ACA’s Repeal Failure Shows How Difficult It Is to Roll Back Entitlements

When the Affordable Care Act, known as Obamacare, was rammed through the Congress by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, the carefully crafted narrative was about how the ACA would be one step closer to Europe and Canada’s model of socialized medicine, where anyone who needed medical care could get it, and at an affordable price. No one would be turned away from health care insurance coverage and protections would be built into the new law to reign in the runaway costs of the U.S. health care system. Republicans raged impotently at the mandate built in for mandatory health insurance, at the prospect of limitations in health care arising from over-demand, and at the new taxes used to help pay for it all.

Little noticed in the discussion outside of the few policy wonks who were paying attention were the Congressional Budget Office warnings on the costs of the program. The CBO noted that the ACA was in some form a new entitlement program, like Social Security and Medicare, and the cost of those entitlements were going to cost an unsustainable amount of money—but only after President Obama left office in his anticipated second term. It was a classic case of kicking the can down the road—a blatant tax and spend law that had a built-in entitlement that was going to be really hard to roll back when the piper had to be paid.

Fast forward to 2017, and all the predictions of the CBO have come true. The ACA has become an increasingly costly entitlement for the indigent, the younger taxpayers who are needed to round out the risk pool have chosen to brave the tax penalty for no health coverage, and the public health exchanges are dominated by the highest risk applicants.

Even the soft appeal of the ACA that was originally peddled to the public by the Democrats has shriveled. Health care premiums on the public exchange have risen a shocking 20%-50% a year. The number of insurers willing to participate in the exchanges have dwindled significantly.

Republicans, winning the last presidential election cycle and controlling the Congress and the White House, have tried to follow through on their campaign promises by either repealing Obamacare, or by pulling its teeth in reducing its tax bite and public mandate. The Republican leadership chose the latter rather than the former. Why? Because the former meant removing the entitlement provision of the law that covered the indigent and near-elderly that did not yet qualify for Medicare. But in a dispassionate spate of forecasting, the CBO pointed out that even the chopped-down version of the ACA that the Republican leadership was peddling would result in the loss of health care coverage from several million citizens.

Conservatives rages that they wanted a full repeal of the ACA. Moderates cringed at the impact of the loss of the health care entitlement for many of its voters would have on their re-elections. And Democrats, who were already all-in for the ACA over the past eight years, sat stone faced in resolute objection to any of the Republicans’ legislative maneuvering.

Only the ideologues are going to win this battle. The ACA will be eventually replaced or curtailed to the point that it is more affordable—either through new taxes or through the removal of any meaningful benefits, or both. Health care conglomerates will end up shouldering some of the costs of entitlements and taxpayers will end up with significantly more costly health care coverage.

Unfortunately, the real villain of the health care story in the US isn’t being addressed by the ACA battle at all. That is because the real villain is the commercial health care system itself. An opaque uncompetitive oligopoly, the commercial health care system is a collection of health providers and drug manufacturers that have manipulated the system to their own advantage, swelling its ranks with expensive labor and its budgets with home run-driven drug research. Health care facilities are among the most expensive in the U.S. compared to facilities for other industries, drugs are the most expensive in the entire world, and costs are allowed to swell double digits every year. Patients are not allowed to know the cost of services in advance and are not allowed to price compare between providers. In many cases, patients are not even allowed to know whether the services being provided are even covered by their medical plans until after the fact.

The ACA debate was, and is still, an argument over how the government can get more citizens into the current overly-expensive commercial health care system rather than an argument over how to make the cost of the system more sensible and affordable. It is ironic—the greatest market-driven economy in the world can’t seem to bring to bear its most significant advantage in the one industry that matters the most to its citizens. We all should hope that changes.

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