Artur Davis: Another Thing Obamacare Got Wrong

It’s a good time to revisit a point that I made a year or so ago on George Stephanopolous’ “This Week” program. The new health-care law, for all of its moral claims about making medical coverage universal, will end up falling about six million people short of that goal, and the individuals left out of the equation will be the very low income uninsured who are touted as the primary beneficiaries of Obamacare. The New York Times has just summarized the reasons. While the law substantially expands Medicaid eligibility beyond its current focus on children and low wage families, the Supreme Court’s rewrite of the statute last summer has permitted states to opt out of the expansion with no penalty, and to date, 25 states have done just that. Under the new law, there are no provisions to capture the sizable pool of people whose states decline to raise their eligibility standards and who don’t qualify for traditional Medicaid: that is, low income but able bodied adults with no children, and adults with children but whose income is between 32% and 100% of the federal poverty level (which translates to between $6,250 and $19,530 for a family of three).  And Obamacare’s insurance subsidies for lower middle income families were allotted exclusively for individuals or families earning above the poverty line.

The political blame has rested primarily with the Republican governors who have not been moved to accept the strings and, post 2018, new financial obligations that come with growing their Medicaid program, despite the large numbers of working, uninsured poor who live in many of their states.  But there is nothing unpredictable about cash starved states with a low tax base, or states whose voters are overwhelmingly hostile to the new healthcare law, refusing to assume responsibilities that will be unpopular in the short term and costly in the long term. Nor is there any huge surprise that the component of Obamacare which was supposed to avoid this dilemma, a draconian demand that states accept the expansion or risk their whole federal Medicaid match, would face a severe legal fight.  In fact, the same Supreme Court that sharply split over the constitutionality of the insurance mandates in the Affordable Care Act agreed 6-2 that the “take it or risk your whole program” threat was illegal.

Given those realities, one of the centrist criticisms of Obamacare—the argument that it is needlessly ambitious and overshoots the aim of extending insurance to Americans who couldn’t afford healthcare—seems to have been borne out.  There were any number of viable ways the White House and congressional architects could have avoided this trap, ranging from taking then Chief of Staff Rahm Emanuel’s advice to shelve broad-based reform for a more targeted version that would have shored up Medicaid and picked up 100% of the tab, to establishing a pool for catastrophic coverage for low wage earners facing medical emergencies. Or, in other words, abandoning the expensive and complex array of reforms in service delivery and doctor reimbursement that have muddled the law without building its popularity, in favor of a straightforward low-income assistance program.

Liberals will argue that even a trimmed down Obamacare would have faced partisan attack. Undoubtedly, but what liberals tend to overlook is that the ferocity of conservative attack on the law rested mostly on its bewildering details and its overt aspirations of realigning the healthcare system across the board. Designing an initiative that focused on the very people who are about to fall through the cracks would have set up a much tougher target for congressional Republicans. The battle that ensued would have been a conventional back and forth over costs, but not the kind of long-running fundamental clash over principles that Obamacare has turned into. Furthermore, heeding the suggestion of scaling back Obamacare in the spring of 2010, when the original version was floundering, likely would attracted some number of Republican senators and a limited, but politically relevant group of Republican House members.

A smaller, narrower health care reform might not have been the credential builder the White House seemed so eager to obtain when Democrats controlled two houses of Congress. But it would have been a morally defensible, more affordable plan to concentrate on removing economic status as an obstacle to healthcare, a goal that a number of Republicans would not have felt comfortable fighting, and most of the ones who fought would not have spent three years of capital re-litigating the loss. (it is not hard to imagine that if Obamacare were a buffed up Medicaid and nothing more, that repealing it might engage the average Republican about as much as reversing the Dodd Frank financial reform, or demanding that wasted stimulus funds be repaid, that is to say, not very much at all). There are roughly six million poor adults who will wish the tradeoff had been made as they discover that good medical care is still out of their reach, three years and a trillion dollars later.