ObamaCare and American Resurgence
America needs a change of direction domestically to cope with a dangerous and disorderly world.
Sept. 16, 2014 7:53 p.m. ET
We see Chet Burrell, head of Maryland insurer CareFirst, emailing in alarm last April to White House aide Valerie Jarrett. The administration had just publicly stated its "risk corridor" plan would be revenue neutral—i.e., no extra taxpayer dollars would be available to cover insurer losses.
We see Mr. Burrell warning that sticking with this plan would mean politically "an unwelcome surprise," namely premium hikes of 20% or more later this year as ObamaCare policies come up for renewal.
We see Ms. Jarrett emailing back in concern. We see her later assuring Mr. Burrell that insurers would get 80% of what they sought. After another program tweak in May, the figure would be closer to 100%.
The non-surprise revealed here is that ObamaCare turns out to be just another subsidy program, throwing money at health care. In economics, you can't subsidize everybody but we're trying: 50 million Americans get help from Medicare, 65 million from Medicaid, nine million from the Department of Veterans Affairs, seven million (and counting) from ObamaCare, and a whopping 149 million from the giant tax handout for employer-provided health insurance.Sure enough, this week came the fallout. Bob Laszewski, a policy wonk and former insurance executive whose bloggings are closely followed in the ObamaCare debate, writes that the administration has succeeded in temporarily suppressing incipient ObamaCare price hikes, contributing to an illusion of sustainability. He suggests that some insurers might even slash rates to "grab market share because they have nothing to lose with the now unlimited ObamaCare reinsurance program covering their losses."
Much of this money (which will total about $1.3 trillion in 2014) is shoveled out regardless of need, driving up prices and spurring production of services of dubious value. The spending is less effective at improving the nation's health. An "Affordable Care Act" worth its title would have gotten us off this kamikaze mission. It didn't.
Then there's Halbig v. Burwell . This is the latest legal threat to ObamaCare's improvisational unfolding. At issue is whether the words in the law mean anything—i.e., whether Congress in fact authorized the subsidies the administration has been doling out to users of the federally run (as opposed to state-run) health-care exchanges.
A cosmic test of any administration is whether it can escape town before its misplaced priorities catch up with it. An obvious Halbig solution would be for Congress simply to clarify what the words mean—except the House is now controlled by a party not a single member of which voted for ObamaCare.
The president, meanwhile, is weakened by a deteriorating world situation while he focused on "nation building at home"—by which he meant ObamaCare. He is weakened by U.S. companies accelerating their flight abroad from an unreformed U.S. tax system—because the only reform Mr. Obama was interested in was ObamaCare.
What will the president's legacy be if not ObamaCare? A fracking boom he had nothing to do with? His threadbare claim to have rescued the economy from the 2008 meltdown?
ObamaCare has become his Ukraine. It cost his party control of Congress. It might have cost him re-election if Republicans hadn't nominated somebody who reminded Americans of everything they hate about Wall Street. It barely squeaked past the Supreme Court. It got him sued by the House speaker. It has required ever-more flagrantly lawless exercises of executive power. Even the IRS scandal has its roots in ObamaCare—recall that Lois Lerner was allegedly tasked with suppressing tea party activity in the runup to 2012.
Halbig, which remains to be adjudicated by the appeals system, may be a very big deal for the administration (to modify Joe Biden's phrase). But it's not a big deal for health-care reform, the unstarted work of closing the gap between cost and benefit so the U.S. can avoid bankrupting itself. Suddenly luminous is the true historical significance of ObamaCare: A left-liberal president, in the backwash of a global economic crisis that he could plausibly blame on Wall Street, could not get a "public option" through an all-Democratic Congress.
The high tide for single payer has come and gone in America. The action now moves permanently to the challenge of paying for existing welfare programs, not creating new ones.
This connects to another Obama legacy, a more dangerous and disorderly world. A world in which America needs to tighten up and toughen up. A world in which rising powers (e.g., China) no longer can be expected to finance endless American deficits so Americans can spend somebody else's money on health care. Election 2016 can't come fast enough for an America that needs a radical change of direction to cope with a changing world.
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