Much of the current discourse regarding the Affordable Care Act (ACA) has focused on whether the president knowingly lied about certain parts of the law. Others have suggested that his hands-off management style contributed to a lack of knowledge about the law’s details. All of this is meaningless speculation. What should be clear, instead, is that the results of the law were predictable.
The pre-ACA health care system surely had its issues; but the problem with the ACA is that it essentially doubled down on the three chief flaws of the pre-ACA system. Those flaws are:
Mandates: States typically have mandated minimum coverage for health insurance policies. These mandates reduce flexibility for the insurer and for the consumer. An example of this would be a state requiring that all policies cover pre-natal care; certainly men do not need pre-natal care, but neither do some women, particularly older women who are past their child-rearing years. What this does is force insurers to keep sufficient cash on hand, per prudent insurance practices and law, to cover such care, thereby artificially increasing premiums.
In the brief period of time that the so-called exchanges have been open, numerous media reports have recounted instances in which citizens have seen their premiums skyrocket. This is partially the result of mandates, and administration officials have admitted as much. Perhaps the chief rebuttal to the rightist charge that the president’s “if you like your plan, you can keep it” was made in error is that those who have had their plans cancelled had insufficient coverage. Clearly, these plans are insufficient because of government mandates (according to the government), which, in turn, have forced premiums upward.
Diminished Market Forces: The pre-ACA health care system was chiefly paid for by third parties, which hid the true cost of care from consumers. Since a third party—either the insurer or Medicare or Medicaid—paid for most care, there was practically no shopping. This had two effects: First, it encouraged excess demand, which drove prices upward, as patients were more likely to opt for care that might not have been necessary in large part because they were shielded from paying the full price. Second, the lack of shopping meant the absence of competitive forces, which tend to bring prices down.
The ACA also diminishes market forces. Mandates are part of this, too, as consumers are less able to shop for insurance policies tailored to their particular needs. For example, a skinny, healthy man with no family history of diabetes would probably not need to pay premiums for diabetes care—if he is forced to do so through mandates, his premium is higher than it would have been otherwise. The ACA also continues and increases the reliance on health insurance for payment for care (even though in many cases the deductibles are also rising) by focusing the system on health insurance and by lowering limits on health savings accounts.
Price Controls: Much of the cost of health insurance and health care in the pre-ACA era was transferred from the privately-insured to the publicly-insured. Medicare and Medicaid have price controls for care in that the programs will only pay a certain amount in a given year or certain amounts for particular care. In the cases where the cost of such care exceeded Medicare/Medicaid reimbursement rates, that difference was passed on to privately-insured consumers in the form of higher cost for particular care and higher premiums. At this point of the ACA’s very young life, a big chunk of applicants are actually enrolling in Medicaid, which will exacerbate this effect.
The Right has pointed out these features of the system for decades, so the critique was known, the results foreseeable. Whether this constitutes a conscious lie is a matter of debate, probably unknowable, and irrelevant. What is relevant: the early returns on the law, which thus far has been a fiasco.
The ACA is just the latest government policy that takes a niche problem and solves it in general, thereby causing greater harm than good. There are certainly uninsured Americans and the system was surely in dire need of reform; however, the ACA was a decided step in the wrong direction. The system needed more market forces, not fewer. While there is a segment of the population that certainly needs state help, reforms to help the truly needy should have been more targeted and more modest.
An ideal system would be one in which insurance is left for truly expensive and catastrophic care while consumers start off their lives with tax-advantaged health savings accounts so they can save up for care later in life, when most health care is given. This would breathe more competition into the system and help bring down prices in the long-term. After that, public assistance programs could be tailored to those truly in need. Of course, it would be unfair to uproot the entire system and shift to this (arguably) ideal state overnight, but the ACA surely does not move American health care in this direction, at all.
In fact, the ACA is a step—or leap, if you will—toward a “single payer” or state controlled health care system. Moreover, statements from Democratic politicians, including the president, indicate that the ACA is just that, and that the real aim is to someday move the United States to a single payer system. Like any arrangement (even the freest of free markets), the single payer system has its drawbacks, and they look a lot like the drawbacks of the new ACA regime—that is, the absence of market forces, leading to state-dictated rationing as opposed to the economical rationing in a freer market.
To their credit, those on the Left who espouse a single payer system believe it is more just. Even if a proponent of such a system acknowledges the Rightist critique of the ACA (or single payer, for that matter), he or she is likely to place greater emphasis on social justice, making the unintended consequences of mandates, diminished market forces, and price controls of secondary concern, if any concern, at all.
Ultimately, the debate comes down to trade-offs. Generally-speaking, the Right is more willing to accept some of what the Left would describe as unfairness or injustice in favor of a more efficient, cost-effective, and innovative system for the greatest number of people. Meanwhile, the Left would generally be more willing to accept what the Right would deem to be a less-free, less-efficient system in favor of equity.
Politically, the Left won the debate over the past 4 years and clearly moved the country closer to single payer. Of course, the legality of the law has been its proponents’ chief argument fending off Rightist criticisms: Congress passed it, the president signed it, the Court upheld it, and president was reelected—that is, it’s legal, so be quiet. Put another way, the early results and consequences are not what the law’s proponents want to debate. If current trends continue, the political victory of 2009-2012 could very well turn into a political defeat, a reversal of monumental proportions.
So whether the president lied or didn’t know is irrelevant. The Right stands to gain politically with a huge “I told you so.” They have years of warning against mandates and state control, arguing in favor of market forces, as well as sound bites and video clips of the president and political allies talking about eventually enacting a single payer system—that they can’t get their overnight, but some day.