Dr. Gratzer, a physician, is a senior fellow at the Manhattan Institute. Most recently, he is the author of Why Obama’s Government Takeover of Health Care Will Be a Disaster, part of the Encounter Books Broadsides series.
This is the second in an exclusive, five-part series by Dr. Gratzer on why the debate over Obamacare is just beginning, what a Republican strategy should look like over the next two years, and what real health reform in America should consist of.
Part 1 appeared here yesterday. Parts 3 through 5 in Dr. Gratzer’s series will appear here at ConservativeHome next week.
The conventional wisdom last March was that passage of Obamacare would soon yield support, both in and out of Washington. That prediction was premature, as yesterday’s vote to repeal the law in the House of Representatives showed.
The legislation’s future is troubled for three reasons, all of which need to be understood as Republicans craft an alternative.
Unpopularity
Long before the signing ceremony, Obamacare’s popularity sank. It’s never recovered.
Just before the election, the New York Times-CBS poll put repeal leading among likely voters, 47% to 43%. Other polls have yielded similar results. The Real Clear Politics average of all polling shows support for the law at 40.9% – and opposition at 50.6%. Exit polling seems to roughly mirror these results. More importantly, Obamacare hurt where it mattered: in the 92 most-competitive districts that matter for controlling the House, a Wall Street Journal-NBC News poll found that 55% of voters favor the candidate who wants to repeal Obamacare vs. 42% for the pro-Obamacare candidate with opposition most intense among key voting blocks (independents and seniors).
And, moving forward, it seems unlikely that Americans will warm to Patient Protection and Affordable Care Act. After six months, the first of the reforms phased in. While some will be mildly popular with sections of the American people – parents, for instance, will like the raising of the age for eligibility to 26 – many of these changes seem too modest to make much of an impact. The list of preventative services – widely touted by the Administration – includes the promise of free aspirins to Americans at risk for cardiac events. Let’s put that in perspective: the promise will save some elderly Americans a few pennies a day.
With the prospect of cost overruns and bureaucratized health care, the public support is unlikely to shift dramatically. And unpopular legislation is likely to be revised or repealed legislation.
State resistance
Though the Patient Protection and Affordable Care Act envisions a robust role for the federal government – some 159 committees, agencies and grant programs will be created including, ironically, a committee for administrative simplification – much of the actual implementation falls to the states. Indeed, some of the most important aspects of the legislation will depend on decisions made in Albany, Des Moines, Juneau, Montpelier, Salem and the other state capitals, rather than Washington, D.C. On that list: the administration for the expansion of Medicaid and the state-based health insurance exchanges.
As former Senate Majority Leader Tom Daschle noted last year: “I’m concerned about implementation. We’re electing 37 governors in this cycle. Those governors are going to have a lot to say with regard to the enthusiasm and the success of implementation.”
To date, many state governments have been cool to the idea of Obamacare, with more than two dozen involved in some type of legal action. While some of this may be attributed to election year posturing, the reality is that the legislation remains profoundly unpopular in some states. Washington has a fall-back position: if, say, Virginia chooses not to create a health-insurance exchange, Virginians could still potentially enroll in a federal exchange.
Still, by making the reforms state-based (if Washington-directed), the complexity invites delays. It’s one reason that, according to a review by the Congressional Research Service, the Administration failed to meet 7 of 22 legislated requirements by September 23.
And there is a further problem: practicality. At present, the legislation strives to be relatively cost neutral to the states but there still are the added costs of administration. Moving forward, with Medicaid rolls growing, Washington should absorb the costs for years to come. But, still, it could leave states on the hook for – as an example – Medicaid eligible people who never signed up, but would be forced when the individual mandate phases in.
In a few years, the biggest criticism of Obamacare may not be defined by partisanship but geography, as state governments rebel against higher costs – and a full implementation of this legislation.
Budget busting
When he launched his campaign for sweeping health reforms, President Obama put health-care costs at the top of his list of priorities. In a February 2009 budget message, the Administration listed eight principles to guide reform. The first, second and last principles directly addressed health care costs. To make his austerity message stick, President Obama threatened to veto any health bill that did not reduce ten-year projected deficits – a threat he never voiced to protect other stated goals of health reform, like universal coverage.
The final enabling legislation was scored as “saving” $143 billion – but the reconciliation bill included unrelated provisions from the federal student loan program. The Patient Protection and Affordable Care Act’s ‘health-only’ provisions scored just $124 billion in net projected savings by 2019.
If that result seems promising, consider a few of the warnings the CBO added to its estimates throughout the debate:
- Despite projected savings within both ten and twenty-year windows, “those estimates are all subject to substantial uncertainty.” (November 5, 2009 Estimate Letter)
- Reviewing the proposed new Community Living insurance plan, “(t)hese estimated effects of the CLASS proposals are subject to considerable uncertainty...” (November 25, 2009 Estimate Letter)
- Assumptions of longer term deficit benefits after the tenth year “reflect an assumption that the provisions of the reconciliation proposal and H.R. 3590 are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation.” (March 20, 2010 Estimate Letter)
In May 2010, the CBO reported that an additional $115 billion would be needed to implement the bill.
Roughly half of the plan’s costs are funded with new taxes or other revenue measures. Almost three-quarters of the final $455 billion in Medicare savings targets were to come from crude – and easily reversed – cuts to Medicare fee-for-service payments. Here, then, is the bottom line: it’s unlikely that, even in the optimistic scenarios used by the CBO, this legislation would come in as a deficit reducer. And the history of big health-care legislation is to come in over budget. In 1965, for example, the House Ways and Means Committee estimated that the hospital insurance portion of the Medicare, would cost about $9 billion annually by 1990; actual spending that year was $67 billion.
Thus, at a time of record deficits, with the public increasingly edgy about cost overruns, full implementation would likely require massive new spending. That’s not likely to happen – regardless of who controls Congress beyond 2012.
At least the aythor is honest about how unpop
ular this lousy monster of a bill is, and the costs and not to mention mandates, committees to tell me IF I can have a test and if so WHEN. Obama is a one man disaster:a wrecking ball!!!I remember sayin from the start of his REIGN that everyday there's something else throw at the American
people. May this horror of a bill and Obama both be repealed, and both replaced!!!
Posted by: joanne | 01/22/2011 at 06:36 PM
I speak to you as a Mayo Clinic patient, knowledgable about their philosophy of delivering LOW VOLUME-HIGH VALUE patient care. I suspect you are voicing your opposition to the Affordable Care Act, because it would force you into delivering efficent care, not expensive care. The beauty of the Affordable Care Act, is to take physicians that choose to practice high volume care (that is requiring lots of testing and high cost) to task and deliver the kind of proven efficent care that Mayo or Cleveland Clinic practice. Stop sucking our country with your high cost health care delivery. It can be done. Insurance companies and rich doctors continue to try to derail reform.
Posted by: betty iberg | 01/23/2011 at 12:00 AM
Betty: you're completely wrong if you think this "healthcare" bill is about health or care. It's about power and creating a dependency class that will ideally keep clawing away at crumbs provided by the preferred party: democrats. See what the " war on poverty" has done? All such schemes require useful idiots as proponents, now don't they?
Posted by: Hawk777 | 01/23/2011 at 07:23 AM