Why Obamacare Won’t Do Much Good, Or Much Harm

The results are in, and the argument is settled. We can now say conclusively that the Affordable Care Act—otherwise known as “Obamacare”—is now either 1) saving lives by bringing health care costs under control or 2) destroying freedom, justice, and America’s future. It all depends, of course, on who you ask.

And as Republicans in the House of Representatives gear up for their nine-thousandth vote to repeal Obamacare, while Democrats around the country prepare talking points about how well it is working, I would like to humbly suggest that both sides are full of doo-doo. The most praised and hated piece of legislation of my adult life isn’t actually doing very much at all—and that it will continue not doing much (good or bad) at all until it is either repealed or replaced with legislation designed to do something like, say, reform the health care system.

The Affordable Care Act does not really change anything about the health care system. What it does is change, quite modestly, the way that we pay for things in the health care system by taking the existing health-insurance model and overlaying it with a Rube Goldberg contraption of extensions, regulations, and workarounds designed to get almost everybody on the health insurance roles.

But nothing in the Affordable Care Act addresses what I consider to be the fundamental problem of the American health-care system, which is that health care is not the sort of thing that insurance is good at rationing. Think for a moment. Almost every other type of insurance distributes a small amount of risk among a large number of people. Most people, in a given year, do not die. Most cars do not get in accidents. And most houses do not burn to the ground.

But every year, almost everybody consumes some kind of health care: doctor visits, maintenance prescriptions, antibiotics, etc. While health insurance can–and should– pool the risk of catastrophic health-care costs, it has become a way to distribute a basic consumer commodity. This, in turn,has caused the cost of that commodity to rise well above the price that people are willing to pay for the service (aka the “market value”). Because most people’s insurance is provided by employers, the premiums themselves do not figure into people’s purchasing decisions. Deductibles and copays become defacto market prices, making even basic care completely unaffordable for those without insurance.

Imagine what society would look like if, instead of shopping at grocery stores, 75% of people received “hunger insurance” from their employers, driving the price of food up to level of the standard copay. To most of us, it would not matter that a loaf of bread cost $20 or that milk ran $50 a gallon, as our portion of the bill would be about what we pay now. But imagine being a person without hunger insurance trying to feed a family on minimum wage.

This is what the health-care “free market” looks like to the uninsured. The fact of insurance has made the basic services unaffordable. Rather than dealing with the problem in any substantial way, the Affordable Care Act simply allows more people to jump on the treadmill.

There is no “Obamacare,” there is merely “Obamasurance,” which does almost nothing that its opponents fear, or its proponents hope, it will do. It does not create state-run hospitals or government physicians. It does not require anybody to change insurers or even to purchase insurance (though it does tax the uninsured for the emergency care that they are likely to require at society’s expense). It doesn’t even provide free health care for anybody at the expense of the taxpayer.

The Affordable Care Act simply allows 30 million more people to experience the joy of copays, deductibles, and managed care as they, like the rest of us, try to get basic health care at the outrageous prices that our none-too-efficient model has created.

It is a minor repair to a major problem. Let’s stop pretending that it will either save, or destroy, the world.