The race is on to persuade Americans that Obamacare is either the worst idea since Prohibition or the best idea since Social Security or Medicare.
A great, hyper-partisan public relations war is now under way that will continue through the 2014 if not the 2016 elections.
So far, from September 2013 through March 2014, I count nine battles in the PR Informational War, based largely on data analysis.
Next comes a TV, radio, print and Internet ad campaign and propaganda war going through the November 2014 midterm elections if not beyond to sway and manipulate voters. That ad war has already begun in the states of vulnerable incumbent Democrats. In January, they began to face a $20 million barrage of negative ads from Americans for Prosperity, funded in part by the billionaire Koch brothers. Patriot Majority USA, a progressive group, is firing back with ads attacking the Koch brothers and likely Republican nominees, though the PAC has not yet begun to match the AFP's ad buy.
It's not clear yet whether or when Democratic candidates themselves will respond aggressively and tout the successes of the Affordable Care Act. Yet they do have increasingly positive data to trumpet.
Like most complex legislation in the real world, Obamacare is shaping up to be three steps forward and one step backward -- a net plus, but with some real downsides.
Latest Rounds in the Perceptions War, Back to the First
* Round Nine: Projections on Obamacare Participation Longterm. By the end of 2016, Robert Laszewski, president of Health Policy and Strategy Associates, projects that 20 million people should be enrolled "for a sustainable pool," with a mix of healthy and sick people. The non-partisan Congressional Budget Office projects that by 2017, Obamacare will slash the number of uninsured. Some 28 million Americans will enroll in health insurance, down from 57 million in 2013.
After 2017, the remaining uninsured would consist of 30 percent undocumented immigrants, 20 percent -- those eligible for Medicaid but choose not to enroll; five percent ineligible for Medicaid because their state has chosen not to expand coverage, and 45 percent who choose not to purchase insurance through their employer or on the individual market. CBO report (pdf).
Nearly six million poor Americans will be deprived coverage because (currently) 25 states refuse to provide Medicaid insurance coverage for them. After 2017, nearly 30 million will remain uninsured, the CBO estimates. That number could continue to decrease if local health insurance markets expand, offer more competition or consolidate and offer more efficient services, if states that have so far opted out of Medicaid expansion agree to do so, and if Congress passes immigration reform allowing undocumented immigrants a path to citizenship with health insurance.
Somewhat less than four million consumers (see below) may, in the first year of Obamacare, find health care policies too expensive in their local marketplace, deductibles higher, or their employers pressuring workers to work part-time in order to avoid paying insurance benefits. A chunk of these consumers may simply prefer to pay a penalty for non-compliance with the law. Market reforms may eventually reach them.
Since more than 13% of American motorists did not have legally required auto insurance in 2011, during the Great Recession, despite serious financial penalties and even the threat of jail in some states, it's unlikely that the US will ever reach 100% compliance and complete universal coverage without a single payer system that pays all health care costs and taxes all citizens a relatively small amount for providing health care, as Canada and many European nations provide.
* Round Eight: Obamacare's Impact on Growth in Federal Health Care Spending and the Deficit, Short-term and Long-term Projections. A CBO study estimates that federal health care spending for 2012 is coming in at 15% below initial estimates, and that hundreds of billions of dollars are being saved in Medicare and Medicaid. For the fourth straight year, the rate of growth in health care spending has declined, and the CBO attributes "a significant part" of the savings to health care restructuring resulting from Obamacare, according to Forbes.com.
As for the cost of emergency room visits, studies conflict on the impact of Obamacare. A years-long study in Massachusetts found an eight percent decrease in emergency department visits with the enactment of Romneycare, the model for Obamacare. But an Oregon study indicated a 40 percent increase in emergency room visits when Medicaid was expanded. Initially, it seems emergency rooms will be over-burdened and under-staffed, but if they learn how to better manage patients and set up more clinics for routine and preventive care, costs could decline, wait times could shorten and care could improve.
* Round Seven: Obamacare's Impact on US Employment, Short-term and Long-term: Opponents and supporters of Obamacare rushed to put a spin a CBO projection about the workforce impact of Obamacare through 2021. Joseph Rago of The Wall Street Journal editorial page published a flattering portrait of Casey Mulligan, the University of Chicago professor who "exposed the job losses in Obamacare" and convinced the CBO to revise its earlier numbers.
Thom Tillis, a Republican US Senate candidate in North Carolina, immediately accused incumbent Democratic Senator Kay Hagan of causing the loss of two million jobs by supporting Obamacare.
Supporters countered that, actually, two million people over eight years would experience more economic freedom, decide not to work, or work less, or become entrepreneurs and consultants, because they were no longer dependent on their employer for affordable health insurance.
Factcheck.org called out Tillis and other Republicans for misusing the CBO report, and quoted the author of the CBO study to explain how some Republicans were distorting the analysis.
Round Six: Government Bailout or Reasonable Assistance to Insurance Companies? Opponents of Obamacare say that it amounts to a taxpayer-funded bailout of the insurance industry, to the tune of $450 million for one insurer alone, Humana. Supporters reply that no, it's a reasonable feature of the law, a built-in shock absorber that will stabilize the insurance market "while carriers adjust to new regulations that prohibit them from denying coverage, withholding benefits,or charging higher premiums to people with pre-existing medical conditions." Unless you're an ideological zealot, it's really premature to come to any conclusions about this. This debate will go on until at least 2017.
* Round Five: More than eight million signed up before deadline to avoid $100 tax penalty. The Obama administration announced that more than eight million Americans enrolled in health care through the exchanges by the March 31st open enrollment deadline to avoid a tax penalty of $100 for lack of coverage. This number is AHEAD of the non-partisan Congressional Budget Office's projections. And the Gallup Poll reported that the number of uninsured has declined from a peak of 18% in 2013 to 15.6 percent in the first quarter of 2013, the lowest level since before the recession began in 2008.
Obamacare opponents remain skeptical of the numbers. They gleefully predicted that sign-ups would fall so far short that the system would collapse, in an "adverse selection death spiral." But even Obamacare critic Avid Roy of Forbes.com wrote a column headlined, "Sorry, Conservatives, But Based On the Latest Sign-Up Figures, There Won't Be an Obamacare Death Spiral."
* Round Four: Obama Administration's PR Comeback. The front end of the website was mostly fixed by December 1, 2013 and Americans started enrolling in force. More than two million Americans signed up for Obamacare by the third week in December, more than 3.3 million by the end of January 2014, and more than 4.2 million in February.
Journalist Andrew Sullivan declared "a new era of freedom begins now" for those Americans newly enrolled in affordable health insurance, no longer discriminated against because of pre-existing conditions. Their most common expression? "Relief." Plus, "peace of mind, security and health,' Sullivan wrote, citing his own experience as an HIV-positive entrepreneur and the experiences of others.
More than four million poor Americans signed up for expanded Medicaid under Obamacare, to begin receiving health care coverage January 1, 2014. As Ezra Klein wrote on Bloomberg.com, "If the point of health-care reform is covering people who need health insurance, the expansion in Medicaid coverage should be a huge win. The people qualifying for Medicaid are, on average, poorer, sicker and more desperate than the people signing up for private insurance."
* Round Three: Insurance Cancellations for About Four Million Americans: The Associated Press estimated in December that 4.7 million Americans received cancellation notices from insurance companies because their plans did not meet Obamacare's higher standards. Obama offered temporary fixes -- allowing insurance companies to keep consumers on substandard plans until the end of 2014, and waiving the individual mandate for the first year for consumers' whose plans were cancelled -- are likely to reduce that number. But states and insurers ultimately decide how broadly the waivers apply, and the AP offered a state-by-state breakdown of waivers.
If this group, somewhat fewer than four million people, don't find better insurance for a reasonable price, they could feel worse off, especially if they make too much money ($46,000 for individuals; $96,000 for families) to qualify for a significant subsidy and don't find satisfactory health plans in their marketplace.
This group of less than four million could deeply resent Obamacare and see it as a sham. They could resent the $100 tax penalty for refusing to garner insurance this year. Some independent contractors, small businessmen, or freelancers who do not have employer-based insurance may lose financially from Obamacare. They may be required to pay more for new policies -- up to eight percent of their income. These policies should offer more comprehensive coverage, but could cost more. Some will be satisfied to find more comprehensive insurance, even if it costs more. But probably a majority of the four million will not be happy, and could even be outraged.
They could be more vocal and politically powerful than the 14 million who are likely to be better off. Discontent causes anger and tends to spur political action, while contentment may simply cause complacency and passivity -- even non-voting in the midterm elections -- rather than gratitude and a desire to reward the political party that improved your status.
* Round Two: Embarrassing Obamacare Website Debacle. President Obama and the Democrats clearly lost Round Two when they acknowledged that the Obamacare rollout was a disaster, the website didn't work and Obama was forced to admit he misled the American people when he said everyone who liked their current insurance plan would be able to keep it. As it turns out, not everyone, only the vast majority who like their current insurance plans, will be able to keep them. Somewhat less than three percent of the population, mostly those who buy insurance independent of an employer on the private market, if their insurance policies are substandard and do not meet mimimal government requirements, will not be able to keep their health plans even if they like them.
Call this Obama exaggerating or "lying," if you must be hysterical, but strategically it was essential for Obama as the proposal's chief salesman to assure the nation that the ACA would be not be disruptive to those who are already insured. Telling Americans they would "probably" be able to keep their current coverage would not have clinched the deal.
* Round One: Government Shutdown. Republicans are widely perceived to have lost Round One when they shut down the federal government, hurt the economy and got nothing in return for their antics. They conveniently forgot history: the models for Obamacare were a) originally a conservative Heritgage Foundation think tank proposal; and b) Romneycare in Massachusetts. They conveniently forget that social Security in the 1930s, Medicare in the 1960s, and the Medicare prescription drug benefit (Part D), championed by President Bush, all got off to rocky starts, but are now solidly popular programs with the vast majority of Americans. Some of the same Republicans who defended the Bush administration's snafu-ridden rollout of Medicare Part D now excoriate the Obama Administration for its introduction of the Affordable Care Act.
Skirmishes Over Executive Branch Authority to Delay Mandates in Congressional Legislation
In the summer of 2013, when the Obama administration announced that it was delaying the implementation of the tax penalty/mandate on small-to-medium-size businesses to 2015, and again in February 2014 when the Treasury Department announced that the mandate tax was going to be delayed again until 2016, Obamacare opponents howled with outrage that this was an impeachable offense. The President and the Executive Branch do not have the authority to decide what laws passed by Congress they are going to obey and disobey, or wantonly revise, they contend.
Since these opponents generally did not accept the US Supreme Court decision in 2012 declaring most of Obamacare constitutional, it's unlikely they will gain standing to challenge the administration's actions. And since most of the opponents are hard-right partisans who revere Ronald Reagan, a president who repeatedly defied congressional mandates and aided the anti-communist Nicaraguan contras despite a congressional ban on such aid, their double standards are obvious and their credibility is lacking. One does have to admire the principled opposition of a Washington Post editorial against presidential over-reach in delaying the mandate. At least they don't have different standards for presidents depending on political party.
But as I advised my conservative friends on Facebook, lawsuits forcing the Obama administration to immediately impose employer and employee mandates aren't likely to succeed. Pushing for Obama's impeachment will be self-destructive on Republicans' part. The public would see them as zealots grasping desperately at every straw imaginable. As difficult as it may be, they might as well accept that Obama is president until 2017, he's not going to be impeached, Obamacare is not going to be repealed even if Democrats lose the Senate in November 2014 (Obama will still have veto power), and btw, the Confederacy lost the civil war. Yes, I know: "Fergit? Hell no!"
Battle of Anecdotes
Several PR rounds will be fought throughout 2014 spotlighting miraculously positive and horrifyingly negative anecdotes, with no certainty as to how representative or fully accurate these stories actually are. Let the public beware of such propaganda.
Impact of Midterm Elections on Obamacare
Voters may render another verdict on Obamacare in November 2014, possibly by turning the Senate over to the Republicans -- throwing out six Democratic senators (current ratio, 55 Democrats, 45 Republicans). I think that's unlikely, even though an incumbent president's party usually loses congressional seats in the last midterm election of second terms. After the 2014 elections, I suspect the pattern of a divided legislative branch will continue. This New York Times analysis reached the same conclusion.
Obamacare Winners and Losers
So, who are the winners and losers under Obamacare? It depends on who's doing the calculations, but in 2014, at least 14 million people are likely to be better off, according to the Congressional Budget Office, if you add the seven million projected Obamacare sign-ups to seven million new Medicaid enrollees. About five to seven million people will qualify for subsidies that will pay most of the cost of comprehensive plans.
Eventually, the $100 tax penalty or fine will increase to as much as eight percent of income. (If you can't find a health insurance policy for less than eight percent of your income, you're exempt from the penalty.)
Public Opinion of Obamacare Depends on Economy's Performance
If unemployment rises or does not decline below 7.2% by the 2014 mid-term elections, and certainly by the 2016 general elections, Obamacare's perceived drag on employment could indeed hurt Democrats.
If unemployment declines to six percent or lower in 2014, and the public clearly feels the country is in economic expansion mode, opposition to Obamacare could hurt those Republicans who voted to shut down the government and classified Obamacare as an unmitigated disaster when it actually helped far more of their constituents than it hurt, with a minimal negative impact on business growth.
Obamacare, at least initially, greatly expands demand for doctors and nurses, with shortages approaching 20 percent at many hospitals, according to Forbes.com, as potentially millions of new patients start utilizing new insurance coverage. Because of changes in the structure of health care, many doctors are leaving independent practice to take salaried positions on hospital staffs, the New York Times reports.
Medical and nursing schools may be under increasing pressure to graduate students quicker to fill demand, or to allow students to work part-time in clinics and emergency rooms experiencing high demand.
Obamacare's Impact on the Urban and Rural Poor Unknown
Health care is a complex industry. Even before Obamacare was enacted, many hospitals, especially those in poor and rural neighborhoods, were struggling financially. An epidemic of hospital closures has occurred since 2000. "All across the country, nonprofit hospitals dedicated to serving the poor and uninsured in exchange for tax breaks and federal subsidies are closing money-losing facilities and setting up in more affluent communities where patients are more likely to have health insurance," US News reported.
Obamacare is set to reduce federal subsidies to hospitals, especially non-profit hospitals in poor neighborhoods where it is presumed far more patients will have insurance. But that's a gamble that may not work out financially for some hospitals, especially in states that don't expand Medicaid. The USNews report on hospitals of the present and future is worth a read.
Are employers limiting workers' hours, to avoid paying workers health insurance?
Administration economists have said they don’t see evidence this is happening on a large scale and the Congressional Budget Office came to the exact same conclusion. But anecdotes of such decisions have been all over the media. Jed Graham of Investor’s Business Daily has been tracking them.(Hat tip: AndrewSullivan.com.)
Economists will continue to debate the impact of Obamacare on employment, probably for years to come, based on their own ideological inclinations:
- ObamaCare Will Drive Up Unemployment and Health Care Costs (Forbes.com)
- Employers Plan to Hire More Full-Time Workers As Obamacare Rolls Out (ThinkProgress)
Some leaders of small-to-medium-size businesseses (with 50 or more employees) complain that they could hire more workers if they didn't have to pay employees' health insurance or the $2,000 to $3,000 penalty per worker for not providing it. The penalty for small-to-medium size businesses has been delayed until 2016. Of course, these businesses could also hire more workers if they didn't have to pay minimum wage, unemployment insurance, pay into workers' social security, or provide any benefits whatsoever. A strong argument could be made that these businesses are freeloaders. They want to enjoy the fruits of workers' labor, but don't want to pay the fair cost of hiring workers, and instead seek to shift the cost onto the government or society.
This debate is ideological -- libertarian vs. communitarian -- and will not be settled by economic progress reports any time soon. But the future growth of the economy in the near future will probably determine which ideology gets the upper hand with the public before the 2014 and 2016 elections.
Consider New Legislation in 2017
Jonathan Gruber, an architect of the Massachusetts plan (RomneyCare), predicts it will take three years for the full impact of Obamacare to take hold, as it took three years for RomneyCare to take hold. Offering a litany of improvements for millions of Americans that have already been implemented by Obamacare, Gruber notes that "we won't be able to draw final and firm conclusions until late in 2016."
Jonathan Cohn in The New Republic summed up Obamacare's impact best:
"People tend to talk about Obamacare as if it’s going to be a ringing success or a total catastrophe. In reality, it’s likely to be a mix of good and bad news, with lots of variation from state to state, and with lots of unanswered questions that linger for months and even years."
At that point, in 2017, Congress may want to consider improvements to Obamacare.It's certainly not the last word or final reformation of America's extremely complex health care system.