Posted by Curt on 20 November, 2013 at 11:35 am. Be the first to comment!


Megan McCardle:

The Obamacare story is as much a political story, and a media story, as it is a policy story. If people think that the Patient Protection and Affordable Care Act won’t work, then it probably won’t; the politicians will start passing “fixes” that undermine the functionality of its interlocking parts, and companies and consumers will abandon the fledgling markets. If people think that Obamacare will work — well, it might not work anyway, because the real world does not always deliver rhetorically pleasing symmetry. But it certainly has a much better shot.

Of note, then, is one development you saw over the weekend: People are starting to talk about repeal. In early October, most people — including me — would have ranked this as wishful Republican thinking, along the lines of “repeal the Fed.” But the weekend brought us the National Journal’s Josh Kraushaar suggesting that Democrats might begin calling for repeal if things don’t get better soon.

Sounds crazy, right? After all, once entitlements are expanded, they never get pared back, unless they maybe go to welfare mothers. But not middle-class entitlements.

Actually, that’s not quite true. The New York Times looks back at the catastrophic-care program, or “Cat Care,” the 1989 Medicare expansion that passed with overwhelming bipartisan support and got rolled back less than 18 months later after Congress was besieged by mobs of angry seniors. (Not hyperbole; Representative Dan Rostenkowski was actually chased by such a mob at a town-hall meeting with his own constituents. Afterward, he plaintively asked his press officer how long it would be before the media foofaraw blew over. “Let me put it this way,” the flack is said to have replied. “When you die, they will play that clip.” Which turned out to be entirely accurate.) As former Massachusetts Congressman Brian J. Donnelly, a Democrat, who was then on the House Ways and Means Committee, put it:

“It blew up,” said Mr. Donnelly, who left the House, served as an ambassador and is now retired. “A lot of people in the United States already had this coverage. Almost every retired union member had the coverage through negotiated benefits.”
In addition, the revenue from the new premium was projected to exceed what was needed and quickly build a surplus, feeding a perception that the catastrophic-care program was a backdoor route to reducing the deficit through a tax on retirees.

To their chagrin, advocates and critics of the measure also discovered that many people who were supposed to be thrilled about the new plan misunderstood it and thought it was going to ease one of their great fears — the expense of living in a nursing home. When consumers came to realize that it did little to help with long-term care, enthusiasm dipped.

In a foreshadowing of the angry town hall-style meetings on health care in 2009, older voters began to protest the measure. They were inflamed by an aggressive direct-mail effort by the relatively new National Committee to Preserve Social Security and Medicare, which found itself fighting with the American Association of Retired Persons, a champion of the new law.

So it’s not actually impossible, just difficult. And there’s one grim lesson for Barack Obama’s administration: Cat Care gave new benefits to the majority of seniors. But to pay for that, it charged higher premiums to a substantial minority: more affluent seniors, many of whom already had supplementary insurance to cover the benefits it provided. The majority who were getting a free new benefit was not enough to counterweight the minority that was getting something taken away from them.

“But it’s such a small minority” is the administration’s rejoinder; the entire individual market covers just 5 percent of the population, and some of those people will be net beneficiaries of Obamacare, thanks to the subsidies. This logic was always a bit shaky — all the people who are ultimately expected to get additional coverage from the new law, including the Medicaid expansion, amount to only 7.5 percent of the population, so if 5 percent is too small to worry about, then probably so is the number of uninsured. But it’s not even true. I mean, it’s true that only 5 percent of the population gets its coverage from the individual market. But Obamacare is also making significant changes in the employer market. Twelve percent of workers are expected to be affected by the “Cadillac tax” on especially generous health-care benefits when it kicks in in 2018. When those people find out that they too will be in the group of people who can’t keep their plan, even though they like it, they will be livid. The unions, who will be disproportionately affected by this, are already getting restive.

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