Another Election about Obamacare?

May 26th, 2013

Another Obamacare election? Yep. The 2010 election, in which Republicans took control of the House, was based largely on voting against those who supported Obamacare. The 2012 election, was only marginally about Obamacare. First, Mitt Romney was entirely unable to fight back on Obamacare due to imposing RomneyCare in Massachusetts. Second, as for President Obama, he  got what he wanted, so he didn’t say much about the law either, other than to jab Romney for flip-flopping on the mandate. Of course, during the 2008 Democratic Primary against Hillary Clinton, Obama consistently opposed an individual mandate, but he too flip-flopped once he realized that the insurance industry would not support health care reform without a mandat.

Now, arguably, 2014 will be the fourth consecutive election about health care, or so reports the AP:

If Republicans were writing a movie script for next year’s congressional elections, the working title might be “2014: Apocalypse of Obamacare.”

The plot: The rollout of President Barack Obama’s health care law turns into such a disaster that enraged voters rebuke him by rewarding the GOP with undisputed control of Congress.

But there’s a risk for Republicans if they’re wrong and the Affordable Care Act works reasonably well, particularly in states that have embraced it. Republicans might be seen as obstinately standing in the way of progress.

Republicans are already staking out the position that this law wil fail–in no small part to their vigorous opposition:

One of the most prominent doomsayers is Senate Republican leader Mitch McConnell of Kentucky, who predicts “Obamacare” probably will be the biggest issue of 2014 and “an albatross around the neck of every Democrat who voted for it.”

“This thing can’t possibly work,” says McConnell. “It will be a huge disaster in 2014.”

Counting on that, House Republicans are busy framing an election narrative, voting to repeal the health law and trying to link it to the scandal over the Internal Revenue Service’s targeting of tea party groups. It could help excite the conservative base.

I have no doubt that the implementation of Obamacare will be rocky, but the huge disaster won’t happen in 2014 or 2015. It will happen long after Obama is out of office when premiums continue to increase, HHS continues to control costs, and insurers exit the market.

As I discuss in Unprecedented, the Obamacare endgame will look something like this:

As premiums continue to rise—they have already shot up in almost every state—and the mandate penalty remains ineffectively low, going without insurance becomes a much more rational decision, even though people tend to be loss averse. Compound this fact with the harsh reality that more employers are shifting employees from full-time to part-time in order to avoid paying their health care costs, and our society will have large swaths of the young and healthy population—the very people the ACA wanted to place into the insurance pool—paying the penalty rather than buying expensive insurance. This is the exact opposite of what President Obama intended, but is likely to occur after NFIB.

If the ACA continues to result in higher premiums and consequent price controls aimed at controlling these rates nudge insurers to exit the market (insurers are already opting out of California’s exchanges), the mandate may serve as a mere pit stop on the road to single-payer health care (what progressives wanted but did not get in 2009).

It won’t be pretty. So, while political gain can be had in 2014, the true social cost of Obamacare won’t be seen for some time to come. Perhaps the presidential election of 2026 wil be about fixing the morass that Obamacare will have become. As I close in Unprecedented, “Although President Obama is proud that historians will call the Affordable Care Act “Obamacare” and refer to it as his ‘legacy,’ I think we should let history decide its fate.”