The Corner

Obamacare and the Prognosticators

Many conservatives are rightly feeling vindicated by the rolling failures of Obamacare this year. The economic logic of the exchanges is proving untenable in a way that many predicted when the Democrats set the country on this path. And some of the particular problems behind the failures, perhaps especially the way in which the system’s requirement for fairly comprehensive coverage has made insurance less attractive to the consumers it wants most, were evident before this all began. But it’s important to also see what hasn’t turned out as anyone quite expected, especially as it would helpfully moderate expectations about what people on all sides are predicting now. 

The past five years should humble any claims made on behalf of any health-economy models (and such claims never had much of a right to be proud anyway). Such models can be useful and important, and we should work to improve them, but we also have to be aware of their limits, and in policy debates we too rarely are. Not just the various academic and government models have been wrong in key respects. The insurers have seriously mispriced their products over and over too, and you’d have to say at this point that they don’t have a good grasp of how the individual market is working—and that no one else does either. 

As a general matter, I’d say everyone (left and right) overestimated the effect Obamacare would have on the larger health-care system. Its footprint has been much smaller in every key respect than anyone thought. Meanwhile, the left underestimated the challenge of creating a sustainable captured market and the right underestimated the forces keeping overall health costs down, so that liberals thought this would all work much better than it has and conservatives thought it would send general health inflation spiraling upward much more than it has. I certainly made the latter error myself. 

I actually think both of these failed expectations are very much connected to the first: that the footprint of Obamacare has been smaller than expected. It hasn’t shaken up the employer system all that much, for good or bad. It hasn’t changed the underlying health system as champions and critics thought it would. It hasn’t reduced the uninsured as much as expected and (therefore) hasn’t cost as much as expected overall even though per capita costs are higher than projected. The exchanges have drawn far too few healthy people to be stable and the rules that govern them have had too little of an effect on the dynamics of our larger health economy to be fundamentally disruptive. The extremely serious problems we are seeing now are within the one system that Obamacare created from scratch, the exchange system. That system may not survive, and its condition has a lot to teach us about the problems with liberal health economics. But it is a much smaller system than anyone thought it would be at this point, about half the size that CBO projected, so that the effects of any failure it suffers are likely to be more contained than anyone might have expected. The status quo bias in our health system has proved much stronger than the models either side deployed would have implied. 

That point can easily get lost in the criticisms and defenses now understandably flying back and forth. But for anyone thinking about the future of health policy in America, it may prove more important than anything else we have learned. 

Yuval Levin is the director of social, cultural, and constitutional studies at the American Enterprise Institute and the editor of National Affairs.

Most Popular


Kamala Harris Runs for Queen

I’m going to let you in on a secret about the 2020 presidential contest: Unless unforeseen circumstances lead to a true wave election, the legislative stakes will be extremely low. The odds are heavily stacked against Democrats’ retaking the Senate, and that means that even if a Democrat wins the White House, ... Read More
Energy & Environment

The Climate Trap for Democrats

The more the climate debate changes, the more it stays the same. Polls show that the public is worried about climate change, but that doesn’t mean that it is any more ready to bear any burden or pay any price to combat it. If President Donald Trump claws his way to victory again in Pennsylvania and the ... Read More

What We’ve Learned about Jussie Smollett

It’s been a few weeks since March 26, when all charges against Jussie Smollett were dropped and the actor declared that his version of events had been proven correct. How’s that going? Smollett’s celebrity defenders have gone quiet. His publicists and lawyers are dodging reporters. The @StandwithJussie ... Read More
Politics & Policy

But Why Is Guatemala Hungry?

I really, really don’t want to be on the “Nicolas Kristof Wrote Something Dumb” beat, but, Jiminy Cricket! Kristof has taken a trip to Guatemala, with a young woman from Arizona State University in tow. “My annual win-a-trip journey,” he writes. Reporting from Guatemala, he discovers that many ... Read More
White House

Sarah Sanders to Resign at End of June

Sarah Huckabee Sanders will resign from her position as White House press secretary at the end of the month, President Trump announced on Twitter Thursday afternoon. Sanders, the daughter of former Arkansas governor Mike Huckabee, succeeded Sean ... Read More
Politics & Policy

On Painting Air Force One

And so it has come to this. Two oil tankers were just attacked in the Gulf of Oman, presumably by Iran. The United States and China are facing off in a confrontation that is about far more than trade. The southern border remains anarchic and uncontrolled. And Congress is asking: “Can I get the icon in ... Read More