law from the bench, you first brief yourself on what the Medicaid expansion is. You thus know that even though the reduction in Disproportionate Share payments is in another title of the bill that it is part of the Medicaid expansion. You thus know that the income floor for citizen subsidy eligibility at 138% of the poverty level is part of the Medicaid expansion. John Roberts did not do his homework when he legislated from the bench. And so he turned what was already an ugly sausage into a true dog’s breakfast.

6. The end of rapid health-care inflation has been astonishing. It is hard to see how it can possibly be a thing unconnected with the ACA. But it is not clear what the important connections between the passage of the ACA and the slowing-down of health-care cost inflation have been.

7. The willingness of state-level Republican politicians to hurt their own people–those eligible for the Medicaid expansion, those who would benefit from a little insurance counseling to figure out how to take advantage of subsidies, those hospitals who need the Medicaid expansion to balance their finances, those doctors who would ultimately receive the subsidy dollars–is, as John Gruber says, “awesome in its evilness”. The federal government has raised the money, and all the state has to do in order to get it spent is to say “yes”. Especially in contrast with the extraordinary efforts state-level politicians routinely go through in order to attract other spending into their state, whether a BMW plant or a Social Security processing center, this demonstrates an extraordinary contempt for a large tranche of their own citizens. And when I reflect that a good third of that tranche reliably pull the lever for the Republican Party year after year…

8. The current disaster scenario involves Republican mega-sweeps in the 2016 election. But even in that case the ACA does not die. It gets implemented in Blue States and in half or so of Red States–and the other half of Red States fall even further behind the rest of the country than they are already. Think of TANF in the 1990s: a small plus for the poor of Blue States that had good ideas for what to do with what had been their AFDC money, and a large minus for the poor, especially the deeply poor, of Red States that did not have good ideas.

9. With the ACA we have placed a lot of bets. The important thing for policy now is to let them ride and see how they come out. The thing to avoid is revisiting the issue until we have a sense of what in the ACA is working and what is not.

10. Come the 2020s the Cadillac Tax will start to bite, and we will have to decide whether we are happy with the shift from an employer-sponsored to individual-purchase-via-exchange insurance market regime that the Cadillac Tax will impel. We will have a much better idea then of what we should do than we can have now.

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