The Obama Mandate

Reasons you have been told to like Obamacare:

  1. Obama won the last election, he has a mandate to fulfill his vision.
  2. People love it.
  3. It will save the average family money – $2500 per family, per year.
  4. The law is well thought out.

Reasons you should not like Obamacare:

  1. Be careful what you call a mandate. When someone wins an election, it does not mean that he or she now has an explicit mandate to enact every single policy they support. And we only have to look back one president to understand why. Faced with plummeting approval ratings a year after his reelection, few liberals would argue that George W. Bush had a second-term mandate for much of anything.  And yet, a year before, he had won the presidency by a similar percentage of the popular vote as Obama (four-tenths of a percent less), becoming the first president in forty years to win reelection while gaining seats for his party in both the House and the Senate, and realizing proportionately larger gains in Congress relative to Obama. President Obama’s reelection victory, like Bush’s before him, is not itself a sufficient condition to declare a mandate. True, Obamacare was a major issue in the 2012 election. However, that’s still a long way from translating a binary election result into a mandate on a specific policy.
  2. People do not love it. According to the current average of all polls on Real Clear Politics, 39.4% of people favor the law, while 51.4% oppose it.
    • Excuse #1: Partisan opposition and public ignorance are to blame for the bad poll numbers. When you use the term “Affordable Care Act,” opposition drops from 46% to 37%.  Answer: True, but misleading. Support also drops from 29% to a meager 22% when this term is substituted. And 22% approval does not a mandate make.
    • Excuse #2: Lots of respondents who answer that they “oppose” the law actually aren’t opposed, they just think that the law doesn’t go far enough. Answer: Mostly false. Polls show those who oppose the healthcare law because it “didn’t go far enough” are between 8% and 11%. Regardless of whether you would call this “a lot,” the point is that they oppose the law. Some media outlets have attempted to lump this group in with the pro-Obamacare crowd by claiming that they are de facto supporters. They are not. The logic used to arrive at this conclusion is absurd. Would civil rights activists have been “opposed” to Lincoln’s Emancipation Proclamation because it did not “go far enough?” Should activists have “opposed” women’s suffrage because they still hadn’t closed the gender pay gap? No, because rational people support necessary and positive steps that move them towards a worthy goal. And it looks like Obamacare failed to live up to that standard.
  3. It will not save you money. At least, not if you’re a typical American family. Despite being promised at least a $200 billion annual reduction in expenditures and a $2500 per family, per year decrease in premiums, the administration’s own actuaries now predict the ACA will cause an increase in spending of $621 billion over the next decade. As a percentage of national healthcare spending, that’s actually nothing to be upset over. What is upsetting, however, is how it’s been sold to us: how many fewer people would have supported the law if you told them that, rather than the endlessly-parroted $2500 in annual savings, the ACA was far more likely to increase their premiums? While it depends a great deal on where you live, calculations using HHS data reveal that premiums will go up an average of 97%-99% for young men and 55%-62% for young women who purchase coverage on their own.
  4. The law is well-intentioned, but poorly executed. Let’s start with the good stuff, because many parts of the law represent positive changes: coverage of preexisting conditions, allowing young people to stay on their parents’ insurance until age 26, removing annual and lifetime coverage limits, and closing the Medicare “doughnut hole.” In light of these positives, and recognizing that Republicans have tried a ton of times to repeal  it and failed, it is time for Republicans to give up that fight. And yet, there are many serious flaws that both parties should work together to fix, namely:
    • The employer mandate forces HUGE changes in the way businesses hire employees, creating a bias towards part-time work.  For instance, in the first six months of this year, 97% of net job creation was part time work. Keith Hall, the guy who ran the U.S. Bureau of Labor and Statistics until last year, said of his own agency’s numbers, “I’m not sure that has ever happened over six months before.”
    • If you think the above is a coincidence, consider the following report [pdf and selected chart]:
      • 20% of small businesses surveyed “have or plan to reduce hiring to get/stay under the 50 employee ACA threshold.”
      • 15% of medium to large businesses and 20% of small businesses “have or plan to adjust hours so fewer employees qualify for full-time employee medical insurance requirement.”
      • 17% of small businesses “have or plan to reduce workforce due to costs directly associated with the ACA.”
    • Even among businesses that are not firing or refusing to hire people due to the ACA, the law will increase costs and frequently cause them to drop their employees’ insurance coverage.
      • The ACA will be cost-positive or neutral for only 12% of businesses, with 88% of businesses reporting increased costs “directly associated with the ACA,” and 41% reporting an increase of 5% or more.
      • According to McKinsey & Company, “30 percent of employers will definitely or probably stop offering employer-sponsored insurance in the years after 2014. Among employers with a high awareness of reform, this proportion increases to more than 50 percent.”
    • Obamacare is neither good capitalism nor good socialism. Wherever you fall on the ideological spectrum, unless you are a simple party loyalist, you probably are not very happy.
      • For the free marketeers – sure, it fits the caricature of capitalism: huge corporations stand to make a ton of money, and the bill was designed, drafted, and implemented by an executive of the largest health insurance company in the nation, so some folks stand to get rich. But when you look past the profits, forcing people to buy things is hardly a “free market” approach.
      • For the left-leaners, specifically those who favor a single-payer system, I have yet to see anyone clearly articulate how Obamacare moves the country in that direction. Is giving tens of millions of new customers and countless billions to giant insurance companies somehow putting us closer to a public option? Is increasing the power of Big Pharma now going to make it easier for politicians to ignore their influence later? Further, imagine all the righteous indignation you would feel if Republicans had passed a healthcare law that funneled billions of public dollars into the coffers of massive corporations. Then ask yourself – how is this any different?

Now, none of this means that Republicans are justified in shutting down the government. Heck, the Syrian government is still paying its employees. Neither does it mean that the GOP should hold even more votes on repealing Obamacare. But it does mean that Democrats do not have a mandate to ignore public input and criticism as we continue to learn more about a very complicated law.


One thought on “The Obama Mandate

  1. You are missing a key benefit of ACA: people who are currently denied coverage can now obtain health insurance. I would argue that solving this one problem has huge implications for the positive economic effects of ACA. Although entrepreneurship accounts for almost 2/3 of the job growth in America (, there is currently a huge disincentive to leave your full-time job and start your own business: you can be denied healthcare coverage. Same goes for the employees that you want to hire.

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