The Public Policy

Why Obamacare Would Fail

Contrary to what Democrats claim, their health care legislation would only become more unpopular the more people see what's in it.

By 3.19.10

With Democrats hurtling toward a scheduled Sunday vote on national health care legislation, Washington is already starting to speculate on the political ramifications of its passage.

The latest Gallup poll suggests that President Obama’s drive to jam the unpopular bill through Congress is taking its toll. For the first time of his presidency, more people disapprove of Obama’s performance (48 percent) than approve (46 percent).

Despite the polling numbers, the White House publicly insists that once Americans understand what’s in the bill, they’ll come to like it and over time will embrace it just like Social Security and Medicare. Yet the reverse is more likely to be true. Once Americans confront the consequences of this government takeover of the health care system, it will only become more unpopular.

When he set out to overhaul the nation’s health care system, Obama faced a basic problem in selling his proposals: roughly 85 percent of Americans have health insurance and are generally satisfied with their personal care. So as a result, he was forced to make a series of bold claims. He has argued that without his brand of health care legislation, premiums would spiral out of control; health care spending would eat up more than a fifth of our economy; and our entitlement crisis would cripple the federal government. Meanwhile, he’s claimed that his plan would expand coverage while reducing deficits and improving quality of care. And of course, none of these revolutionary changes would interfere in any way with people who like the coverage they have.

If Americans are skeptical now, just wait until they actually had to live under Obamacare.

To start with, Americans would still be facing skyrocketing premiums. There’s been a lot of debate over the Congressional Budget Office report on this matter, with Republicans emphasizing that premiums would be higher in the individual market, and Democrats touting the finding that in the employer-based market, they could be slightly lower. But the important thing to keep in mind is that these estimates are all relative to what people would otherwise be paying if we simply did nothing. So even if you look at the employer-based market, according to the CBO, a family policy would cost roughly $20,100 for the average employee in 2016 under the Senate bill, rather than $20,300 under the status quo. Good luck to any Democrat who attempts to tell those families and businesses struggling to pay $20,100 for insurance coverage that if it weren’t for Obamacare, they’d be paying $200 extra.

While Obama claims that we need to pass his bill to avert spiraling health care costs, the Chief Actuary for the Centers for Medicare Services, which is responsible for tracking this, estimated that if the Senate health care bill passed, spending would actually rise to 20.9 percent of GDP, compared to 20.8 percent under the status quo Obama has rightly deemed “unsustainable.” In other words, a decade from now, Americans would still be reading stories on the devastating effects of health care spending on our economy – a problem that Obamacare was supposed to cure. 

On Thursday, Democrats celebrated the release of a preliminary score from the CBO for their final bill, which was found to reduce the deficit by $138 billion over 10 years. They relied on some of the same accounting gimmicks that they employed in previous estimates as well as some new ones. Democrats delayed most of the major spending provisions until 2014 to make the bill appear cheaper over the CBO’s 10 year budget window; claimed as revenue premiums from a new long-term insurance program, even though that same money is supposed to pay off future benefits; and it siphoned nearly $19.4 billion from an unrelated student loan bill. Yet even if you were to put all of that aside and assume that the deficit reduction is real, it wouldn’t make a dent in the $10 trillion in deficits we’re projected to accumulate over the next decade under Obama’s budget.

Furthermore, everybody knows that the real long-term fiscal challenge is the looming entitlement crisis. Early in the process, the White House declared that health care reform is entitlement reform. And while that’s true in the general sense, the specific bill he supports uses money from Medicare cuts to help finance a new entitlement rather than to deal with the massive unfunded liability of the program.

Those who believed Obama’s promise that if they like their health care plan, they can keep it, would be in for a rude awakening. The version of the bill released on Thursday makes sure that all policies have to meet new federal mandates, thus forcing people with existing insurance to change policies. Some of the incentives it puts in place induce employers to cut coverage while those with privately-administered Medicare Advantage plans would see their benefits affected. And those who are currently uninsured by choice because they are young and healthy would be forced to purchase government-approved insurance policies, or pay a tax penalty to help subsidize insurance for others.

But even those who get to keep insurance they’re happy with will see the quality of medical care and service decline as the system, already at capacity, treats a flood of new patients. While these effects are hard to measure, CMS concluded that "consideration should be given to the potential consequences of a significant increase in demand for health care meeting a relatively fixed supply of health care providers and services." This doesn’t even take into account the much more difficult to measure effect on medical innovation as a result of policies such as the tax on medical device makers.

While it’s true that Social Security and Medicare have remained popular even as the programs threaten to bankrupt the country, they are different from Obamacare because at least conceptually, everybody pays into them and everybody receives benefits. Yet Obamacare would be a welfare program in which one segment of the country receives benefits, while others have their coverage disrupted, and are punished with higher taxes, longer wait times, and poorer quality of care. 

Democrats are deluding themselves into believing that if they pass a bill, people would learn to love it. Yet in time, Americans would learn that the legislation doesn’t fix the problems it was meant to solve, and makes other problems far worse.

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About the Author

Philip Klein is The American Spectator's Washington correspondent. You can follow him on Twitter at: