ObamaCare’s Shameful and Lethal Three-year History — and Future


Joseph M. Firestone and Lambert Strether

(Cross-posted from Naked Capitalism. Our thanks To Yves Smith of Naked Capitalism for permission to Cross-post.)

Many people, and especially Obama supporters, characterize the ACA (ObamaCare) as just starting or a work in progress and then go on to urge that the program will have glitches, needs to be tweaked, isn’t yet fully implemented, and so forth. We think it’s a mistake to see the ACA as just starting. We also think it’s a mistake not to weigh the costs of ObamaCare’s stately three-year progress toward partial coverage for the the American people, and just as important to weigh the opportunity costs.

The ACA was passed in March 2010, incorporating many features designed to meet Republican objections to the Bill. Yet, in the end, Democrats never put Medicare for All on the table, abandoned the public option and many other features, and did not get a single Republican vote in either chamber.

The Democrats even saw to it that the bill was fiscally neutral over a 10 year projection at a time when the tanked economy needed more deficit spending and the jobs that would have brought. And to do that, they postponed implementation of most of the bill for more than three years, until now, allowing people to go without care, to die, to divorce, and to lose their homes or go bankrupt due to medical bills, just so they could argue that the bill was fiscally neutral. In gauging the record of the bill, these 3 to 3.5 years of waiting for its implementation and their real costs to the people of the United States must be taken into account.

It also must be taken into account that in the year before the ACA was passed there were some 45 million Americans uninsured, and they were dying at the rate of 1,000 more for every million than in the general population. That is, lack of insurance was causing more than 45,000 fatalities per year. (The cost of those deaths in money terms: $1.38 trillion).

When the ACA was passed it was estimated by its proponents that it would cover 35 million more people than before. Now these same proponents are using the figure 31 million new people covered instead. Meanwhile the population of the United States has grown by 9 million people, and due to the effect of the crash of 2008, millions of people who were insured before the crash are now uninsured. So, though there are no hard figures on this it is likely that estimates of 30 million still uninsured are on the low side. And when we consider that HHS, today, for actuarial reasons, is marketing to the young and healthy, and not the vulnerable and disengaged, it seems quite possible that the 45,000 fatalities per year will not decrease significantly, if at all.

Even if the projection of 31 million new people covered is accurate by say 2017, we will still have as many (assuming further population growth) as 28 million uncovered people then, because the Democrats chose to pass the ACA rather than the Conyers/Kucinich enhanced Medicare for All bill, HR 676. So, 9 years after the effort to pass universal health care started in 2009, we would still have 28,000 fatalities per year to cope with and 28 million going to emergency rooms for care that is too little and often too late (assuming that regulations and laws are not changed to tighten up or eliminate ER access, using the ACA as a pretext).

Furthermore, it’s perfectly possible that the current 31 million new coverage projection is still too optimistic about the future. Many states are still fighting the ACA and will not implement its Medicaid provisions. Some 17 million out of the 31 million new people covered were going to go into the expanded Medicaid program. But with State Governors in Southern and some Western Red States refusing to allow that Medicaid expansion to occur, we may end up with only 9 million new Medicaid enrollees nationwide. Many others will try to game the system because they are willing to accept the risk of mandate violations and fines rather than pay the cost of the lousy insurance offered for basic plans in the ACA.

All in all, that 31 million may well turn into 17 million or so before all this is done. And then we would have taken 9 years of passage, waiting, and implementation and would still have as many as 40 million people uncovered in 2017, and 40,000 annual fatalities.

That is the measure of the possible failure of the ACA.

Is that better than nothing? Sure, but but a fair evaluation also must take into account the opportunity cost of what was done in 2009 to work towards and then pass the ACA in 2010. What if the Democrats had ignored the Republicans in 2009, and used reconciliation, or elimination of the filibuster, and their big majorities in both Houses to try to ram through HR 676?

I think they would have succeeded because Nancy Pelosi had full control of the House, and with elimination of the filibuster and even reconciliation they would have needed only 50 votes + 1 (the VP) in the Senate to have passed that bill in the Spring of 2009, and implemented it by January 2010. Then there would have been no rise of the Tea Party, no sabotaging of the ACA, and full coverage for everyone with no co-pays.

That’s what we’ve lost by not trying to pass HR 676 and by trying instead to take a bipartisan insurance company conciliation approach to passing the ACA. This post, gives the total for the anticipated opportunity cost by comparing Romney’s 2012 alternative to the ACA, the baseline of no reform at all, the ACA, and Medicare for All over the period 2010 – 2022. Bottom line: the ACA is projected to cost 286,500 lives through 2022, assuming no change. That’s a lot better than the baseline and a lot better than Romney’s 2012 alternative. But it’s still terrible compared to what we might have had if we had a President who really represented people rather than Wall Street.

Projected Fatalities Under Varying Health Insurance Scenarios

What if an effort to pass HR 676 had failed in 2009 because too many Democrats in the Senate defected to pass it? Well, I think this would have been very unlikely with the very large Democratic majority and the popularity of the president at its height, but even if it would have failed, then the Democrats could still have compromised with members of their party to pass enhanced Medicare for All for everyone under 26 and over 45, or under 26 and over 50, or whatever compromise would have moved those wayward Democrats up to the 50 vote mark. Such a compromise bill would still have lowered the fatalities substantially by providing insurance for those who needed it most and by enhancing the Medicare program for seniors (full coverage and no co-pays). It would also have been something Democrats could have run on and built upon in each successive election year, rather than having to defend the sorry ACA with its package of inadequate goodies, silly mandate, IRS enforcement, high cost for lousy coverage, and Rube Goldberg eligibility determination. Again there would have been no Tea Party, because Tea Partiers like Medicare, and there would have been no Republican nationwide sweep in 2010, no gerrymandering, no voter suppression, no anti-woman bills, and none of all the rest of the nonsense we’ve seen because the Democrats did what they did.

7 responses to “ObamaCare’s Shameful and Lethal Three-year History — and Future

  1. I fully agree that 2009 – 10 was a missed opportunity. It would be interesting to turn the clock back and see if your rosy predictions came true, but I think the ACA was only part of the spur for the rise of tea-party ism (along with Koch funding). The tea party wing of the Republicans hates Obama for many reasons, including gun control, tax increases on the rich, immigration reform, voter registration, and because he is black. Add in the poor results from the stimulus, home foreclosures, bankruptcies, and the increased deficits, and you have the toxic brew that passes for tea today.

    • I agree that the ACA wasn’t the only thing. But the debate over health care reform bill during the Summer of 2009 was what built that movement. Of course, people were also unhappy with the stimulus and the bankster/Wall Street bonuses and the Government bailouts. But if the Ds and Obama had implemented a second New Deal including Medicare for All, the Kochs and their allies couldn’t have raised the movement.

  2. Yup, from day one I was enraged that there was the rare perfect opportunity (political numbers, public will and the economic crisis which had everyone angry over anything status quo) and the Dems/Obama were so willing to “compromise” with Republicans. From the start they made it clear they would NEVER cooperate, why moderate to try and appease the GOP which was never gunna support it?
    Outside influence had much to do with it as well, I still think it would’ve been possible to pass the public option, without extreme measures, on its own but Lierberman, Reid and Baucus all threw the idea out, and their pockets were fat with insurance company $$$

  3. Best we get this healthcare fiasco over with. My neighbor worked at night driving a forklift in a pharmaceutical warehouse and had a lawn service he ran during the day. By the time his wife died, he had accumulated a $100,000 in hospital bills that the employer provided insurance would not cover, expenses mostly treating nasty infections. With two kids, he lost his house and his lawn business. I don’t have high hopes for the ACA. Insurance companies can fight long and hard when they won’t pay a bill. Before every chemotherapy, the hospital would work the wife over trying to squeeze the money out of a dying woman who was suffering greatly. For some reason, the lawn care business excluded him from any government assistance with his bills. To their credit, the bank tried to work with him, but he was hopelessly upside down, having bought his house at the peak. Medicare for all is the only humane solution.

  4. Matt McOsker

    The sad part is the Democrats could have crafted a bill that even many R’s would have voted for. Just add HSA’s to it, and R’s will go for it – make the program mandatory. And its not about cost anyways its about universal coverage, and an adequate supply in services to provide that health care to people. If it costs more in the short term – who cares. Just pay the bills, and the non-insurance part of the health industry will support it. The latter is just as powerful as the insurance part in lobbying.

  5. I have to disagree that there’d have been no Tea Party; you’re trying to retcon history, but I don’t think it works. The GOP sweep in ’10 wa going to happen regardless, precisely why the Dems tried their hardest to compromise and take the piss out their vinegar. No Dem wanted their name on a Medicare for all bill unless they were in a solidly progressive district, and a Medicare for All would have pissed a lot of people off. The TEA party would still be here; perhaps stronger in 2010 and much, much weaker now, but to pretend there’d have been no opposition to a larger bill is unlikely. It’d have taken time to chip away at the tea party base, and would have raised greater opposition in the mean time.

    • Joe Firestone

      Joe Allen, the secret was to secure the power first, which could have been done by getting rid of the filibuster, and having Reid remove any recalcitrant committee Chairs. Then you start building political credit among the population. How do you do that?

      1: Prevent the abandonment of the mark-to-market rule;

      2: Immediately take the insolvent big banks into resolution so there are no bailouts and they are removed from the political picture;

      3. Once you have their books; investigate, prosecute and indict the control frauds in the big banks, while stopping the foreclosures;

      4. Pass Christine Romer’s recommended stimulus bill, reportedly coming in at $1.8 Trillion (this assumes that there’s no time to get MMT accepted);

      5. Pass a CCR reform bill limiting CC interest to five points above the FFR;

      6. Complete this by the end of March; speed is everything;

      7. Turn to health care; just get behind HR 676 and get Reid and Pelosi to prevent any hearings or committee palaver (HR 676 is an old bill, repeatedly introduced into Congress every two years, so no need to study it); then ram it through and sign it. Do it by the end of April, Obama’s 100 days, and this is key, implement it in 6 months. Get it live by November 1, 2009, and while you’re doing it promote the hell out of it constantly emphasizing how much money people in every state will save and how much coverage they will get for free.

      Results? Yes, there would have been all kinds of people hopping mad at the Administration. But by November, unemployment would have been dropping like a stone and people would start feeling the effects of the enhanced Medicare for All. Also, credit would have been flowing freely because the Government people in control of the banks being resolved could have seen to that.

      By early 2010, high unemployment is over, corruption at the banks is at an end, and health care is accessible to everyone. So, tell me, what would the tea party have to object to? Prosperity, real and free health care accessibility, and the end of Wall Street corruption and domination of the economy? If you think the tea party would have arisen in the midst of that, and the Ds would have lost the election of 2010, then I’ve got a bridge to sell you.