A Chronic Disease

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A Chronic Disease
Obamacare won’t go away on its own By Ramesh Ponnuru
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Conservatives and Republicans in Washington — activists, strategists, politicians — are increasingly embracing a theory about Obamacare: It’s going to collapse of its own weight, and its failure could yield a sharp right turn in the 2014 and 2016 elections. That theory is probably wrong, and dangerously so. To be rid of Obamacare, Republicans will have to do more than just wait for it to go away — and more than they have done so far.

You can see why the theory has caught on. The early implementation of Obamacare is not going well, with every week bringing fresh news embarrassing to the law’s proponents: Insurers are raising premiums, sometimes dramatically; the administration has had to announce that it will miss statutory deadlines; companies are planning to scale back coverage or even drop it completely. Senator Max Baucus, the Montana Democrat who did as much to shape the law as any other person, said that implementation could be a “train wreck” and then said he would not run for reelection next year. And there are reasons for thinking that the law is too badly conceived ever to work well.

The law takes an inefficient model of health financing — in which insurance is used to prepay routine and predictable medical expenses — and extends it to more people while making it more inefficient still. It assumes, unrealistically and against precedent, that government-backed experts can drive efficiency in health markets. It ignores how people respond to incentives: by performing fewer services when price controls are imposed, for example. These flaws are central rather than incidental to the law. They follow from its misdiagnosis of what ails American health care as, essentially, markets that are too free. Eliminating these flaws would require rewriting the entire law, which is to say replacing it.

President Obama, in a press conference on April 30, conceded that there would be some “bumps” on the road to the law’s destination. He suggested, however, that the only people affected by these bumps would be those who lack insurance now but will have it once the law takes full effect. “For the 85 to 90 percent of Americans who already have health insurance, this thing has already happened. And their only impact is that their insurance is stronger, better, more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else. The implementation issues come in for those who don’t have health insurance.”

Those remarks reflect a disturbing disconnection from reality, one that probably comes from reading too many liberal bloggers. People who have insurance now do indeed have to worry that their premiums will go up, their coverage will be dropped or reduced, and medical innovations that could help them will slow down. And the law will leave many people who lack health insurance without it: The Congressional Budget Office estimates that even after all the law’s taxes, spending, and regulation are implemented, 30 million people in our country will not have health insurance.

Because the law is unlikely to work, because it cannot be meaningfully improved while keeping its basic design, and because it remains unpopular, Republicans would be mad to acquiesce to it. (For a more extended version of this argument, see my article with Yuval Levin, “Repeal, Replace, Still,” in the April 8 issue of NR.) They should not worry that in five or six years almost everyone will see the law as a success. It is likely to be a failure by any reasonable measure.

The reasons for thinking the law will fail are not, however, reasons for thinking it will self-destruct in short order, or harmlessly. Critics have, for example, raised the possibility that the law will cause a “death spiral” in insurance markets. The law allows people to buy insurance without prejudice once they are sick. In one scenario, many people will therefore stop buying health insurance when they are well. The law will make them pay a penalty for going without insurance, but the penalty will be much lower than the insurance premiums they will be avoiding. The fewer healthy people are in the insurance pool, the higher premiums will have to go. And the higher premiums go, the more sense it will make for healthy people to drop their coverage.

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ArticlesAuditing CiceroO tempora! O mores!ByKevin D. WilliamsonHard to FireWhy Lois Lerner may linger.ByJohn FundBrother Cornel in BritainPreaching salvation, hugging strangers, rocking the fans.ByAnthony DanielsFeaturesDefending LincolnIn our hearts, we know he’s right.ByRich LowryUKIP Shakes Up WestminsterNigel Farage has more than stirred the Tories.ByMark SteynA Chronic DiseaseObamacare won’t go away on its own.ByRamesh PonnuruThree Brave LivesEncounters with a Chinese legal activist, a Syrian cartoonist, and a Cuban ‘Lady in White.’ByJay NordlingerSpecial Energy SectionWestern PromisesGaze into the abyss of Cali’s cap-and-trade.ByDaniel FosterFree Markets Mean Cheaper EnergyTrue 60 years ago, and true today.ByRupert DarwallUnited American EmiratesDon’t credit the government for increased oil production.ByPatrick BrennanTo Drill or Not to Drill?Governor Cuomo refuses to answer the question.ByIan TuttleWastedAmerica has squandered its lead in nuclear-energy technology.ByWilliam TuckerBooks, Arts & MannersLeviathan FailJonah Goldberg reviews The End Is Near and It’s Going to Be Awesome: How Going Broke Will Leave America Richer, Happier, and More Secure, by Kevin D. Williamson.Brain TeasesTheodore Dalrymple reviews Brainwashed: The Seductive Appeal of Mindless Neuroscience, by Sally Satel and Scott O. Lilienfeld.The UprisingGalen Mac Caba reviews Strange Rebels: 1979 and the Birth of the 21st Century, by Christian Caryl.A Comeback ConcertJay Nordlinger discusses James Levine, one of the great conductors of our age.To Boldly FlunkRoss Douthat reviews Star Trek: Into Darkness.Country Life:Grasping the ThistleRichard Brookhiser discusses summer weeds.SectionsLetters to the EditorThe WeekAthwart  .  .  .  .  .  .  .  .  James LileksThe Long View  .  .  .  .  .  .  .  .  Rob LongPoetry  .  .  .  .  .  .  .  .  Lawrence DuganHappy Warrior  .  .  .  .  .  .  .  .  Mark Steyn © National Review Online 2013. All Rights Reserved. Home  |   NR / Digital Home  |   Donate  |   Media Kit  |   Site Problems  |   Contact Us  |   Privacy Policy var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); pageTracker = _gat._createTracker("UA-1167326-1"); pageTracker._setDomainName(".nationalreview.com"); pageTracker._initData(); pageTracker._trackPageview(); // tracks clicks with google analytics function trackClick(elm,clickCategory,clickEvent,clickLabel,clickValue) {pageTracker._trackEvent(clickCategory,clickEvent,clickLabel);setTimeout('document.location="'+elm.href+'"',100);} // tracks cartoon clicks function track_cartoon_click(label){var pageview='/cartoon_'+label;var label='Cartoon: '+label;pageTracker._trackPageview(pageview);pageTracker._trackEvent('Homepage Cartoon','View',label);} // tracks poll results clicks function track_poll_results_click(label){var pageview='/poll_result_'+label;var label='Result: '+label;pageTracker._trackPageview(pageview);pageTracker._trackEvent('Poll Results','View',label);} // tracks clicks function track_event_click(action,label,track_page_view,category){if (typeof(category)=="undefined"){var category="Event Click"}if (typeof(track_page_view)=="undefined"){track_page_view=true;var pageview="/"+category+"_"+action+"_"+label}if(track_page_view){pageTracker._trackPageview(pageview)}label=action+": "+label;pageTracker._trackEvent(category,action,label)};

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