It's no secret that I dislike Obamacare. There already have been enough promises broken with regards to Obamacare, not to mention that I just think it's poor policy. The implementation of Obamacare has been severely mishandled, and this goes beyond the website glitches. Whether I think the law should be repealed for a superior one is not the question I would like to ask today. Now that the law has been implemented, I have to wonder about its staying power. I didn't think that the Senate and House would be able to merge their versions of the bill into a single bill. With the election of Scott Brown, I didn't think that the bill would get past the Senate. I didn't think that Justice Roberts would be the one to screw over the American health care system by justifying his vote with the Taxation Clause of the Constitution. Yet all of these events occurred and Obamacare remains as the law of the land. As such, I hesitate to make a clad-iron predictions as to what will happen. Nevertheless, I would like to take a look at some indicators and make an educated guess as to whether Obamacare's main components will be "indefinitely delayed" or if Obamacare will simply be a clunky framework for providing health insurance in this country.
Last week, Obamacare officially hit the "milestone" of three million enrollees. As I have already pointed out, five million Americans have already lost their individual health care plans through Obamacare with more on the way. There is also the concern that not enough young adults enrolling into the Obamacare-induced health insurance markets. For Obamacare to work, there needs to be enough young, healthy individuals to subsidize those who are more elderly and more ailing. If more people are not enrolled, insurance companies will suffer losses and be forced to increase premiums, which would very likely result in what is known as an "adverse selection death spiral." Sarah Kliff over at the Washington Post holds more optimism than I do that young adults will enroll before the March 31st deadline of open enrollment. Why I am less optimistic? Projections of enrollees were higher than what has actually taken place. The Obama administration is currently below the projected seven million that were to sign up during open enrollment. This makes sense because if the government is going to provide insurance, it needs to legally define what is and is not insurance. Looking at §1501 of the ACA, it should be no surprise that so many plans have already been cancelled. I am also curious to see the effects that Obamacare will have on employer-based insurance, particularly in terms of whether enough employers will drop employees from their current plans to the point where it will cause a net decrease of insured individuals. However, the employer mandate had been delayed until 2015, which is convenient for those Democrats running for reelection. This does not even factor the ability to keep one's doctor due to the limited options of health care providers that qualify under Obamacare, which the Cato Institute does a good job of outlining in its recent policy analysis (Obamacare: What We Know Now, p. 14-15).
I also have to wonder the effect that Obamacare will have on insurance prices. The Manhattan Institute provides an interactive map of how rates have increased for individual insurance plans. Even so, looking at averages is statistically problematic. I would rather do things like find out the median and distribution of the percent changes, not to mention that much like with income inequality and income mobility, I would rather track individuals than groups. Although there are bound to be winners and losers in health insurance, much like there are in any other policy, if Obamacare is focused on providing more access to more comprehensive health care, I would intuitively expect prices to increase. Not only that, there is the matter of higher deductibles, which is going to make health care less affordable because what good would lower premiums do anybody if the deductibles are higher? In order to compensate, the government will enact price controls, which makes me rightfully skeptical. If the government imposes price controls, that means both the patient and doctor would lose their say in terms of what the optimal treatment would be because the government is trying to force the lowest-cost treatment.
There is also the matter of the impacts on the labor market. Aside from what Obamacare will do to current employer-based insurance plans, there is also the provision that mandates that employers with over fifty full-time employees to cover the insurance for each employee or pay a penalty. Will this either result in less hiring or more part-time workers? According to Mulligan and Gallen (2013) and the Chamber of Commerce, it will. Others are more skeptical of this claim, but even so, let's not forget that much like with the minimum wage debate, there are costs to labor and there will be a certain point in which hiring another worker will not be worthwhile for the employer. I also would be curious to see what impacts the other ACA taxes have on job creation.
The more information that is provided on Obamacare, the more reason I find to dislike it. It is evident that Obamacare is a law that will rob the consumer of health care options while causing prices to spiral, whether that it is in terms of the costs to the federal government, the individual, or the employer. Although there are some outcomes that are evident, there are many questions that remain to be unanswered. Will Obamacare receive have an adequate number of enrollees? Will Obamacare enroll enough young individuals to avoid an adverse selection death spiral? Will the "temporary fixes" used to delay the unpopular parts of Obamacare simply become permanent? Will Obamacare cause a doctor shortage because "more comprehensive care means longer waiting lines," doctors will be fed up with practicing because of the new law, or some other reasoning? Will Obamacare constrain consumer choice so badly that keeping your plan or doctor will only be possible if you can afford to do so? Will the Supreme Court hear a case that will partially or entirely overturn Obamacare? A lot remains unanswered to the point where I have to give the response of "time will tell." At this juncture, I would like to wait about another year to see the extent of the damage that Obamacare has caused to the American health care system.