Obamacare, Jobs, and ‘What Matters Politically’

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I read the news today, oh boy.Photo: Bill Clark/CQ Roll Call/Getty Images

Imagine that the United States had a national health-care system in place for long enough that it was no longer the subject of frenetic controversy – suppose four decades ago, Richard Nixon, or two decades ago, Bill Clinton, had managed to pass their proposed health-care reform. Now imagine a new president just proposed to eliminate that system and replace it with the one that has existed in the United States until January 1 of this year. Then suppose the Congressional Budget Office analyzed the effect of this plan on the labor market, using the exact same assumptions employed in yesterday’s report, but in reverse. Would it be good news for that plan? Would the firestorm of terrible headlines about Obamacare killing jobs that dominated the actual news yesterday be, in this imagined world, a heavenly chorus of hallelujahs?

The administration that proposed this plan would certainly have some scraps of good news to cling to. There would be a pretty major influx of labor, and the administration would pitch this as “two million new jobs!” (CBO’s report has been described as predicting Obamacare will decrease employment by two million jobs, but it actually says the equivalent of two million full-time jobs – 40 people working one fewer hour a week adds up to one full-time job.) There would be more people working, more economic output, and more national wealth. Hooray!

But opponents of the law would counter that repealing national health insurance would not create two million new job openings. Rather, it would force (the equivalent of) two million workers to go to work, or to work longer hours, in order to get health insurance. The way this plan would work is that millions of workers who are able to afford health insurance outside of getting it through their job would lose it.

A dystopian world in which Nixoncare has been abolished and uninsured people line up for free charity dental care.Photo: Ricky Carioti/The Washington Post/Getty Images

Suddenly desperate and at risk of losing access to medical care for themselves or their families, they would find options like working part-time or staying home to raise their children or running their own business to be impossibly expensive or risky. They would flock to any job they could get that came with insurance as a benefit. The influx of new workers, without any corresponding increase in demand for labor, would decrease wages. Many workers would become less productive because the need to get employer-sponsored insurance would force them into a job that didn’t match their skills.

You’re free to question the assumptions I’ve just laid out here. But I’m not making this up. I’m merely describing the assumptions of the CBO’s report – the one celebrated by conservatives yesterday — in reverse.

In our hypothetical world, I don’t think the release of this reverse-CBO report would be good political news for the administration proposing to repeal national health insurance. I think it would be a political disaster. Reporters would flock to tell the stories of victims like John, the engineer who saved enough to retire at 59 years old, but has a heart condition and is losing access to individual insurance and has to find a job with benefits until he’s eligible for Medicare, or Mary, a 27-year-old mother who can no longer raise her children at home because her husband’s small business lacks affordable insurance.

Keep in mind that I’m focusing only on the narrow labor-market effects of repealing national health insurance. Obviously, if an administration proposed repealing Nixoncare or Clintoncare and replacing it with what we’ve had instead, any news about the labor market would be drowned out by the effect on insurance (“CBO: Administration Plan Would Create 25 Million Uninsured.”) It is also telling that the fact that the news that CBO is projecting Obamacare to insure 25 million people — that the exchanges will enroll six million new customers, that the whole plan is basically working, and that the CBO sees no evidence of the collapse scenarios that so obsessed everybody just a few weeks ago – has been reduced to a footnote in the news coverage.

Okay, fine, we'll stop trying to change stuff.Photo: Jewel Samad/AFP/Getty Images

Loss aversion is one of the most elemental forces in American politics.  People get far more angry at the possible harm from any change than any corresponding excitement that can be mustered. Loss aversion shaped the entire structure of the Affordable Care Act, which was designed to create the fewest possible losers while fulfilling the basic goals of health-care reform. Loss aversion is so deeply embedded into the psychology of our political system that reporters have internalized it thoroughly. Even reporters who were perfectly aware of the nuances of CBO’s findings were writing passages like: “There’s a lot more fine print about what those numbers really mean, and whether the jobs were 'lost.' But what matters politically is how they’ll look in attack ads.”

A world in which “what matters” is how a fact can be spun into attack ads is a world in which the status quo is the only safe course of political action. If we flipped the burden of proof – if the downside from repealing Obamacare received the proportionate attention that the downside of enacting it has brought – then repeal would be a catastrophe on a scale that would dwarf the damage the new law has incurred. That would be a world in which the Republican health-care agenda would be as politically dangerous as, say, privatized Social Security, a flat tax, or other utopian schemes moldering on the shelves of right-wing think-tanks.

But here is the flip side – and I will delve into this soon: This is also the world we are soon entering.