ObamaCare, One Year In

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I was going to do a health care retrospective post today: looking at the 8 predictions I made a year ago, and seeing how they were panning out.  But when I looked at those predictions, I found that they were really all too short term to say how they were panning out.  The only real new evidence we have comes out of Massachusetts, where RomneyCare is similar in most respects to ObamaCare.  The commonwealth is now being studied by the team that produced the medical bankruptcy studies that were used to support claims like this:

    
"It's personal for millions of families that have gone into bankruptcy under the weight of rising health care costs. Many, many, many, a high number percentage of the bankruptcies in our country are caused by medical bills that people can not pay"
And what they say they've found in Massachusetts is that medical bankruptcies have not fallen by a statistically significant amount since healthcare reform.  Which mostly shows, I think, that theirs is not a very good methodology, and no one should ever have cited them on the topic in the first place.  But since many of us already knew this, I'm not sure that we can really class this as a new development.

So instead I thought it was worth looking at how things have developed--what's better, worse, or the same as what I recall being the broad expectations.

1.  It hasn't gotten more popular  Initially, when people said they expected it to, I thought they were just being strategic--trying to hornswoggle a few fearful waverers.  After all, why would passing an unpopular bill make it more popular?  People didn't really grow much fonder of the Bush I or Clinton tax increases over time, and these are the only two bills I can remember which were actually strongly unpopular with the majority of the public when they passed.

Over time, I changed my mind--people really believed it, basing their arguments around things like Medicare Part D.  I'll reserve the tedious argument about why I don't think they're really comparable and just say that one year out, it hasn't gotten any more popular; in fact, arguably, its popularity has declined slightly.

2.  The vast army of uninsurable people is AWOL.  I thought one of the strongest arguments for the mandate--and the broad outlines of PPACA--was people with pre-existing conditions.  The new high-risk pools were supposed to be a stop-gap for those people until PPACA kicked in.  But so far, just 12,000 have signed up, or about 3% of the expected total.  Either pre-existing conditions just aren't the large problem that advocates claimed, or something has gone disastrously wrong with the implementation of these pools.

3.  The budgeting problems are even worse than I thought  I argued at the time that the spending cuts were not sustainably structured, but I didn't predict just how difficult they would prove to sustain.  Already, Congress is  resorting to ever-more-desperate health care budget gimmicks, like dipping into the health insurance subsidies in future years in order to pay for higher Medicare physician reimbursements.  A month or so after it passed, a healthcare reporter of my acquaintance said that he thought that Congress had pretty much used up every conceivable pay-for in order to pass PPACA, and history is so far proving him right: having exhausted their pay-fors, they've now started cannibalizing ObamaCare itself.  And it's three years to go before we actually set the Rube Goldberg machine into motion.

4. Unintended consequences have started kicking in  As the Official Blog Spouse points out, the administration is granting waivers to virtually anyone who asks, presumably because they think that absent the waivers, people would be losing their insurance.  And not without good reason--thanks to the rules making it illegal to exclude children with pre-existing conditions, insurers have now stopped selling child-only policies in 34 states.  Both the government of Massachusetts and the administration are eagerly exploring the option of simply commanding insurance companies to sell policies at the price they would like to pay, a tactic that doesn't really have a great track record in modern industrial economies.

5.  It turns out maybe it's not so obvious that it's constitutional  At the time of passages, court challenges were dismissed by the bill's supporters as a bunch of fringe quackery--no thinking person could imagine that the Supreme Court could find PPACA unconstitutional.  Now it's not so far-fetched--not the most likely outcome, but a distinct possibility.  And because no one thought it was possible, the act is not well structured to survive a court challenge.  Not only is it missing a severability clause, but the administration's insistence that the mandate wasn't a tax has basically robbed them of a backup strategy--if the court rules that they don't have the authority to do this under the Commerce clause, there doesn't seem to be much hope they can work it in under the taxing power instead.

I wanted to include the upside surprises, but I honestly couldn't think of any.  Suspecting I was biased, I looked to Kathleen Sebelius's recent testimony, which doesn't really offer much in the way of serendipitous success--the things that Democrats say are going okay aren't surprises, and also in many cases, according to the Washington Post, aren't true.

Of course, I imagine that at this point supporters are saying that the best is yet to come--that ObamaCare just hasn't really gotten going yet.  Perhaps so!  But this is the one year report card, and the first-year grades are pretty underwhelming.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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