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Year One of the Obamacare Era
A look back, and a look forward


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Avik Roy

One year ago this week — March 23, 2010 — President Obama signed the Patient Protection and Affordable Care Act into law. Joe Biden called it a “big [flipping] deal.” Enthusiasts of the law predicted that Obamacare would reduce the deficit, save hundreds of thousands of lives, significantly improve national life expectancy, dramatically reduce medical bankruptcies, and massively improve infant mortality. I even recall a New Republic editorial arguing that the passage of PPACA would mean no one would ever again have to die of cancer.

Democrats confidently proclaimed that the law would become more popular over time as Americans became more aware of its benefits. In Nancy Pelosi’s felicitous phrase, “We have to pass the bill so that you can find out what is in it.”

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Indeed, over the last twelve months, the law’s unpopularity has remained remarkably consistent, and we’ve only begun to find out what’s in it. The health-care system in Massachusetts upon which Obamacare was modeled has continued to deteriorate. Officials within the Obama administration have regularly pointed out Obamacare’s financial instability. Insurers have exited the market. HHS Secretary Kathleen Sebelius has handed out waivers to labor unions and other favored special interests, and to companies that would have otherwise been forced to drop coverage for their workers, bringing damaging headlines in their wake. The constitutionality of the individual mandate, to which liberals had not given a serious thought, was called into question by two federal judges, one of whom overturned the law in its entirety (the ruling was stayed pending an appeal).

Indeed, there has been so much bad news about Obamacare over the last twelve months, it’s easy to forget how many things have gone wrong. Here is a month-by-month recount.

 
APRIL 2010
In a preview of what’s to come under Obamacare, health-care costs in Massachusetts continued to rise, yet Massachusetts insurance commissioner Joseph Murphy arbitrarily rejected 235 of 274 proposed insurance-rate increases, in a first step towards driving private insurers out of business.

Richard Foster, chief actuary of the Centers for Medicare and Medicaid Services (CMS), released a report showing how Obamacare will increase, not decrease, health costs. The White House announced that it was nominating Donald Berwick, the profit-hating dean of progressive health-policy wonks, to head CMS.

 
MAY 2010
An under-the-radar provision of Obamacare, placing caps on the percent of insurance premiums that could be used for insurers’ administrative expenses — called “medical loss ratio” — threatened to put many insurers out of business. It became clear, quite quickly, that the president’s promise — “if you like your health-care plan, you will be able to keep your health-care plan. Period. No one will take it away, no matter what” — was a lie. A federal report later confirmed this.

A survey by Towers Watson, a human-resources consulting firm, found that 88 percent of employers intended to pass Obamacare’s higher costs on to their workers.

 


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