Democrats Against Reform
by Paul Krugman - New York Times
It’s easy to understand why Republicans wish health reform had never happened, and are now hoping that the Supreme Court will abandon its principles and undermine the law. But it’s more puzzling — and disturbing — when Democrats like Charles Schumer, senator from New York, declare that the Obama administration’s signature achievement was a mistake.
In a minute I’ll take on Mr. Schumer’s recent remarks. But first, an update on Obamacare — not the politics, but the actual policy, which continues to rack up remarkable (and largely unreported) successes.
Earlier this week, the independent Urban Institute released new estimates of the number of Americans without health insurance, and the positive results of Obamacare’s first year are striking. Remember all those claims that more people would lose coverage than would gain it? Well, the institute finds a sharp drop in the number of uninsured adults, with more than 10 million people gaining coverage since last year. This is in line with what multiple other estimates show. The primary goal of health reform, to give Americans access to the health care they need, is very much on track.
And while some of the policies offered under Obamacare don’t offer as much protection as we might like, a huge majority of the newly insured are pleased with their coverage, according to a recent Gallup poll.
What about costs? There were many predictions of soaring premiums. But health reform’s efforts to create meaningful competition among insurers are working better than almost anyone (myself included) expected. Premiums for 2014 came in well below expectations, and independent estimates show a very modest increase — 4 percent or less — for average premiums in 2015.
In short, if you think of Obamacare as a policy intended to improve American lives, it’s going really well. Yet it has not, of course, been a political winner for Democrats. Which brings us to Mr. Schumer.
The Schumer critique — he certainly isn’t the first to say these things, but he is the most prominent Democrat to say them — calls health reform a mistake because it only benefits a minority of Americans, and that’s not enough to win elections. What President Obama should have done, claims Mr. Schumer, was focus on improving the economy as a whole.
This is deeply wrongheaded in at least three ways.
Obamacare and the Middle Class
Few truly appreciate the enormous economic benefits the Affordable Care Act will deliver to the American people over time, the middle class included. But you'd expect New York's seasoned Democratic senator, Charles Schumer, to "get it" rather than belittle the 2010 federal health care law as a political inconvenience for his party.
Amazingly, Schumer recently complained that reforms affected only "a small percentage of the electorate." Has he any idea what's going on -- I mean beyond the calculations of the most recent election, the planning for the next?
A time-honored way to freak out the middle class is to call a government program a plan to "redistribute" income to the less fortunate. Obamacare's foes never miss the chance. Schumer plays into that narrative.
Anytime you help people obtain benefits they couldn't afford before, money is going to move. There is redistribution all around us, in Social Security, in Medicare, in farm subsidies, in the tax code.
George W. Bush and a Republican Congress pushed through a Medicare drug benefit for which the poor paid almost nothing and richer beneficiaries paid more. And because these modest sums funded little of the program, almost the entire cost was shifted to the taxpayers. The Medicare drug benefit was redistribution big-time.
There is indeed some redistribution in Obamacare. When you include the value of health coverage, the reforms boost income in the bottom fifth of earners by at least 6 percent, according to The Brookings Institution. This number would have been higher had 23 states not rejected the law's offer to cover more of the working poor under Medicaid.
Whose income is being sent to the less wealthy? Those in the top three-quarters, Brookings says, though their income loss is proportionally quite small.
Bear in mind that government subsidies are available to folks earning up to 400 percent of the federal poverty level. That means the help goes well into the middle class.
The soaring cost of medical coverage deserves much blame for today's stagnant wages as employers take it out of workers' paychecks. The Affordable Care Act is already credited with starting to curb the rise in health care spending. It stands to reason that companies will eventually pass some of the savings on to their employees.
The health reforms redistribute a lot more than money. They expand peace of mind and freedom to start a business.
Knowing that an insurer can't drop your family when a member gets ill is priceless. Under the old regime, even the well-to-do couldn't get coverage if someone had a pre-existing condition.
And there's the redistribution of opportunity. Many Americans not cushioned by wealth nevertheless dream of founding their own company. They continue working for others rather than lose their family's health benefits. We call this "job lock." Offer them dependable, affordable health coverage and many will take off, leaving job openings for newcomers.
Amazingly, Schumer recently complained that reforms affected only "a small percentage of the electorate." Has he any idea what's going on -- I mean beyond the calculations of the most recent election, the planning for the next?
Anytime you help people obtain benefits they couldn't afford before, money is going to move. There is redistribution all around us, in Social Security, in Medicare, in farm subsidies, in the tax code.
George W. Bush and a Republican Congress pushed through a Medicare drug benefit for which the poor paid almost nothing and richer beneficiaries paid more. And because these modest sums funded little of the program, almost the entire cost was shifted to the taxpayers. The Medicare drug benefit was redistribution big-time.
There is indeed some redistribution in Obamacare. When you include the value of health coverage, the reforms boost income in the bottom fifth of earners by at least 6 percent, according to The Brookings Institution. This number would have been higher had 23 states not rejected the law's offer to cover more of the working poor under Medicaid.
Whose income is being sent to the less wealthy? Those in the top three-quarters, Brookings says, though their income loss is proportionally quite small.
Bear in mind that government subsidies are available to folks earning up to 400 percent of the federal poverty level. That means the help goes well into the middle class.
The soaring cost of medical coverage deserves much blame for today's stagnant wages as employers take it out of workers' paychecks. The Affordable Care Act is already credited with starting to curb the rise in health care spending. It stands to reason that companies will eventually pass some of the savings on to their employees.
The health reforms redistribute a lot more than money. They expand peace of mind and freedom to start a business.
Knowing that an insurer can't drop your family when a member gets ill is priceless. Under the old regime, even the well-to-do couldn't get coverage if someone had a pre-existing condition.
And there's the redistribution of opportunity. Many Americans not cushioned by wealth nevertheless dream of founding their own company. They continue working for others rather than lose their family's health benefits. We call this "job lock." Offer them dependable, affordable health coverage and many will take off, leaving job openings for newcomers.
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