The Affordable Care Act is a failed political product.
It’s hard to admit you were wrong. Democrats are going to need some help with that.
What’s too often lost in the Sturm und Drang of recent Republican efforts to reform the insurance reforms enacted by Democrats in 2009 is this: The Affordable Care Act has not worked as advertised. That is the fundamental fact around which the debate should be organized. The ACA did not result in lower premiums but in the opposite; it did not result in more competitive insurance markets but in the opposite; it did not result in superior health-insurance plans but, at least in many cases, the opposite; it has not resulted in universal coverage. Among the major promises made on behalf of the ACA, only one of any significance has been delivered on: It is the case that more Americans have health insurance today than they did in 2009. But the ACA has underdelivered on that point, too: Only about 16.5 million people — barely 5 percent of the population — gained health coverage from the passage of the ACA through 2016, and the vast majority of those, 81 percent, were new Medicaid beneficiaries.
It does not work.
Barack Obama, Nancy Pelosi, and Harry Reid (wherever he is) ought to fess up: They blew it. They got this one wrong. They may have meant well, their hearts may have been in the right place, and they may have given it their best, but they did not achieve their intended outcomes, their heads were . . . somewhere heads don’t belong . . . and their best wasn’t good enough. They were warned, in these pages and elsewhere, but they refused to listen. They should just admit it — doing so would help to clear the way for fixing up what they fouled up.
Instead, they are sticking their fingers in their ears and shouting “La-la-la! Can’t hear you!” as critics point to imploding health-insurance markets and skyrocketing premiums.
Emotionally mature people and highly effective institutions are quick to admit error. The best of them in fact embrace periodic failure as a necessary part of experimentation, learning, and institutional evolution. (Megan McArdle covers this ground brilliantly in The Up Side of Down.) McDonald’s, you may have noticed, rolls out a lot of new products, most of which do not end up staying on the menu. You cannot predict what products will succeed in a brutally competitive marketplace like the one McDonald’s plays in: That information cannot be calculated in advance — it can only be discovered. Discovery, not efficiency, is what competitive markets are really good at — organizing capital is secondary to the real function of free markets, which is organizing knowledge. But you can’t do that discovery work in the boardroom or in a laboratory: You have to go out into the pitiless real world and see what actually happens. Nobody walking the Earth knows as much about consumers’ soft-drink preferences than the beverage geniuses laboring away at the Coca-Cola Company, but they got it wrong big time with New Coke. The ACA was put together in part by some very smart people who have spent their lives studying health care and health insurance. It still stinks. They messed up.
It happens.
There are better and worse ways to fail, and it pays to be conservative when trying out new products, most of which fail, or investing in a new business, most of which fail. Learning to do that well is what makes a wise venture capitalist successful and an innovative executive effective. It’s also why conservatives like federalism, using the states as 50 “laboratories of democracy,” as Louis Brandeis put it. Trying it out in Utah and failing costs less than trying it out coast to coast and failing — and what works in Utah may not work in New Jersey. The more robust and immediate feedback mechanism of local democracy is also why conservatives like subsidiarity, mitigating problems at the lowest effective level of government rather than treating everything as a national question.
Feedback matters. One of the reasons the private sector often is so much more effective than government is that market competition forces firms and entrepreneurs to admit error or suffer dire financial consequences. Capitalism will slap you upside the head if you do something dumb — ask President Trump’s bankruptcy lawyers about that. In the marketplace as in nature, the instrument of evolution is death: Bad products and bad ideas don’t make it, and capital eventually flees bad firms and bad investors. A good company doesn’t punish an executive for trying something new and failing — it punishes him for refusal to admit failure when that failure is obvious and for continuing to shovel precious resources into the bonfire of his vanity.
Capitalism will slap you upside the head if you do something dumb— ask President Trump’s bankruptcy lawyers about that.
Politics should be more like that, but it’s getting less like that. Because our political identities are shaped by tribalism rather than by reason, creating a political culture that embraces healthy experimentation and iterative, incremental reform is difficult for us to do. What we do instead is put together unwieldy bundles of legislation that promise to solve a particular problem for now and for all time — and then accuse the other side of being evil for opposing it. That isn’t government — it’s performance art.
The defects of the ACA are plain for all to see. Everybody knows what they are. But what has been the Democratic response to attempts to fix them? Screeching that Republicans are cruel, that they hate poor people, or that they are influenced by obscure financial motives. What those financial motives might be is not obvious: The biggest financial players in the health-insurance industry, the insurance companies themselves, generally supported ACA and generally opposed recent Republican reform efforts, especially the repeal of the mandate that obliges every American to buy the products the insurance companies sell. And the insurance companies like the Democrats’ current big idea on health-insurance reform: burying the insurance companies in bailout money to cover up the problems created by the ACA.
Whatever else you can say about the politics of health insurance, it remains the fact that the ACA does not work.
This situation sometimes results in amusing developments: When Graham-Cassidy was being debated, progressives circulated a list of industry groups opposed to it — as though deferring to corporate interests were self-evidently good policy from a progressive point of view. It’s part of an argument that, in total, doesn’t make any sense — “Corporate special interests want to stop Republicans from selling the People out to corporate special interests!” — but the argument isn’t about the argument. It’s about pointing to the other side and shouting: “Bad!” If you think about it, Donald Trump hasn’t invented a new kind of politics but has simply stripped our existing political discourse down to its fundamentals.
(Stupid fundamentals.)
But whatever else you can say about the politics of health insurance, it remains the fact that the ACA does not work. Even if it were the case that Republicans are mean, wicked, greedy, and ignorant, the ACA does not work. Sure, President Trump is a buffoon and the Republican congressional leadership has been strikingly unpersuasive — but the ACA does not work. Mitch McConnell could be in the employ of Beelzebub himself and the ACA still does not work. In a house or with a mouse, on a train or in the rain, the ACA does not work. It does not do what its authors promised it would do. And it has failed mostly for the reasons that conservative critics pointed to at the time.
The Affordable Care Act is the New Coke of Democratic domestic-policy initiatives, the McAfrika sandwich (“based on an authentic African recipe”), the Clairol Touch of Yogurt Shampoo. You know what all those products have in common? They’re gone. But the Coca-Cola Company, McDonald’s, and Procter & Gamble still exist. They’re doing okay. They understood their failures, fixed them, and moved on to better and more profitable things. Eventually, we’re going to have to do the same thing when it comes to health insurance, and the sooner the Democrats get on board the less it is going to hurt.
Admitting that you got it wrong is the first step toward getting it right.
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