Obamacare Meets Reality (And Wins)

Reality is starting to assert itself. You won’t read this at the Drudge Report, but evidence is accumulating that Obamacare has been working over the past three years, and it’s poised to be a success moving into its “insurance exchange phase.” This comes from Jonathan Chait writing in New York magazine:

At the time of its passage, the received wisdom in Washington (and not just among partisan Republicans) deemed Obamacare’s cost reforms pitifully inadequate. […] 

In the three years since, a steady accumulation of evidence has amassed to the contrary. Through a thousand tiny nudges, the law has transformed the entire medical field from one that encouraged more, and more expensive, care with no regard for outcome into one geared toward paying for quality. Some of the changes have been blunt and simple. The old pay-for-quantity system rewarded hospitals for doing a bad job, since patients who contracted an infection or received poor treatment would come back for more treatment, bringing in a second Medicare reimbursement. Obamacare created penalties for hospitals with high rates of infection or patient readmission. Lo and behold, this year, Medicare announced that its patient-readmission rates fell—“a feat that long seemed beyond reach,” the Washington Post reported.

Obamacare also imposed a tax on the most expensive insurance plans, and though the tax does not take effect until 2018, employers have already started shopping around to avoid its bite. “Companies hoping to avoid the tax,” reported the New York Times last spring, “are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care.”

The most dramatic change underfoot is an entrepreneurial wave encouraged in sundry ways by Obamacare. The law encourages the creation of Accountable Care Organizations—doctors who band together and get paid based on their patients’ medical outcomes rather than on how many tests and procedures they perform. As Bloomberg News reported in June, “Hospitals are improving care and saving millions of dollars with one of the least touted but potentially most effective provisions of the law.” Walgreens is making a huge investment in its own ACOs, and the consulting firm Accenture predicts the law will continue to prompt an explosion of walk-in clinics. The significant increase in doctors and hospitals converting to electronic medical records and other technological innovations has helped create “a new marketplace and platform for innovation—a health-care Silicon Valley,” as an awed Thomas Friedman reported.

All these reforms have added up to a revolution in modern medical economics. Health-care inflation since 2011 has fallen to its lowest level in half a century. The Congressional Budget Office estimates of Obamacare’s costs, widely derided at the time of its passage as too optimistic, have thus far proven too pessimistic. The agency has already cut $600 billion off the expected ten-year spending total for Medicare and Medicaid. If the reforms continue to bear fruit, costs will come in even lower. […]

Among health-care wonks, this is no longer a controversial assertion: The evidence thus far suggests Obamacare’s cost reforms are a staggering success.

And here’s Andrew Sullivan this morning:

I hope you’re sitting down. After all the stories about a “train-wreck”, after every Dr Seuss classic read out loud in the Senate, after sticker shock shock and crazy-ass Forbeshit-pieces, we now greet something called reality.

Sullivan then quotes the following from The Washington Post:

The report [on the Obamacare exchange premiums], released Wednesday by the Department of Health and Human Services, showed significant variation in the insurance premiums that Americans shopping on the individual market could pay under the president’s health-care overhaul. Across the 48 states for which data were available, the unsubsidized monthly premiums could be as low as $70 for an individual and as high as $1,200 for a moderate plan for a family of four.

The average national premium for an individual policy will be $328 in 2014, before including any of the tax credits that will be available to low- and middle-income Americans to help them purchase coverage.

This sounds to me like game, set, and match for the success of Obamacare (that is, so long as Republicans don’t figure out a last minute way to blow-up the program by keeping healthy people off the insurance roles). Absent a “death spiral” where only sick people sign-up for the exchanges, the promise of Obamacare in theory looks to be matching up pretty darn well with reality.

And, ultimately, Obamacare has always been a national version of the Romneycare model that has long worked in Massachusetts, so the Republican Party’s far right is in the process of being foiled again.

Welcome to the 21st century.

Meep meep.

About Santi Tafarella

I teach writing and literature at Antelope Valley College in California.
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