Obamacare Didn’t Fail Because It’s Timid

Let's stop for a moment and ponder that. It's common to hear Democratic pundits lament that centrist senators like Ben Nelson and Joe Lieberman held the bill hostage, forcing it to be underpowered to the task and leading to the failures of today. But if Massachusetts balked at signing up for this, then the problem wasn't just with a few squishy moderates. Had Democrats pushed for a $2 trillion bill with a much larger mandate, as Drum wishes, the issue wouldn't have been a handful of DINO senators — it would have been the folks from deep-blue states fleeing for cover ahead of a mob of angry constituents.

As it was, thanks to the inconvenient arrival of Republican Scott Brown to replace Ted Kennedy, Democrats were forced to use a parliamentary maneuver called reconciliation to pass major parts of the program. Reconciliation bills cannot increase the deficit outside of the 10-year forecast window, so even if Democrats had been willing to hold hands and commit an even more gruesome form of collective political suicide than the one they chose, they could not have done what Kevin describes.

So there we are: This counterfactual history could not have happened, which is why it didn't. But it's particularly worth discussing why the bill was so unpopular. There was a pundit parlor game around the time of passage, and for a few years after, where liberal pundits would look at how individual components of the law polled, and report that Obamacare was secretly popular because its provisions polled well except for two little items — the funding mechanisms, and the mandate. This is, of course, exactly backwards. Those polls weren't telling Democrats that people actually liked Obamacare; they were telling Democrats that people hated the taxes and the mandate so much that it outweighed everything they liked about the bill. Had the taxes and the mandate been higher, that hatred would have been more intense.

Of course, this is all water under the bridge, so why rehash it now? Because we are still living with the choices Democrats made — and the constraints that bound them will bind Republicans even more strongly as they attempt to fix the bloody thing.

Democrats at least got to package the bits people hated with goodies, like prohibiting insurers from looking at pre-existing conditions when selling insurance. For Republicans to fix the system as it stands, they would have to jack up the parts people hate — not to deliver new benefits, but mostly just to keep the existing system from flaming into a tailspin. Only the price tag would now be much higher, for boring technical reasons I'll leave in a footnote. ² The odds of this happening seem … slight.

Yet repeal and replace now seems almost as unlikely, because it means taking something away from voters — stuff that polls really well, such as, er, prohibiting insurers from looking at pre-existing conditions. Of course, the last option — doing nothing while the individual market flames into a tailspin — doesn't look all that hot, either.

If I were a Republican in congress, option three is probably what I'd choose. I'd announce a blue-ribbon commission designed to study the matter and propose a comprehensive alternative. I'd give it plenty of time to study and make recommendations. Then I'd wait and see if 2017 brings more premium hikes and insurers pulling out of smaller counties — disasters that could then be blamed on Obama, in much the way that Democrats successfully blamed the financial crisis on Bush, even years after he'd left office.

Is this the courageous thing to do? No. Is it the right policy move? Also no. But that's the point of today's history lesson: When it comes to policy, political math trumps both technocratic merit and courage every time.

¹ For those who are curious: the CBO scores the 10-year cost of a bill. The CLASS Act cleverly had a long vesting period in which people paid premiums but got no benefits. Later, the thing degenerated into a sucking chest wound in the federal budget, because its funding was not sustainable. But that occurred outside the CBO budget window, and was therefore invisible in the bill's score.

The 1099 provision was even sillier. Even at the time, no one could possibly have thought that Congress was going to enforce a provision requiring ordinary people, who generally do not have accounting departments, to issue a 1099 to any vendor they paid significant amounts of cash. But the CBO is not in the business of saying "That's absurd, and you're obviously never intending to actually do this"; for very good reasons, they have to score the bill as it is written, not as they think it's likely to look after you've had to fix all the silly things you wrote.

² Basically: As mentioned above, the CBO scores the 10-year cost of a bill. Obamacare didn't take effect for nearly four years, which cut the actual 10-year cost – i.e., 10 years' worth of program operation — by quite a lot. A Republican bill along the lines that Kevin outlined, which would only involve changing the amounts required for existing provisions, would presumably go into effect much sooner than that, and therefore have a CBO score closer to its actual cost over a decade of paying out subsidies.