More Like the Not-So-Affordable Care Act

Let’s state it plain: the new health care law will cause costs to rise.

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In a policy debate, it can be helpful to clarify what each side's claims are. Doing so makes it easier to see whose predictions are ultimately borne out by reality, or at least which parts of divergent expectations prove most accurate. It also makes it harder for people to conveniently claim after the fact that what is occurring was what they were predicting all along.

We're seeing that already from supporters of the Affordable Care Act, aka Obamacare. At first, their assertion was that the law would make health care, well, as the name implies, more affordable. Insurance premiums were supposed to come down, and overall expenditures on medical treatment were supposed to decline as people gained access to "preventive" services.

Over time, as rubber has met road and more evidence has pointed toward an increase rather than a decrease in health care costs, Obamacare proponents have quietly begun a major bait and switch. Once certain the law would lead to across-the-board reductions in insurance premiums ("We estimate we can cut the average family's premium by about $2,500 per year," quoth then Senator Barack Obama), today they argue that the purpose of the law was never to make health insurance cheaper for everyone.

[Check out our editorial cartoons on President Obama.]

Instead, they say, the ACA was meant to broaden the swath of Americans who could access health care by prohibiting insurance companies from turning away or charging more to people who are sick. And if some people have to pay more than they otherwise would, it's OK, because they'll also be getting more in the form of benefits they don't want!

Needless to say, ACA opponents' concerns have not been assuaged by this seventh-inning copout. Yet there's still plenty of time for either side to be proven wrong. Many key pieces of the legislation won't go into effect until the beginning of 2014, and even then, prices could take time to settle into their new equilibria. A fair assessment will be the one we can only make two or three or four years down the road, after the policies enacted have had the chance to bring about– or not– the outcomes promised by their supporters.

Until then, I think it worth stating plainly what Obamacare opponents like myself actually see coming. This establishes a fair yard stick for measuring the correctness of our predictions and makes it harder for the other side to decide on our behalves what we "really thought would happen." (It also gives them a petard with which to hoist us if we turn out to be wrong.)

[See a collection of political cartoons on health care.]

First, we think the average cost of health insurance will go up. That means the amount being paid, per person, by some combination of employers, individuals and the government (via subsidies) will be higher in the future than it is today. And second, we think that young healthy people– to the extent they comply with the mandate at all– will be disproportionately harmed.

In other words, far from the burden being shared equitably across the population, these Americans will bear much of it themselves, in part because they'll be subsidizing the sick Americans the law forces insurers to cover below cost, and in part because the law will be forcing them, the young and healthy, to buy a more expensive product than they actually want.

We're not arguing that some sick people won't now be able to receive coverage more cheaply than a free market would dictate. We're not arguing that some poor people won't receive enough in government subsidies to offset the increases in the cost of their new plans. The argument is not that no individuals will see their premiums go down – it's that an even larger number of individuals will see their premiums go up such that on average, costs to society will be higher in the end.

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