A certain measure of Obama’s success was the inevitable product of a Democratic president enjoying huge majorities in both chambers of Congress for his first two years, successes any Democrat would have enjoyed. But some of Obama’s most important achievements came about because of decisions he made that cut against the instincts of many of his fellow partisans.
Unlike the economic crisis, the American health care crisis was not a discrete episode, but a humanitarian and economic disaster that built up slowly over the decades. The United States stood alone among its peers as the only industrialized democracy that did not offer access to medical care to all its citizens. As a result, Americans had come to live with cruelties that would be unimaginable in most of the world—people unable to treat fatal cancers; children unable to receive antibiotics when ill; broken bones left uncast; surgeries forever postponed . . . The examples went on and on.
At the same time, the United States spends considerably more on health care than any of its peers without obtaining detectably superior results. Before Obama took office, the United States spent about twice as much per person on health care as countries like Canada, France, and the United Kingdom. For decades, the cost of health care had grown much faster than the cost of other goods and services. Even though the government covered a far smaller proportion of its citizens than governments in countries with universal health insurance systems, per capita spending by the government alone—exempting the enormous private sector spending in the United States—exceeded all but a handful of its peers, simply because the cost was so high. The system was the worst of all worlds: ghastly, bloated, cruel, combining the worst elements of big-government inefficiency and dog-eat-dog private sector callousness.
For people who could get insurance through their job, the cost problem was a huge, albeit mostly hidden, bite out of their paycheck. For those who worked on their own, or whose employer did not provide insurance, the system was a true nightmare. The individual market was rife with “adverse selection”—that is, the people most interested in buying insurance were the sickest ones who needed insurance the most, driving up the cost, and further pricing out all but the most desperate customers. The individual insurance market was geared almost entirely around making sure an insurer didn’t get stuck footing the bill for a sick person. Any customer with a preexisting condition could be charged exorbitant rates, or denied coverage altogether. Older customers (who are at higher risk of illness) could likewise pay unaffordable rates. And insurance companies protected themselves from becoming stuck with an expensive customer by tacking on all sorts of fine-print conditions that would let them cut off reimbursements, or kick the customer off their plan altogether, if his or her costs reached a certain point. Three-quarters of Americans who went bankrupt due to medical costs actually had insurance; it’s just that the insurance they had didn’t actually protect them from catastrophe.
No wonder even customers who could afford to buy health insurance on the individual market didn’t like it. Forty-five percent of customers with nongroup insurance plans rated their coverage “fair” or “poor.” Just over a third as many Americans with group insurance gave their plan such a poor rating—18 percent of people with employer coverage, 17 percent with Medicare, and 16 percent with Medicaid rated their coverage “fair” or “poor.” A market where insurers had to scrutinize each patient for signs of weakness, and ruthlessly weed out the most vulnerable, was a comprehensive failure. Merely toting up the tens of millions of Americans without any health insurance failed to capture the dysfunction in the system. All but the lavishly rich were one misfortune away from medical ruin.
The normal structure of any public problem is that, the worse the situation, the greater the pressure to solve it. If your country is enmeshed in a disastrous war, then the more soldiers die, the more people demand peace. If your city’s atmosphere is choked with pollution, the smoggier it gets, the more citizens will demand cleaner air.
The American health care system is the rare disaster that defied this dynamic. The worse it got, the harder it became to solve. The system’s increasing bloat simply meant that more and more doctors, hospital administrators, insurers, drug companies, and medical equipment suppliers had a stake in perpetuating the status quo; every dollar of waste was a dollar of somebody’s income. And the more Americans lost their insurance, the more the remaining majority who had it came to fear change—they, too, saw themselves as the lucky or deserved beneficiaries of the status quo, and clung more tightly to the insurance they had.
Harry Truman, Lyndon Johnson, Richard Nixon, and Bill Clinton all attempted and failed major overhauls of the system, which seemed over time to grow increasingly impervious to change. But among Democratic activists, health care reform remained a cherished cause, the centerpiece of their idea of what a presidency ought to accomplish. Obama, like his rivals for the 2008 nomination, pledged to attempt health care reform, and his contacts during the campaign with ordinary people victimized by the system deepened his conviction. The plan his administration devised broke open the political vise that had thwarted reform for decades.
Obama proposed to cover the uninsured by blending two ideas that had worked elsewhere: Medicaid, a Johnson-era program to cover the most destitute, would be expanded to cover uninsured people with incomes up to around $15,000 a year (or more for a family). People with incomes above that level who needed insurance, and couldn’t obtain it through their job or Medicare, would be able to purchase a private plan through new exchanges, modeled after an innovative program that then-governor Mitt Romney had successfully implemented in Massachusetts in 2006.
The exchanges would solve the adverse selection problem by creating a balanced pool of healthy and sick customers alike. Insurers, who before could mainly charge whatever they wanted, could now only charge older customers up to three times as much as they charged the young; they could not charge higher rates to customers with preexisting conditions, nor could they cut off payments to a customer who came down with an expensive condition. In the past, some states had tried to make insurance available to sick patients by preventing price discrimination against the old and sick, without doing anything to ensure younger or healthier customers bought plans, too. Those reforms always failed, since sicker customers would rush in, driving up the cost of premiums, driving out healthier customers, causing prices to rise even higher, and making the product unaffordable. Since insurers wouldn’t be able to turn away people who were sick, there had to be an incentive for healthy people to buy a plan—otherwise, they would save money by skipping out on insurance until they got sick (driving up premium costs for everybody who did buy insurance). Romney’s solution was an “individual mandate”—a requirement that everybody buy health insurance, so they couldn’t free-ride off the system and the companies could have a more balanced risk pool. Such a mandate has always been unpopular—a fact Obama exploited against Hillary Clinton by opposing it during his primary campaign—but as president he acknowledged it was necessary to make the plan work.
Of course, you couldn’t require people to purchase insurance unless they could afford it, so the government would make insurance available by providing tax credits to people buying insurance in the exchanges. (It already subsidized the cost of health care for people who get it through their job by making employer-provided health insurance tax deductible.) But where would the money come from? Romney had gotten a big lump payment from the federal government, which at the time had a Republican administration eager to pay the cost for an experiment in market-friendly health reform that might become a model for the party. Obama would have to come up with the money to pay for the tax credits, along with the expansion of Medicaid.
Obama had promised during the campaign not to raise taxes on families earning below a quarter-million dollars a year. He could raise some money by increasing investment income taxes on the rich, but not enough. Obama convinced the medical industry that reform was likely to happen, and that they could ensure the outcome was something they could live with by cutting a deal. This was, in fact, what happened: hospitals, doctors, and drugmakers agreed to hundreds of billions of dollars in new taxes or in cuts to Medicare reimbursements, in return for the government agreeing to subsidize tens of millions of new paying customers.
Understandably, Obama’s critics on the left and right alike both complained about the seediness of giving stakeholders such influence over the shape of the bill. But the industry had played a major role in killing previous efforts at reform in the past, and neutralizing its opposition gave Democrats their best chance to succeed. For better or worse, this kind of horse-trading was how even the best kinds of major legislation often got written, and it went both ways: the threat of a health care bill that might be written without the industry’s input was enough to persuade it to pony up its share of the hundreds of billions of dollars needed to cover the uninsured.
Financing the health care bill was a massive political achievement, the solution to a puzzle that had confounded generations of liberals. (The last time Washington had created a new entitlement—the Bush administration’s expansion of Medicare to cover prescription drugs—it simply added the entire cost to the deficit.) But the Obama administration hoped to do more than cover the cost of its new spending. It aspired to gradually overhaul the economics of American medicine.
Doctors and hospitals have traditionally been paid by Medicare or by insurers to conduct more treatment, and these incentives have shaped the practice of health care. A 2008 Dartmouth study had examined Medicare spending across the country and found vast disparities between regions that could not be explained by either the differing needs of their communities or by differing outcomes. The only explanation was that economic incentives, including traditional billing practices, had driven the doctors and hospitals in some communities to prescribe more tests, procedures, and drugs, to no benefit. (Indeed, in many cases, the risks of extraneous procedures outweighed the benefit.) The study concluded that some 30 percent of American medical costs could be eliminated without any harm to patients whatsoever. The trick was cutting out useless or harmful care without eliminating the necessary kind. In 2009, Atul Gawande, a surgeon and health care journalist, described in the New Yorker how McAllen, Texas, spent twice as much per Medicare beneficiary as El Paso, Texas—a city with a similar demographic profile—without yielding any detectable improvement in its residents’ health. Obama and his aides read the story, which hardened their belief that health care reform needed to (in the administration’s shorthand) “bend the curve.” That is, they recognized that health care waste could not be eliminated quickly or easily; instead, they hoped that the graphs depicting health care costs rising well beyond the inflation rate into perpetuity could be gradually altered, bent down to a more sustainable trajectory.
Obama’s health care efforts included a wide array of experiments designed to introduce some rationality into the process of paying for medical care. The stimulus contained $20 billion to encourage doctors and hospitals to convert their record-keeping from the old pen-and-paper files stashed in manila folders to electronic form, in the hope that this would allow better sharing and use of medical data. His health care plan authorized a half-billion dollars a year for a new institute to compare the effectiveness of different kinds of medical treatments, which could help distinguish practices that make people healthy from those that don’t. It created new “Accountable Care Organizations”—doctors who would band together and be paid for keeping their patients healthy, rather than for performing more care. It imposed new financial penalties for hospitals with high rates of patient readmissions. (Under the old system, if a patient acquired an infection in the hospital, they would just go back for more treatment, netting the hospital a second payday.) It capped the tax deduction for the most expensive health insurance plans, giving employers an incentive to shop for more affordable plans for their employees. And it created an Independent Payment Advisory Board, composed of health care experts, whose recommendations for cost savings would automatically take effect if medical inflation rose too quickly, unless overridden by Congress.
Obama did not believe his reforms could solve America’s cost predicament immediately. The plan was to attack the problem from all directions with aggressive and continuous experimentation. Doctors, hospitals, insurers, patients, and the federal government would all be armed with new information and new incentives to seek out the best kinds of medical practice, not just the most expensive.
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Obama’s plan to overhaul health care was certainly radical in its ambitions—not only its attempt to at long last offer all citizens access to basic medical care but to also revolutionize the economics of a gargantuan industry that had sprawled out of control for decades. It was not, however, radical in its methods. The cost reforms had been modeled after the recommendations of bipartisan health care experts, including those of Mark McClellan, a Medicare adviser under the Bush administration. The most important new mechanism for covering the uninsured also had Republican roots: a new, regulated individual market, which prevented insurers from excluding customers with health risks, required those who were uninsured to obtain coverage, and offered tax credits to make doing so affordable.
When Romney ran for president in 2008, he repeatedly held up his plan in Massachusetts as the basis for a national reform proposal. “We have to have our citizens insured,” he declared in a 2007 Republican presidential debate. “What you have to do is what we did in Massachusetts. Is it perfect? No. But we say, let’s rely on personal responsibility, help people buy their own private insurance, get our citizens insured, not with a government takeover, not with new taxes needed, but instead with a free-market based system that gets all of our citizens in the system. No more free rides. It works.” Even the most conservative elements within the Republican Party deemed Romney’s health care a sound basis for a national plan. The influential right-wing talk show host Hugh Hewitt called Romneycare a “brilliant bit of legislating,” touting its individual mandate in particular. National Review, which normally demands ideological purity of Republican candidates, was just slightly less gushing. Its editorial endorsing Romney for president allowed that “not every feature of the health-care plan he enacted in Massachusetts should be replicated nationally,” but insisted he had “more authority than any of the other Republican candidates about this pressing issue.”
And before Obama pursued it, the individual mandate—which Republicans eventually decided was the most extreme and oppressive element of Obamacare—was seen as a decidedly conservative idea. The Heritage Foundation had endorsed it in the 1990s as part of an alternative to the Clinton administration’s ideas. Even Reason, a libertarian magazine, endorsed it in a 2004 article headlined “Mandatory Health Insurance Now!”
“Romneycare” was particularly exceptional given that conservatives have embraced health care policy reforms only insofar as they could be used as alternatives to Democratic plans; their interest in the topic would spike only when Democrats brought the issue to the fore, and most of their energy would go into opposition. Their advocacy of alternative ideas mainly served to discredit any Democratic proposals, rather than serve as the basis for negotiation or a program they would put into effect if given the votes to do so—indeed, once Democrats adopted their ideas, Republicans would promptly abandon them. The Heritage plan in the 1990s formed the basis for a proposal endorsed by Republican Senate leader Bob Dole and most of his party during the Clinton-era health care fight. When Clinton’s plan no longer had a chance of passing, and moderates looked to take up Dole’s idea, he repudiated it.
The pattern continued as Obama took up reform in 2009. Obama advocated that his plan include a “public option”—that is, every exchange would include a government-run plan to compete against those offered by private insurers. The public option had taken on an oversize role in the hopes of liberal activists, who had organized for decades around the goal of a “single-payer” plan, in which the government would replace private insurers, as it does with Medicare. Initially, Republicans likewise made the public option the focal point of their opposition to Obamacare.
Two of the most conservative Republicans in Congress, Oklahoma’s Tom Coburn and Wisconsin’s Paul Ryan, proposed their own alternative health care plan in May, near the outset of the debate. It, too, closely resembled a national version of Romneycare, promising “universal access to affordable health care for all Americans.” Coburn and Ryan proposed to heavily regulate the new insurance exchanges, preventing insurers from “cherry-picking” the healthiest patients and requiring them to cover the same treatments offered by Congress’s own health insurance plan. Even liberal policy analysts applauded their proposal.
Ryan and Coburn framed the public option as the central point of disagreement. “Nothing will rally ordinary Americans against the president’s plan,” they wrote, “more than his allies arguing too forcefully for a system run by politicians and bureaucrats in Washington—what we call the ‘public option’ in the Obama plan.” As the debate bogged down in Congress, Romney wrote an op-ed holding up his Massachusetts-based reform as a national model. “Our citizens purchase private, free-market medical insurance,” he wrote. “There is no ‘public option.’” Eventually, the most moderate Democrats insisted upon discarding the public option from Obama’s bill. One might think its removal would have opened the way for Republicans to embrace Obama’s plan, or negotiate a compromise. Nothing of the sort happened because the Republican health care alternatives served merely to justify Republican opposition to Democratic plans.
By February 2010, Obama’s plan was on the ropes, and he held a summit to find common agreement. There Ryan and Coburn denounced ideas they had endorsed the year before. “You’re defining exactly what kind of health insurance people can have; you’re mandating them to buy this kind of health insurance,” complained Ryan, whose plan had done the very same thing. Coburn urged Obama to forget about expanding coverage altogether and focus instead on promoting healthy eating habits.
In early 2009, Ryan had also promoted a plan to create a government board of fifteen experts charged with “promoting transparency in price, quality, appropriateness, and effectiveness of health care” and given authority to “enforce compliance of health care providers with the guidelines, standards, [and] performance measures.” Ryan’s proposal turned out to be nearly identical to the Independent Payment Advisory Board in Obama’s plan. Indeed, it won praise from health care experts supporting the same idea in Obama’s proposal. Now Ryan predictably decided not only to oppose IPAB but to fixate on it as the most sinister, socialistic device in Obama’s plan—“a panel of fifteen unelected, unaccountable bureaucrats.”
Conservative activists, often incoherent with rage, flooded town hall meetings with members of Congress in their home districts. It was at this point that the Republican Party settled on a belief that Obamacare was not merely misguided but evil, a threat to freedom the magnitude of which could not be found in decades of history. Pennsylvania Republican Rick Santorum even compared those opposing the administration’s proposals to be on par with no less a figure than Nelson Mandela (once demonized by the pro-apartheid conservative right). “He was fighting against some great injustice,” he effused, “and I would make the argument that we have a great injustice going on right now in this country with an ever-increasing size of government that is taking over and controlling people’s lives—and Obamacare is front and center in that.”
In Congress, debate dragged on for months on end, projecting dysfunction and uncertainty. Most of the individual elements of the plan fared well in opinion polls, but hardly anybody knew how the plans would work. A Democratic pollster reported hearing repeatedly from independent voters during the health care debate, “Republicans all hate it, and the Democrats cannot agree what to do, so how good can this proposal be?” The political scientists John Hibbing and Elizabeth Theiss-Morse published a book in 2002 that explained an important dynamic about public opinion during this period. Americans, they found through a deep study of focus groups and survey data, don’t have well-informed or even terribly firm beliefs about policy. They have little conception of ideological divisions between parties, and believe that people in politics should be able to cooperate to accomplish shared goals. Thus, Hibbing and Theiss-Morse wrote, “they are consequently turned off by political debate and deal making that presuppose an absence of consensus. People believe these activities would be unnecessary if decision makers were in tune with the (consensual) public interest rather than cacophonous special interests.” Unsurprisingly, public opinion turned staunchly against Obama’s plan.
At one point in June, David Axelrod, Obama’s chief political adviser, confronted the president with grim polling data. Axelrod later told Jonathan Cohn, who subsequently reconstructed the law’s passage in The New Republic, that Obama replied by bringing up a thirty-six-year-old woman with cancer he’d just met during a trip to Wisconsin. “She’s married, has insurance, and she’s still going broke. She’s absolutely beside herself because she feels like she may not make it and that she’ll leave her family with this huge debt.” Obama urged Axelrod to press on despite the political cost.
During the endless health care summer, many glum Democrats came to doubt that a bill would ever pass (or that, if it did, it would do much good). That original concern for the victims of the cruelties of the American health care system that had animated Obama and his allies was falling out of fashion. Deficit hawks increasingly came to see the goal of covering the uninsured as an unaffordable luxury, even though health care reform was also aiming to reduce the cost of health care to the federal budget. One Washington Post editorial complained that Obama’s coverage proposal would “heap more dessert on an already calorie-laden plate.” Another lectured, “We think that it is not asking too much, given the dire fiscal straits, for Washington to show that it can swallow distasteful medicine while, and not after, it passes out the candy.” (It was telling that a bastion of centrist, and often center-left, thought was analogizing the provision of basic medical care to poor, sick, and desperate Americans as “dessert” and “candy.”) Elite opinion curdled along with popular opinion. Fred Barnes, a conservative reporter, declared shortly after Labor Day, “unless Obama has suddenly transformed public opinion, [then–speaker of the House Nancy] Pelosi and Senate Majority Leader Harry Reid won’t be able to find enough Democrats, even among the usually malleable Blue Dogs, willing to vote for ObamaCare.” Numerous Democrats in Congress and the administration wanted to pull the plug, perhaps stripping down their grand reform ambitions to a small expansion of health care for children.
Still, key Democrats like Max Baucus, who chaired the Senate committee that would sit at the center of the legislative action, believed, reasonably enough, that they could win back public approval if they could persuade at least a few Republicans to join with them. Not all of them understood that, by summertime, the white-hot intensity of conservative fervor made such a defection impossible. A dwindling handful of Republicans was even willing to negotiate, though they could not be pinned down on specific policies that would win their vote. Even when Democrats asked the most open-minded Republican senator, Olympia Snowe, for particular legislative demands that would enable her to support a bill, Snowe simply requested more time. And even her sense of how much more time would be needed remained completely open-ended.
On September 24, 2009, Democrats finally got their 60th supporter, when Massachusetts appointed interim senator Paul Kirk to replace the deceased Ted Kennedy (whose illness rendered him unavailable for all but a handful of votes). In November, the House passed a reform bill. The next month, the 60 Senate Democrats followed suit, breaking the filibuster without a single vote to spare.
Soon that margin was gone: on January 19, Massachusetts held a special election to replace Kennedy, and Republican Scott Brown pulled off a victory in the heavily Democratic state. Brown had based his opposition to Obamacare on the most parochial grounds—since Massachusetts had a good health care plan in its own state, he argued, its residents had no reason to pay more taxes to subsidize coverage for residents of other states. But the political world treated his victory as a kind of referendum on Obamacare to which Democrats across the country were morally bound.
For weeks, nearly the entire political world assumed health care reform was dead. They took as a given that, since the House and Senate bills were not identical, both chambers would apparently have to reengage the issue. “Barack Obama’s two signature initiatives—cap-and-trade and health-care reform—lie in ruins,” gloated Charles Krauthammer. It was not merely the partisan opposition that reached this conclusion. Even hard-core liberals like Massachusetts representative Barney Frank and New York representative Anthony Weiner, both of whom regularly lambasted Obama for his lack of partisan resolve, panicked in the wake of Brown’s victory and urged their party to give up. “If there isn’t any recognition that we got the message and we are trying to recalibrate and do things differently, we are not only going to risk looking ignorant but arrogant,” said Weiner. Frank declared, “our respect for democratic procedures must rule out any effort to pass a health care bill as if the Massachusetts election had not happened.”
Many members of Obama’s administration agreed. One adviser emailed Cohn, sadly, to admit reform was “Dead, DEAD DEAD.” Rahm Emanuel, Obama’s chief of staff, resumed his efforts to negotiate a children’s health care expansion, or any other mini-reform that could be seen as progress, however meager. Mark Penn, the chief political strategist for Hillary Clinton’s 2008 campaign, publicly implored the administration to give up on comprehensive health care reform. Dana Milbank, a moderately liberal Washington Post columnist, argued that Emanuel, a longtime skeptic of the feasibility of passing health care reform, had been proven correct. “Obama’s greatest mistake was failing to listen to Emanuel on health care,” Milbank wrote. “The president disregarded that strategy and sided with Capitol Hill liberals who hoped to ram a larger, less popular bill through Congress with Democratic votes only. The result was, as the world now knows, disastrous.” Milbank’s premise—that health care reform stood no chance of passage—was, by that point, so widely shared that it barely required defending.
But health care reform was not dead. The House and Senate had each passed a bill already. The most common procedure was for the two chambers to negotiate an agreement that would iron out differences between the two bills, and then the House and Senate would vote again on the identical measures. With Brown now in place to provide the 41st vote to block passage, the Senate could no longer pass an amended version. (By this point, Olympia Snowe, who had originally supported the legislation in a committee vote and could have broken a filibuster, had turned irrevocably against it.)
There was another way, though. If the Democratic House simply passed the bill the Senate had passed, it would become law—the only point of a House-Senate conference was to force the two chambers to vote on the same piece of legislation. If the two chambers wanted to negotiate changes, they could do it in a separate budget reconciliation bill. The strange rules of Congress allow that such legislation cannot be filibustered; the only limit is that the bill can only address budgetary issues. Since the points of difference between the House and Senate mostly concerned budgetary aspects of the health care law, reconciliation was the perfect vehicle.
In retrospect, the decision to advance a bill that had already passed both chambers was obvious. At the time, the Washington establishment regarded it as foolhardy. “If we took a vote now, we would not have 51 votes for that approach,” a Senate Democratic aide told the New York Times, when the decision to proceed or quit hung in the balance. “The president would have to do a major sales job.” Former Bush administration aide Yuval Levin gasped, “The apparent decision to push Obamacare through reconciliation gives new meaning to the term political suicide,” adding that it would almost certainly fail. Unlike a great many conservative opinion makers, who confined themselves to generalities, Levin had the ability to immerse himself deep into legislative debates, using the terms that marked true experts in the field. Megan McArdle, a libertarian blogger, called him “an ultrawonk who appears to have had the entire text of the PPACA [The Patient Protection and Affordable Care Act—the official name of the Obamacare legislation] tattooed on the inside of his eyelids for quick reference.” Levin’s deeply argued analyses always landed on the forceful conclusion that the law was a “disaster,” or a “monstrosity,” or a “calamity,” or that “catastrophe is a function of the law’s very design.”
It was this decision to push forward, which Obama took against the advice of many members of his party and even his own administration, that most clearly displayed the role played by his personal qualities in his presidency’s historic success. He showed guts, moral resolve, and the capacity to keep his head while all about him were losing theirs (and blaming it on him). When the House of Representatives passed the Patient Protection and Affordable Care Act on March 22, 2010, and Obama signed it into law the following day, it was the triumph of the vision of generations of activists and intellectuals consummated by the vision of Barack Obama.
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The long and harrowing passage into law of Obamacare, as it came to be known universally, did not end its travails. After conservatives had grown so confident of its demise in the fall of 2009 and again after Scott Brown’s election, its ultimate triumph felt to them not just like a setback but indeed a travesty, even a crime. Mitch McConnell called it the “single worst piece of legislation passed in the last 50 years in the country.” Representative John Fleming of Louisiana has described Obamacare as “the most dangerous piece of legislation ever passed by a Congress” and “the most existential threat to our economy . . . since the Great Depression.” Ken Cuccinelli, the former Virginia attorney general and Republican gubernatorial candidate, compared it to the Fugitive Slave Acts. And having failed in Congress, the crusade to destroy instead mutated into a rearguard guerrilla campaign spilling across the legal, electoral, and even cultural realms.
On July 1, 2012, Paul Ryan made an unusually revealing public comment. He was appearing on This Week, a Sunday morning talk show, opposite Vicki Kennedy, widow of the late Democratic senator. Kennedy extolled the security the new health care law would provide to vulnerable Americans. “These are rights and benefits that the American people embrace and are excited about,” she said. “Families can go to sleep relaxed and happy knowing that their children who have asthma or diabetes or allergies are covered by insurance and aren’t barred because they have a preexisting condition.” Ryan gave a completely honest response. “I think this, at the end of the day, is a big philosophy difference,” he explained. “What Mrs. Kennedy and others were saying is this is a new government-granted right. We disagree with the notion that our rights come from government, that the government can now grant us and define our rights. Those are ours. Those come from nature and God, according to the Declaration of Independence, a huge difference in philosophy.”
Conservative activists and intellectuals express views like this regularly. They believe individuals should be responsible for their own medical needs—or, if they cannot afford it, that they should appeal to private charity. This conviction may be the most striking aspect of the distinct economic libertarianism that sets the Republican Party apart from the major conservative parties in every other developed economy, all of which have broad-consensus acceptance of universal coverage. Yet conservatives grasped from the outset of the debate, as during previous health care reform debates, that opposing the goal of universal insurance put Republicans in an untenable spot. Instead of a frontal attack on Obamacare’s goals, the right instead concentrated its energies on making the case that it would fail to achieve them. It was not enough for conservatives to deny that the costs and benefits of Obamacare amounted to a worthwhile trade-off. Instead they denied that the costs and benefits would look anything like what its supporters, or even neutral authorities such as the Congressional Budget Office, predicted. The law would be a complete fiasco, a train wreck.
“Just as economic shortages were endemic to Soviet central planning,” wrote Weekly Standard editor William Kristol, “the coming Obamacare train wreck is endemic to big-government liberalism.” On the right, the inevitability of Obamacare’s failure was repeated so often it became an axiomatic truth. To deny it was to deny conservatism itself. In 2010, David Frum, a former Bush administration speechwriter turned fellow at the American Enterprise Institute, wrote a column arguing that Republicans in Congress could have enticed Democrats to settle for a smaller, less offensive bill had they been willing to compromise. Frum was not even endorsing Obamacare—but the mere fact that he called into question the party’s totalistic opposition made his view anathema on the right; AEI fired him shortly thereafter. Two years later, a paper published by AEI spelled out the correct line: “The Affordable Care Act (ACA) is too misguided to succeed, too dangerous to maintain, and far too flawed to fix piecemeal.” Its title, “When Obamacare Fails”—“when,” not “if”—deliberately captured the most important premise. The notion that subsequent events might force anyone in the party or its intellectual apparatus to reconsider their opposition to the hated law was unthinkable.
Shortly after its passage, a wide array of conservatives filed suit to block the law’s enactment. The rationale behind the lawsuit held that the individual mandate violated the Constitution, because if the government could require people to purchase health insurance, it could require nearly anything—it could require people to buy broccoli! (Numerous conservative legal scholars invoked the imagined case of a broccoli mandate, and three conservative Supreme Court justices cited it.) As observers like Yale law professor Akhil Amar pointed out, this was a silly basis to oppose a law, since many powers could be stretched to absurd limits. If the government can levy income taxes, it can raise the tax rate to 100 percent; if the government can institute a draft, it can require universal service and lifelong terms. The lawsuit made sense only in the context of the panic about “rampant socialism” that had enveloped the right.
The Supreme Court ultimately rejected the constitutional challenge, but the workings of its decision remain shrouded in mystery. The Court ultimately decided the individual mandate could be upheld as a tax on the uninsured. Most Court observers believe that Chief Justice John Roberts, a conservative appointed by George W. Bush, stood poised to overturn the law, then suddenly changed his mind, fearing a 5–4 vote to strike down such a high-profile law would imperil the Court’s public legitimacy.
While the Court narrowly left Obamacare mostly intact, it tore a chunk out of its structure. The law, as written, threatens states that if they turn down its Medicaid funds to cover the poorest of the uninsured they will lose all their Medicaid funding—related to Obamacare and otherwise. The Court deemed this threat excessive, and instead made it voluntary for states to accept Medicaid expansion. (Two liberal justices agreed to this aspect of the ruling. Most Court observers also believe that they did so in return for Roberts’s vote to leave the rest of the law in place.)
The result left a significant hole in Obamacare’s coverage. Even without the threat of withholding all Medicaid funds from states that didn’t accept the Obamacare expansion, it made no financial sense for any state to turn down the money—the federal government still financed 90 percent of the Medicaid expansion, so states that turned down the funds only saved a mere 10 percent of the cost, in return for which they would have to spend, by most calculations, much more when their uninsured citizens showed up at emergency rooms with serious conditions, or were unable to work due to a physical or mental illness that could have been treated. Turning down the federal government funding ninety cents on the dollar would cost those states billions of dollars.
Still, given the option to turn down funds to cover their poorest uninsured citizens and in the process thumb their nose at Obama, twenty Republican-run states leapt at the opportunity. The decision left those states with an ungainly hybrid the law’s authors never envisioned: the poorest of the poor could still obtain Medicaid, and uninsured citizens in or around the middle class could buy insurance through the exchanges, but struggling adults in between those levels were locked out.
Slowly, some of the initially recalcitrant states, like Iowa, New Hampshire, Pennsylvania, Louisiana, and Arkansas, joined, but the fight to complete the project of universal health insurance for all citizens settled into an extended, state-by-state slog that may take years or even decades to complete.
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When Massachusetts opened its Romneycare health care exchange, the state undertook a massive public outreach campaign to inform citizens of the new insurance options that were available, along with the requirement that they purchase coverage. Even the Boston Red Sox helped get out the word that everybody had to get covered, and affordable plans were available.
Just as it had followed the Massachusetts model in designing its exchanges, the Obama administration hoped to replicate its public outreach. In this case, it hoped to enlist the National Football League in a public service campaign to raise awareness. When Republican leaders sent letters warning the NFL not to collaborate with the hated Obamacare, the league acquiesced. Republicans also targeted “navigators”—consultants who often work for churches, state governments, or charitable organizations, helping poor people fill out often confusing paperwork. House Republicans sent the navigators letters making sweeping demands for documentation that seemed to have the intent of burying them with paperwork. (Sample line: “This request also includes, but is not limited to, any documents provided by [or communications with] representatives from HHS, CMS, CCIIO, Enroll America, or any other entity including federal or state governments discussing individuals to target or solicit for enrollment under the PPACA including discussions or documents related to geographic area.”) Several Republican-controlled states imposed unnecessary licensing requirements on navigators, forcing at least a couple of hospitals to drop out in response. Their sudden love of bureaucracy and Washington red tape had no explanation except a burning desire to gum up the works by any possible means.
Meanwhile, conservative activists financed a guerrilla campaign to persuade the young to boycott the exchanges, in an attempt to skew the age composition of the exchanges and set off the death spiral they hoped for. One group, “Generation Opportunity,” sponsored parties with free pizza and games to lure students to hear pitches about why they’d be better off going uninsured. (Its campaign trademark was a frightening Uncle Sam–esque clown, who appeared in creepy online videos peering into the private parts of terrified patients.) YG Network, a conservative advocacy group founded by former staffers for Eric Cantor, started an anti-Obamacare advertising campaign targeting the young, including a satirical ad on Saturday Night Live. FreedomWorks, an antitax organization that helped finance Tea Party activity, held rallies where supporters could burn their “Obamacare card.” (Such cards did not actually exist, so FreedomWorks had to supply them.) Dean Clancy, the group’s public-policy director, explained, “We’re trying to make it socially acceptable to skip the exchange.”
The war to destroy Obamacare burst through on another front: conservative activists came to believe that they had one final chance to stop the hated law, by shutting down the government. Over the summer, they grew frenzied with the conviction that this strategy represented a chance at salvation for the America they knew and loved, and set out to persuade Republicans in Congress to embrace it. Many powerful figures in the party’s congressional leadership, eager to prove that they shared their supporters’ hellfire passion, agreed. “You want to delay implementation? Don’t fund it,” declared Florida senator Marco Rubio at a Republican Senate breakfast in July. “If Republicans in both houses simply refuse to vote for any continuing resolution that contains further funding for further enforcement of ObamaCare, we can stop it,” insisted Utah senator Mike Lee. A spokesman for Lee announced that the shutdown would constitute “the litmus test of whether you do or do not support ObamaCare.”
This premise was, in fact, completely erroneous. The Affordable Care Act had funded its own implementation already. Shutting down the government halted only government functions that needed continuous authorization to keep their doors open. Eventually Republicans in Congress realized this, but by that point, they had already committed to the strategy. And so, just as the exchanges opened, the Republican-led Congress had staged a futile shutdown of the federal government, the kind of self-destructive gesture usually employed by radical protesters rather than parties that have control of a national legislature. By the time the hullaballoo died down, when Republicans gave up and reopened the government two weeks later, national attention focused on a problem almost nobody had anticipated: the website where people could shop for insurance policies in the new exchanges did not work.
Perfectly playing into Republican arguments about the dangers of turning health insurance over to the federal government, the site, healthcare.gov, turned out to have been shoddily constructed, and launched without what software writers would call a full “beta testing” stage. Confusion spread through the Obama administration for days, and the full horror of what had transpired settled in slowly: the most important domestic reform in decades of American government rested on a single point of failure that lay in the hands of a few overwhelmed techies.
More than two weeks into the debacle, Obama and his key advisers had yet to decide whether the faltering website could be repaired, or whether they needed to build a new one from scratch. In a frantic scramble, Obama appointed Jeffrey Zients, a highly regarded executive turned adviser to his budget office, to recruit software engineers to revive the failed website. As miserable as the effort to build the website was, the campaign to rebuild it was equally impressive. By the beginning of December, after just a month and a half of work—an impressively rapid schedule for such a herculean assignment—the site was functional.
The two-month delay in the website’s operation did little direct damage—customers still had a full month to shop for insurance plans that could not begin coverage until January 1. The indirect damage, on the other hand, proved massive. Just as the administration itself had initially missed the story of the website failure, so, too, had the news media. It corrected its mistake, and then overcorrected. From mid-October through November, the question at hand was not whether the website failure amounted to a gigantic debacle—all sides agreed it did—but whether the Obama administration as a whole had become one as a result. Former Bush adviser Matthew Dowd, asked if Obama had replicated a disaster on the scale of the Bush administration’s botched response to Hurricane Katrina, agreed, “from a political standpoint, it’s eerily similar to President Bush in the fall of 2005.” A portentous front-page New York Times story reported that the controversy “raises questions about his competence in the same way that the Bush administration’s botched response to Hurricane Katrina undermined any semblance of Republican efficiency.” National Journal’s Ron Fournier, a columnist with an uncanny knack for locating himself in the midpoint of national opinion at any given moment, compared the health care rollout to Katrina and Iraq, rolled into one.
The website’s failure gave credence to every Republican attack against Obamacare, of which there were many. A surge of coverage of the new law gave sympathetic coverage to overblown or even false claims that the new law was raising premiums, creating deprivation, and unlikely to ever function as intended. An NPR-sponsored debate, held on January 2014, put forward the question, “Is the Affordable Care Act Beyond Repair?” But as the administration repaired the website and the law itself confounded its skeptics and worked more or less as intended, public attention collapsed. Washington Post reporter Sarah Kliff tracked mentions of Obamacare in major national publications during this period. From October, when healthcare.gov had failed, to December, when it began to work, mentions of the law fell by half. Coverage in January, by which point the law’s collapse was barely plausible, was about a quarter as intense as in December. Lacking media follow-up, the widespread impression of disarray formed during this period of national obsession with the website’s crash and the potential failure of the law proved difficult to dislodge.
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Hard as it may be to believe, many leading conservatives had at one point dismissed the possibility that Obamacare would even fulfill its most important objective of expanding access to health insurance. When some fragmentary evidence during the law’s rollout suggested that a high proportion of new customers on the exchanges already had insurance, conservatives transformed this highly preliminary bit of data—which even then was contradicted by other data—into the conclusion that the new law would yield no reduction in the uninsured rate. House Speaker John Boehner announced in March 2014 that the law had caused “a net loss of people with health insurance.” Boehner was echoing what had become a conservative truism. “What you have basically done is a churn where you’ve knocked people off their old insurance and then gotten them on the exchanges,” insisted National Review editor Rich Lowry, appearing on Meet the Press. Obamacare “created more uninsured people than it gave insurance to. And it promises to create even more,” argued Lowry’s colleague Jonah Goldberg. Krauthammer proclaimed the law would result in “essentially the same number of uninsured.”
A wide array of measures have disproven this. The National Health Interview Survey found that, among Americans aged 18–64—which excludes older people already eligible for Medicare—the uninsured rate dropped from 22.3 percent to 12.8 percent. The Department of Health and Human Services found that some 20 million additional Americans gained access to insurance due to the law. For those inclined to distrust figures coming from the government, Gallup’s survey had found that the percentage of American adults lacking health insurance, which had ranged from 17 to 18 percent of the population in the years before Obamacare’s coverage expansions began, dropped to 11 percent by 2016.
Health insurance is not a product from which customers tend to draw active enjoyment, like a beach vacation or a nice bottle of wine. It’s a product you tend to use only when something has gone wrong. It also carries a certain inherent level of nuisance, like shelling out for premiums and deductibles, or discovering that some doctors and hospitals aren’t covered in your plan. The newly insured now have some of the same hassles that people with insurance have had to cope with.
But, as insurance goes, the exchange plans have turned out to be reliable and affordable, if not a source of joy. A PricewaterhouseCoopers report found, “Across the board, at every level, average exchange premiums are lower than this year’s average premiums for employer-sponsored coverage.” Surprisingly, customers actually liked their exchange plans more than people with employer-sponsored coverage. A 2015 J. D. Power consumer survey found customers on the exchanges reported an average satisfaction rate of 696 out of 1,000, compared with 679 for people with employer coverage.
The first several years of the exchanges proved to be a period of flux. Working Americans who didn’t have coverage through their job were not used to having the chance to purchase affordable health insurance on their own, and insurers were not used to selling it to a mass market. When the exchanges opened, premiums came in 18 percent under the level that the Congressional Budget Office had predicted. That shockingly positive news turned out to reveal a mixed blessing. Insurers had set their rates in many markets too low, and many found they could not compete in the new markets, and had to drop out. Customers on the exchanges needed to shop around every year in order to find affordable plans. Big insurers like Aetna pulled out of the exchanges, reducing options, and insurers in most markets raised their premiums.
The state of the exchanges varies from state to state. While 19 percent of consumers would have just one insurer in their market, according to the Kaiser Family Foundation, more than three-fifths of consumers would still have three or more from which to choose. Even at their higher levels, premiums will be almost exactly what the Congressional Budget Office had forecast when Obamacare passed. For all its birth pangs, the new individual marketplace, unlike the one that had existed before 2014, was functional and giving people the chance to get access to medical care.
Behind these numbers lay a humanitarian revolution, millions of lives transformed, in mostly quiet ways, from fear, pain, and impoverishment to normality. Lisa Gray, a consultant in suburban Washington, D.C., had expensive insurance that did not cover the cost of chemotherapy when she discovered she had leukemia in 2013. Starting in 2014, she could buy an exchange plan with a monthly premium that covered her treatment and had a premium thirty percent less. “A couple years earlier, I think I would have been done,” she told the Los Angeles Times.
Obamacare did not conjure the subsidy that allowed people like Gray to be covered by magic. It transferred resources from the rich (through higher taxes) and the healthy (through higher premiums) to the poor and the sick. The alternatives they faced before, and would have continued to face without Obamacare, would have been to suffer, to go broke, or to die. Dean Angstadt, an uninsured logger in Pennsylvania, decided after regular Fox News watching that he should boycott Obamacare, until his friend prevailed upon him finally to enroll when he needed heart valve surgery to save his life. He may not have liked Barack Obama, but he owed him.
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When cold actuarial logic was applied to the cost of health care, once again Obamacare’s conservative critics were shown to have fundamentally misunderstood how the law could simultaneously expand access to the uninsured and also tamp down long-term medical inflation. It seemed to them like a simple paradox. “You don’t need a PhD to see that the promise to expand coverage and reduce costs is a crude deception,” wrote Krauthammer in 2009, in what was a common talking point on the right. But the designers of Obamacare never planned to reduce the amount the government spent on health care, at least not in the short term. They planned to bring about an immediate increase in spending, by bringing tens of millions of Americans into the system, while slowly holding down the expected increases in the average price everybody pays. The official forecasts projected that the law’s new spending to cover the uninsured would exceed its cuts to Medicare, but that its revenue increases would bring about a net reduction in the deficit. Republicans relentlessly assailed these projections as a scam, numbers on a page manipulated to appear to reduce the deficit. “This legislation was supposed to end that asphyxiating growth [in health care costs]. It will not,” concluded David Brooks. “This bill is full of gimmicks designed to get a good score from the Congressional Budget Office.”
What actually transpired since then surprised everybody. The cost of health care has risen at a much slower pace than anticipated not only by Obamacare’s critics, but also its supporters. In just the first five years since the law’s enactment, the Congressional Budget Office has had to revise down its estimate of its cost five times. From 2014 through 2019, the first five years of Obamacare’s enactment, the American health care system, public and private combined, will have spent some $2.5 trillion less than projected before the law’s enactment. The cost of medical care has come down so fast that the federal government itself is now spending less than it was projected to spend on health care even had Obamacare never existed.
Additionally, in the years since Obamacare’s enactment, the cost of medical care has risen at the slowest rate since before the enactment of Medicare. In the first half decade after the law’s enactment, health care costs rose at a slower pace than general prices for the first time since 1959, when such records started being kept. Not even the wildest Obamacare optimist expected medical inflation to fall so low, so quickly. Nobody can say with any certainty just how much of this economic miracle can be attributed to Obamacare—both the direct impact of its reforms, or its broader signal about the need to make medical care more cost-effective—as opposed to other changes in medicine that may have occurred anyway. But, as we’ll see below, a wide array of evidence shows that the law’s reforms have worked.
Obamacare’s cost reforms started taking effect almost immediately after the law’s passage in 2010, and well before its new coverage took effect at the beginning of 2014. Yuval Levin—he of “catastrophe is a very function of the law’s design” conclusion—believed that Obamacare would begin pushing up health care costs well before the exchanges opened. As early as the spring of 2010, he maintained that “in the interim it is likely to begin wreaking havoc with the health care sector—raising insurance premiums, health care costs, and public anxieties.” It is fair to say that, had health care inflation started to rise after 2010, or even if it had remained at its projected level, Levin would have started making the case that he had been proven right.
Instead, the opposite happened. As the law’s cost reforms took effect, health care inflation began falling. By the beginning of 2013, health experts had begun to debate how much this surprising success had to do with Obamacare. Some, cautious of declaring premature victory, attributed the drop to lingering effects of the recession. Levin embraced that view with gusto. In early 2013, he predicted that health care inflation would soon spike as the economy recovered, mocking supporters of the law who believed health care costs “just magically remain very low” for their “rosy” and “very implausible” faith in the law.
But health care inflation didn’t resume the upward trajectory he predicted. Instead it confounded him by continuing to stay at a historically low level. By the end of 2013, he was formulating a completely new argument: without acknowledging his previous insistence that Obamacare would absolutely cause a spike in health care inflation, or his subsequent belief that the fall in health care inflation would be temporary, he now maintained that the fall in health care costs was inevitable. The “major slowdown in cost inflation began in 2003 . . . began in dramatic fashion five years before the recession.” (And yet, despite this “dramatic” event, he spent years insisting the very opposite would happen.)
Levin, again, was anything but alone. The Wall Street Journal editorial page insisted over and over that Obamacare would increase rather than decrease health care inflation. In March, the editors noted rising costs in Massachusetts—which had expanded coverage but had not undertaken any cost reforms—and called it “merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form.” Later that year, it proclaimed, “Once the health-care markets are put through Mr. Obama’s de facto nationalization, costs will further explode.” (Not may, will.) In October, an editorial warned “no one should entertain the illusion that it will reduce costs,” and predicted “the result is going to be higher costs.”
This is worth calling attention to because the author of those quotes was awarded the 2011 Pulitzer Prize for his series of hysterical denunciations of Obamacare that year. The Pulitzer committee does not award prizes on the basis of ideological agreement, but the Journal’s selection reflected a sense in which the opposition to Obamacare had appeared to carry the day. Activists and intellectuals supporting the law never matched the passion or the certainty mustered by its opponents.
The shocking drop in health care spending transformed the long-term state of the federal budget. But, from a political standpoint, it might as well never have happened, because as far as most Americans knew, it hadn’t. A 2015 national poll asked respondents if they thought Obamacare was spending more than expected, less than expected, or about as much. A mere 5 percent offered the correct response, which is that it has spent less than projected. Just 10 percent more said spending had come in around expectations. Forty-two percent stated the law was spending more than expected, and another 40 percent did not know. Obama has repeatedly touted the law’s twin successes at expanding coverage and holding down costs, but this side of the story never broke through reflexive skepticism about government’s ability to get anything right. (Extremely few Americans watch presidential speeches all the way through, or even the news stories that, at most cover one or two lines from them.) The fashionable, cynical dismissal of the law’s ambitions to bend the curve never dissipated, even in the face of powerful evidence.
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There is a good reason for the pro-Obamacare side’s caution about declaring victory in the quest to bend the curve: they cannot be certain they are right. Economics is a complicated field. Predictions are difficult. Even a policy change that seems to make logical sense is not assured of working. Obamacare’s advocates tended to follow the professional norms of the social sciences, one of which is an appropriate hesitation to reach a strong conclusion without overwhelming evidence. The conservative opponents come from a right-wing tradition that has usually distrusted academia as a bastion of liberal bias. Conservatives have been strangers to doubt, immune to self correction, and able to maintain unwavering opposition to Obamacare. Hardly any equivalent has been found on the left.
And yet the evidence that Obamacare’s reforms have succeeded in bending the curve is strong. There is no proof, because, as with the stimulus, it’s unprovable: we cannot know for certain what would have happened to medical costs absent Obamacare. The evidence can be found not only in the larger trend of surprisingly depressed medical costs, but also in the clear success of many of the law’s experimental initiatives.
The penalties for hospitals with high levels of patient readmissions paid immediate dividends. As soon as Obamacare started docking reimbursements for hospitals whose patients acquired illnesses in them, the rate of hospital-acquired illnesses dropped, by a staggering 17 percent over the first three years alone. The law also put into place financial incentives to penalize hospitals whose patients frequently had to be readmitted for additional care. (Under the old system, if a patient had to come back, it just meant more revenue.) The patient readmission rate dropped from 19 percent to 17.5 percent, which meant some 150,000 patients a year avoided having to go back to the hospital.
Not all the law’s reforms fully took hold. Capping the tax deduction for employer health insurance proved controversial. Conceptually, the idea makes perfect sense. Money your boss spends paying for your health insurance is not taxed, while the money he or she spends on wages is (when you pay income tax). This imbalance creates a bias that encourages employers to compensate their workers with more expensive health insurance rather than higher wages. Health economists on both the right and the left have proposed to even out this imbalance by reducing, or even eliminating, the tax deduction for employer-sponsored insurance. In fact, most conservative proposals to replace Obamacare took the same approach even further. Obamacare’s version became known as the “Cadillac tax”—a tax (or, more accurately, the scaling back of a special tax break) only impacting the most expensive, “Cadillac” plans.
Substantively, the Cadillac tax started working just as designed, prompting a growing number of businesses to shop for more affordable insurance plans to cover their workers. “Companies hoping to avoid the tax,” reported the New York Times in 2013, “are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care.” But the disruption angered workers who had expensive plans, and some of those workers—especially ones who had negotiated for their benefits through a union—demanded change. The Cadillac tax had enemies in both parties, and despite its sterling support among economists, few members of Congress wanted to defend it. In 2015, as part of a budget deal, Congress delayed implementation of the tax. Democratic presidential candidates Bernie Sanders and Hillary Clinton both denounced it, leaving its future viability in serious doubt.
But on the whole, Obamacare has instigated a revolution in the economics of health care that has reverberated. The first few years of the new Accountable Care Organizations—those groups in which doctors banded together to form their own medical group that provides coordinated care, and were paid for keeping their patients healthy rather than by how many services they performed—also showed promise. The experimental ACOs saved $300 per patient per year. And their patients reported levels of satisfaction with their medical care similar to those of patients in traditional insurance plans, and actually had an easier time getting in to see their doctor. And the new exchanges gave consumers an easy way to compare prices.
Obamacare’s reforms have poked and prodded the system from every direction—hospitals, doctors, insurers, and patients—and those pokes and prods all seemed to be having their intended effects. The direct, measurable impact of each individual reform was small. But they sent a cumulative signal to the entire industry that it had to change. And the reforms were proof of concept of the whole theory behind the administration’s plan to bend the curve: massive amounts of waste sloshed through the health care system driven by perverse economic incentives, and correcting those incentives could yield measurable improvement.
In 2015, Atul Gawande returned to McAllen, Texas, ground zero for runaway waste in the health care system when he described it six years earlier. Gawande described how the entire industry was eliminating wasteful and fraudulent treatments—“savings on an unprecedented scale,” as he put it. McAllen was now undergoing a revolution. In the next three years alone, the city’s hospitals were spending $3,000 less annually for every Medicare patient.
The Affordable Care Act will not end the problem of inefficient medical care, just as it will not end the problem of people who can’t afford insurance. Few things in history simply end. But it created an inflection point on a historic scale—the entire American health care system will now be delineated as having a period before Obamacare and a period after. It was a revolution that succeeded after so many attempts before it had failed. Obamacare will be seen as one of the most ambitious and successful social reforms in the history of the United States.
Donald Trump, in keeping with his party’s animating impulses, ran for president calling Obamacare a “disaster.” He promised to replace the law first with “something terrific,” which he frequently assured audiences would take care of every American’s medical needs at much less cost. At one point, forced to describe his plan, he rattled off a handful of off-the-shelf Republican proposals, which would have allowed insurers to cherry-pick the healthiest customers and left people with serious medical needs or low incomes no way to afford decent coverage. It seemed obvious that the candidate lacked even a cursory understanding of how the law worked, what changes he would bring about, or how he could possibly fulfill his promise of fabulous medical care for all.
Once elected, Trump told reporters he wanted to maintain the law’s protections for patients with preexisting conditions. Possibly the incoming president failed to grasp that these safeguards required the other elements in the law in order to function, and was in his mind clumsily walking through the steps Obama (and Romney before him) had taken. Perhaps he was misleading the public about his support, or perhaps he still had no real idea how the law worked and what trade-offs he would need to accept. It was impossible to tell. Either way, he did understand a simple political logic: thanks to Obamacare, millions of Americans now had access to health insurance. Throwing them off their insurance would cause immense political blowback.
Many Republican staffers working on their plans to fulfill the promise to repeal Obamacare quickly arrived at the same conclusion. Republicans had already passed dozens of bills to repeal the law, satisfying their base’s anger. But they did so in the comfortable knowledge that Obama would veto their bills, sparing them any responsibility for the pain, suffering, and death their plan would create. “We’re not going to use that package. We’re not dumb,” one Republican staffer told reporter Caitlin Owens. They hoped instead to tinker with the insurance requirements and age discrimination laws, so that insurers could charge a bit more to older customers and less to young ones, and sell skimpier plans. It would make the law more generous to the healthier, and more costly to the sick, but it would not destroy its central achievements. Republican senator Lamar Alexander, an unrelenting critic of the law, conceded repeal would not eliminate the law's central achievements. Alexander warned against the fantasy that the law could be quickly repealed. “[T]his will take several years to completely make that sort of transition to make sure we do no harm, create a good health care system that everyone has access to and that we repeal the parts of Obamacare that need to be repealed,” he said. And whatever came next, Republicans must “be the rescue party instead of the party that pushes millions of Americans who are hanging by the edge of their fingernails over the cliff.” “The cliff” was the cruel system in place before Obama, and even his enemies were reluctant to return to it.
To be sure, the most rabid of the conservatives would never give up their desire to repeal the law altogether. But the hesitation of the Republican leadership to follow through on its own rhetoric showed just how thoroughly Obama had transformed the politics of the issue. Before his reform, the uninsured could be easily discounted by Congress. Since responsibility for their suffering could not be traced to any specific political figures—the whole system was simply ignoring them—it was not a political problem. Obamacare turned 20 million previously uninsured Americans into beneficiaries of defined programs who could be easily identified if Congress stripped away their coverage. Republicans may not like paying for social programs, but neither do they like angry victims descending on their district offices, or stories in the local news about a mother who died of a treatable illness because her representative in Congress voted to end her health care subsidies.
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In 1947, Harry Truman, in consultation with leading architects, proposed that the White House add a new balcony to its south-facing side. Truman’s idea made aesthetic, functional, and fiscal sense (as it would replace unsightly awnings that required frequent replacement). But Truman’s public standing had sunk at the time, and the idea unleashed “a huge stir of disapproval and ridicule,” as historian David McCullough recounted. The “Truman Balcony,” as his Republican opponents dubbed it, seemed to symbolize his haplessness and arrogance. Over time, the controversial porch would become a cherished part of the building’s grandeur, and its name, originally intended as an epithet, transformed into a tribute to the president who dreamed it up.
Truman’s dream of a federal program to provide universal access to health insurance took longer to come to fruition. When Clinton attempted to fulfill it, Republican critics labeled his plan “Clintoncare” (or “Hillarycare,” after the first lady, who had a strong hand in the project). When Obama took up the goal, Republicans called it “Obamacare.” The fusing of the president’s name and health care created a belittling juxtaposition, conveying the gulf between the grandiosity of the ambition and the president’s smallness—or perceived smallness.
Clinton’s administration resisted the term, and so did Obama’s, but by 2012 the president gave in and conceded that the Patient Protection and Affordable Care Act could bear his name, if its opponents wanted. The term has already lost much of its hostile connotation, and as it embedded itself into the medical economy, it slowly created a constituency on its behalf. Possibly Republicans will come to regret affixing the name of their partisan adversary to a measure that provides every American a guarantee against misfortune. Thus have materialized the fondest hopes that Obama harbored on the evening of March 23, 2010, when he celebrated signing into law his party’s eternal, elusive dream—gathered with his staff on the Truman Balcony.