Krugman: GOP Nightmare Comes True (Obamacare Works)

Last week, the Affordable Care Act (Obamacare) dodged a big bullet in the Supreme Court. Many had thought the court would declare subsidies could not be given through the federal exchange, but only through state insurance exchanges. That could have been disastrous, since nearly half the states did not create a health insurance exchange of their own.

If that had happened, somewhere between 6 and 8.5 million people would have lost their insurance. That's because they would no longer be able to afford it without a subsidy. It would have required Congress to "fix" the law -- and the Republicans, who control both houses of Congress, have shown no ability or desire to do that.

Fortunately, the Supreme Court backed Obamacare and kept the subsidies in place. So, with Obamacare in place for the long-haul now, the question arises -- how is the program working?

Nobel Prize-winning economist Paul Krugman (caricatured above by DonkeyHotey) answers that question in his column in the New York Times. Here's what he had to say:

 The Affordable Care Act is now in its second year of full operation; how’s it doing?

The answer is, better than even many supporters realize.

Start with the act’s most basic purpose, to cover the previously uninsured. Opponents of the law insisted that it would actually reduce coverage; in reality, around 15 million Americans have gained insurance.

But isn’t that a very partial success, with millions still uncovered? Well, many of those still uninsured are in that position because their state governments have refused to let the federal government enroll them in Medicaid.

Beyond that, you need to realize that the law was never intended or expected to cover everyone. Undocumented immigrants aren’t eligible, and any system that doesn’t enroll people automatically will see some of the population fall through the cracks. Massachusetts has had guaranteed health coverage for almost a decade, but 5 percent of its nonelderly adult population remains uninsured.

Suppose we use 5 percent uninsured as a benchmark. How much progress have we made toward getting there? In states that have implemented the act in full and expanded Medicaid, data from the Urban Institute show the uninsured falling from more than 16 percent to just 7.5 percent — that is, in year two we’re already around 80 percent of the way there. Most of the way with the A.C.A.!

But how good is that coverage? Cheaper plans under the law do have relatively large deductibles and impose significant out-of-pocket costs. Still, the plans are vastly better than no coverage at all, or the bare-bones plans that the act made illegal. The newly insured have seen a sharp drop in health-related financial distress, and report a high degree of satisfaction with their coverage.

What about costs? In 2013 there were dire warnings about a looming “rate shock”; instead, premiums came in well below expectations. In 2014 the usual suspects declared that huge premium increases were looming for 2015; the actual rise was just 2 percent. There was another flurry of scare stories about rate hikes earlier this year, but as more information comes in it looks as if premium increases for 2016 will be bigger than for this year but still modest by historical standards — which means that premiums remain much lower than expected.

And there has also been a sharp slowdown in the growth of overall health spending, which is probably due in part to the cost-control measures, largely aimed at Medicare, that were also an important part of health reform.

What about economic side effects? One of the many, many Republican votes against Obamacare involved passing something called the Repealing the Job-Killing Health Care Law Act, and opponents have consistently warned that helping Americans afford health care would lead to economic doom. But there’s no job-killing in the data: The U.S. economy has added more than 240,000 jobs a month on average since Obamacare went into effect, its biggest gains since the 1990s.

Finally, what about claims that health reform would cause the budget deficit to explode? In reality, the deficit has continued to decline, and the Congressional Budget Office recently reaffirmed its conclusionthat repealing Obamacare would increase, not reduce, the deficit.

Put all these things together, and what you have is a portrait of policy triumph — a law that, despite everything its opponents have done to undermine it, is achieving its goals, costing less than expected, and making the lives of millions of Americans better and more secure.

Now, you might wonder why a law that works so well and does so much good is the object of so much political venom — venom that is, by the way, on full display in Justice Antonin Scalia’s dissenting opinion, with its rants against “interpretive jiggery-pokery.” But what conservatives have always feared about health reform is the possibility that it might succeed, and in so doing remind voters that sometimes government action can improve ordinary Americans’ lives.

That’s why the right went all out to destroy the Clinton health plan in 1993, and tried to do the same to the Affordable Care Act. But Obamacare has survived, it’s here, and it’s working. The great conservative nightmare has come true. And it’s a beautiful thing.