7 Charts that validate the ACA

Source: New Republic

Author: Jonathon Cohn

Emphasis Mine

Obamacare is not popular. In the latest tracking poll from the Kaiser Family Foundation, 47 percent of respondents said they have an unfavorable opinion of the law, while just 35 percent said they view it favorably. The numbers haven’t changed that much over time and they’re pretty similar to what other surveys have found. The polls are a little deceiving: People don’t want to repeal the Affordable Care Act and, by and large, they like the component pieces. But the overall public reaction has been something less than enthusiastic.

One reason is that the program got off to such a dreadful start. It was exactly a year ago this Wednesday, on October 1, that the Administration launched healthcare.govand then watched, helplessly, as it failed. It would take officials nearly two months before they got the site working. The same was true in many states. During this time, insurers were cancelling expiring policies that didn’t comply with the Affordable Care Act’s new standards, forcing somewhere between a few hundred thousand and a few million Americans to search for new coverage. The law’s political opponents seized on the stories of disruption, real and imagined, to argue that the law was a debacle.

Today they make the same argument. In the right-wing press, and among Republican politicians, Obamacare hasn’t simply failed. It’s been a catastrophe. Senator Ted Cruz regularly calls it “the disaster that is Obamacare” Wall Street Journal editorial writer Holman Jenkins, Jr., compares it to the crisis in the Ukraine. The New York Post editorial page just gave the law an “F.” Its logic: “About the best thing that can be said about ObamaCare’s first year is that it wasn’t quite as bad as some critics predicted. But it isn’t even close to what we were promised and nowhere near a passing grade.”

The data tell a different story. The Affordable Care Act has real flaws and shortcomings, and pretty much any week you can find a new story about one of them. On Monday, for example, the New York Times had an article about people discovering they owe large medical bills because, during an emergency, they received care from a physician who wasn’t part of their insurance network. The next open enrollment period begins in just a few weeks and, already, advocates are bracing for new glitches. But if you focus on the big picture, the available evidence suggests that the Affordable Care Act is working pretty much as its designers envisioned it would.

Critics can legitimately take issue with the law’s goals and principles. That’s a matter of philosophical preference, after all. Performance is another matter.


1. More people have health insurance.

Percentage uninsured, via Gallup

Everybody knows that covering large numbers of the uninsured was Obamacare’s primary goal. And, for a while, it looked as if the law might not accomplish that. We now have overwhelming evidence that it has. The most complete data comes from a series of surveys from independent research organizationsthe Commonwealth Fund, Gallup, the Rand Corporation, and the Urban Institute. Their numbers do not match up precisely, but all of them have found that, as a result of the law’s coverage expansion, the number of people without insurance fell by something like 10 to 12 million, once you add in the young adult who got coverage because of the law’s under-26 provision. Meanwhile, hospitals are reporting that they are seeing fewer and fewer uninsured patients.

Those findings are not definitive and it may yet turn out that the actual reduction in coverage was higher or lower than those surveys found. The available government data, though broadly consistent with these findings, is not yet current enough to capture the 2014 expansion. But it’s impossible to argue, seriously, that the law has not meant many more people have insurance. The only question is how many and what happens in the years to come.

2. People who are getting health insurance are almost certainly better off.

It seems intuitive that people who have insurance are better off than those without. But every now and then people question it. Two recent studies should put those doubts mostly to rest. The first was a major study of Medicaid, based on data from Oregon. The authors determined that people who get health insurance from the program were significantly less likely to experience financial distress and significantly more likely to report better mental health. The one unknown from that study was whether people who get Medicaid also ended up healthier. The researchers coudn’t come up with evidence to substantiate that claim.

Health outcomes, Massachusetts v neighboring states

Source: Annals of Internal Medicine

The results set off a furious debate over how much good health insurance, or at least Medicaid, did. A subsequent study, using data from Massachusetts and its expansion of health insurance, went a long way towards settling the question. The study found improvements not just in economic security and mental health, as the Oregon study did, but also in physical health. People were less likely to have severe health problems and were more likely to avoid premature death. In fact, researchers calculated, for every 846 people who got insurance, one person was likely to live longer.

That kind of evidence of the Affordable Care Act’s impact won’t be available for a long time. But a survey from the Commonwealth Fund found that 60 percent of people who got new coverage on the marketplaces had used their insurance to pay for servicesand 62 percent of that group said they could not have paid for such care previously. It’s one more sign that people are better off.

3. “Winners” probably outnumbered “losers” in the new marketplaces.

The most disruptive part of Obamacare’s launch wasn’t the website. It was the plan cancellations and “rate shock,” as insurers raised premiums in order to provide more comprehensive benefits and coverage that was available even to people with pre-existing conditions. This was a surprise to many people, not least because Obama had vowed that people who liked their insurance could keep it. And it led to a flood of stories about how the law was actually making people pay more for their coverage.

But the law also provides tax credits, which offset part or all of the increase for most people, and it actually reduces the price of coverage for people who once higher rates because they were relatively old or in poor health. As a result, many people paid less for their insurance in 2014 than they had in 2013.

Obamacare plan switchers, via KFF

It’s been difficult to assess how this shift affected different people and, truth is, we may never know for sure how many people were “winners” and how many were “losers” in this transition from the old to new system. Affordable Care Act critics like Avik Roy and Yevgeniy Feyman, of the Manhattan Institute, have insisted the net change was for the worst. But most of the experts I know and trust disagree.

Some of the best evidence I’ve seen comes from a survey, by the Kaiser Foundation, of people who had previously bought their own, individual insurance policies and had to switch plans because those old plans were not compliant with Obamacare regulations. Of those people, 46 percent of respondents said they ended up paying less, while just 39 percent said they were paying more and 15 percent said they were paying the same. Throw in the fact that most of these people were also getting more comprehensive benefitsand that the survey didn’t even include people who, because of their low incomes, were able to qualify for Medicaidit seems very likely that there were more winners than losers.

Oh, and don’t forget that, in Commonwealth Fund surveys, 68 percent of the people buying marketplace plans rated them as either “good,” “very good,” or “excellent.”

4. Premiums in the marketplaces aren’t rising quickly, and more insurers are jumping in to compete.

Once the websites were working and enrollment in the new marketplaces increased dramatically, some of the law’s critics fell back on a different argument: Only older and sicker people were signing up for coverage. Carriers would jack up premiums or abandon the marketplaces altogether. Both predictions have proven spectacularly untrue.

KFF premiums


Multiple studies have shown that, between 2013 and 2014, premiums inside the marketplaces are barely rising. There’s a lot of variation, even within states, and in order to save money some consumers will have to switch plans. (Hence, the aforementioned issues with reenrollment.) But in some places the price of the benchmark silver plan is actually declining, something that Larry Levitt, senior vice president at Kaiser, has likened to “defying the law of physics.” It just doesn’t happen.

As for competition, HHS has announced that overall participation in the marketplaces will increase next year, by 15 percent overall, based on information from 44 states who have made the data available. Virtually every state will have more insurers. The only state that’s reporting a slight decline is California, which already has a multitude.

5. Employer premiums also aren’t rising quickly.

Employer premiums, via KFF/HRET survey

With all of the attention on the marketplaces, it’s easy to forget that the vast majority of people don’t use them. Most working-age Americans get health insurance through their employers. The law’s critics had predicted Obamacare would disrupt their coverage, too, by causing premiums to skyrocket. Once again, that prediction turned out to be dead wrong. According to the Kaiser/HRET Survey of Employer-Sponsored Health Benefits, this year employer premiums rose by just 3 percent, which is barely above worker wages and inflation. Coverage is still expensive ($16,800 for a family policy) and employers have held down costs, in part, by asking employees to pay more in out-of-pocket costs. But the inflation critics confidently predicted simply has not materialized.

6. Overall health care costs are rising at historically low rates.

When people talk about the “cost” of health care, they frequently mean different things. Economists mostly care about national health expenditureswhat the U.S., as a nation, spends on medical care through private and public insurance, as well as through individual out-of-pocket expenses. It rises pretty much every year. But for the last years, it’s been rising very slowly. The latest ten year projections, from the Center for Medicare and Medicaid Services, suggest that trend is likely to continue.

Several factors seem to be at play, including the recession. For that reason, it’s likely that spending will start to accelerate a bit as the economy recovers. But most experts now think the “new normal” is lower inflation, because the health care industry is becoming more efficientat least partly in reaction to new incentives that the Affordable Care Act introduced.

One sign that those incentives is working is a dramatic decline in the number of hospital readmissions. The decline began just as hospitals started facing new financial penalties, enacted as part of Obamacare, for high readmission rates. Whatever the cause, it’s clear that health care spending isn’t accelerating rapidly, as critics predicted would happen once Obamacare became law.

7. The net effect on the budget has been to reduce the deficit.

Say what you will about Obamacare’s architects, but they took their fiscal responsibilities seriously. The law calls for new spending, since the government now has to underwrite the costs of both an expanded Medicaid program and all those subsidies for people buying health insurance. But for every dollar in new spending, there is at least one dollar in either new revenue or new spending cuts. The net effect, according to the Congressional Budget Office, is to reduce the deficit.

Federal health spending

And the more information we get, the more it seems that the CBO underestimated the savings. According to the Committee for a Responsible Federal Budget, the total bill for federal health care programs in the near future is likely to be lower than experts had predicted when Obamacare first became law. Some of that reflects factors unrelated to the Affordable Care Act. It’s still a remarkable feat.

Update: I’ve rewritten the final passage to clarify what the CFRB report shows. (My original phrasing suggested total health care spending in 2020 would be lower than it was in 2010, which isn’t the case.) Thanks to Patrick Brennan for pointing that out.


This Deficit Story Can’t Be Repeated Often Enough!

it was the plan to force the country into debt, and then they would demand that we cut the things that government does for the 99%, in order to further enrich the 1%. They would scare everyone by saying that the debt will destroy us so we have to cut back. That was the plan. They said that was the plan. And now that the plan is being executed, we should understand that it was the plan and not fall for it!


By: Dave Johnson, at the Campaign for America’s Future, sends us this.

“Atrios says it: Eschaton: Planning For 10 Years From Now.

The last time an administration did the supposedly responsible thing, the fiscal ‘hawks’ suddenly decided that the worst possible thing was no longer a deficit, but a surplus, and that therefore it was necessary to have massive tax cuts for rich people.

And they will, of course, do it again.

Any time any D.C. elite complains about “the deficit” remind them that when Clinton left office we had a huge surplus, so big that at the rate it was being paid down the entire U.S. debt was going to be paid off in 10 years. Bush demanded that we give back the people’s money and Greenspan warned of the danger of paying off the debt. Etc. Etc. Etc. Then Bush doubled military spending—and started two wars on top of that!

So we went from big surplus to huge, huge deficits. Bush said it was “incredibly positive news” when we went back into deficit spending. He said it was good news because it continued the plan to use debt to force the government to cut back. He said that. It was the plan. (Don’t take my word for it, click the links.)

The Reagan people said it, too, back when they started the massive deficit spending. It was the plan: force the country into massive debt, “starve the beast” and use that to force the government out of business, or at least to be “small enough to drown in a bathtub.” They forced the tax cuts and Reagan said this was “cutting the government’s allowance.” The point was to use revenue cutbacks to force government to shrink,to get out of the way of the 1%.

Now that government is very much out of the way of the 1%, we are seeing how things work out when the 1% dominate everything.

They called it “strategic deficits.” They said it was the plan to force the country into debt, and then they would demand that we cut the things that government does for the 99%, in order to further enrich the 1%. They would scare everyone by saying that the debt will destroy us so we have to cut back. That was the plan. They said that was the plan. And now that the plan is being executed, we should understand that it was the plan and not fall for it!

They said it was the plan. So as the plan unfolds, don’t be so surprised.”

Emphasis Mine.


Addressing our Revenue Crises

Democrats are right that this is a terrible moment for spending cuts

By   from the Washington Post

There is no good reason for negotiations on the budget and the debt ceiling to be deadlocked, because the solution is obvious: First, do no harm.

The Hippocratic injunction should be something befuddled economists and warring politicians can agree on. With the nation struggling to recover from a devastating recession, unemployment stuck at crisis levels, financial markets spooked by the possibility of European defaults and consumers disinclined to consume, it makes no earthly sense to suck money out of the economy.

Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road — but in a purposeful, intelligent way.

As a practical matter, this means Republicans must swallow an increase in the debt ceiling, and Democrats must accept painful spending curbs that kick in when the economy is off its sickbed. It means conservatives have to be patient in bringing expenditures down and progressives have to be patient in returning tax rates — even for the wealthy — to what many of us consider appropriate levels.

All this is clear — even as much else about the economy and its prognosis becomes increasingly murky.

Indeed, it is reasonable to ask whether the “dismal science” of economics even works anymore as a reliable tool for analysis and prediction. While some economists remain staunch, unwavering disciples of John Maynard Keynes or Milton Friedman, others have begun couching their words. It’s almost as if the laws governing the universe of money have changed.

Two years ago at a seminar, I heard a distinguished economic forecaster confidently explain how the recovery would proceed. While some usually reliable indicators were anomalous and contradictory, he said, the one thing he knew from the historical record was that sharp, deep recessions are followed by steep, roaring recoveries. By the second quarter of 2010, he said, growth would be as high as 4 percent and unemployment would be tumbling. Happy days would be here again.

I won’t embarrass the man by naming him, since he wasn’t much farther off base than many of his peers. No economic orthodoxy has come through the past few years unscathed.

At least former Federal Reserve Chairman Alan Greenspan — once a firm, unquestioning believer in deregulation — had the honesty to admit that the 2008 financial meltdown exposed a “flaw” in his ideology and left him “in a state of shocked disbelief.” That’s where the whole economics profession should be.

But even if economists don’t know where the nation and the world are heading, there’s plenty of data to tell us where we are right now. Unemployment was at 9.1 percent in May, up from 9 percent in April. Housing starts were up slightly after having declined sharply the previous month. Retail sales were down a fraction after being up a fraction. Taking a longer view, the economy has clearly improved over the past year — but the improvement is slow, wobbly and fragile.

Given this state of affairs, it’s hard to imagine how taking money out of consumers’ hands — either through cuts in government spending or tax increases — could possibly make things better. It’s easy to see how such measures could make things worse.

Likewise, it’s hard to believe that running trillion-dollar deficits every year is sound policy. Economists who confidently tell us that it’s no problem that the national debt is approaching 100 percent of gross domestic product sound as if they’re whistling past the graveyard. I believe it would be a long, long time before the financial markets began to see the United States as a great big Greece, but at some point that day would come.

And how could Congress turn a long-range crisis into an immediate disaster? By stubbornly refusing to raise the debt ceiling, which would be the economic equivalent of a toddler’s temper tantrum.

It’s clear what needs to be done. President Obama and congressional leaders should agree on a series of firm deficit caps that would reduce the debt over time. This must be accompanied by a reasonable increase in the debt ceiling.

Then we will spend years engaged in a difficult but necessary fight over what kind of government we want and how much we’re willing to pay for it. At present, we’re operating a heavily armed, heavily indebted health insurance company — a giant, profligate Aetna or Prudential, with nuclear weapons. That’s not going to win the 21st century.

emphasis mine