The Plot to Kill Obamacare

Illustration by Kristian Hammerstad

The Republican party has voted unanimously against establishing the Affordable Care Act in the Senate and then in the House of Representatives, then voted some 40 times to repeal or cripple it; it has mounted a nearly successful campaign to nullify it through the courts and a failed presidential campaign that promised to repeal it; and it has used its control of state governments to block the law’s implementation across vast swaths of the country, at enormous economic cost to those states. Yet somehow, in the wake of all this, the party is consumed with the question Have we done enough to stop Obamacare?

This peculiar subject of introspection, as if Joe Francis were lying awake at night cursing himself for his prudery, reflects the deepening mix of terror and rage with which conservatives await the enrollment of millions of uninsured Americans beginning in October. On the substantive merits of the law, only the subtlest variations can be detected in the GOP’s evaluation. Mitch McConnell calls it the “single worst piece of legislation passed in the last 50 years in the country.” Representative John Fleming of Louisiana calls it “the most dangerous piece of legislation ever passed by a Congress” and “the most existential threat to our economy … since the Great Depression.” Virginia gubernatorial candidate Ken Cuccinelli harks back to the Fugitive Slave Acts for a comparative affront to liberty.

Having achieved near consensus on the policy, the party has fallen into intramural squabbling over which extraordinary threats to deploy. Shut down the government? Default on the national debt? (House leaders have wriggled out of demands to do the former by promising to do the latter.) Conservative activists have turned on their leaders as traitors for hesitating to employ the most obviously suicidal methods, affixing John Boehner’s name to the hated program (“Boehnercare”) or accusing McConnell of “empty rhetoric … about ending Obamacare.” These recriminations reprise the hallucinatory attacks by Cold War conservatives like Joe McCarthy and the John Birch Society, which over time migrated from their original targets onto such figures as President Eisenhower and the Army.

The historical echo is fitting in the sense that Obamacare has come to fill the place in the conservative psyche once occupied by communism and later by taxes: the main point of doctrinal agreement. (In constituent meetings, “this is the overriding issue that is being discussed,” one Republican member of Congress explained late last month. “Way more than immigration, way more than the debt.”) The transformation of Obamacare from a close relative of Republicans’ own health-care ideas to the locus of evil in modern life is owing to several things, including the almost tautological political fact that its success would be Obama’s: Permanent health-care reform would define Obama as a Reaganesque transformative figure, rather than the failure conservatives still hope him to be remembered as. The law’s slow rollout has made it a live issue, unlike the already-expired stimulus, and thus the main receptacle for simmering concerns over unemployment and the tepid economic recovery.

Most important, the law has, in its direct impact, opened a fissure over the role of government deeper than any since the New Deal. Obamacare threatens America’s unique status among advanced economies as a country where access to regular medical care is a privilege that generally must be earned. In a few weeks, the United States government, like those of France, or Australia, or Israel, will begin to regard health insurance as something to be handed out to one and all, however poor, lazy, or otherwise undeserving each recipient may be. “We can’t afford everything we do now, let alone provide free medical care to able-bodied adults,” as Missouri Republican Rob Schaaf, author of the state’s harsh anti-Obamacare initiative, put it. “I have a philosophical problem with doing that.”

The Obamacare wars have progressed from the legislative to the judicial to the electoral fronts, gaining intensity at every step. Now they move to a new battleground to secure the law and all it represents, or provoke its collapse. That an implementation battle is taking place at all is a highly unusual circumstance. Major new laws often stagger into operation with glitches, confusion, and hasty revisions, but not sabotage. Obamacare will come online in the midst of an unprecedented quasi-campaign atmosphere, with Republicans waging a desperate political and cultural war to destroy it.

The transformative potential of Obamacare is not a conservative hallucination. It is the resolution of a confounding dilemma decades in the making. The American health-care system is not merely the only one in the advanced world that’s closed off to a large share of the population; it’s also the most expensive by far. The normal structure of a public problem is that the worse the problem, the easier it is to solve—as traffic gets worse, more people support mass transit; the more soldiers die, the more pressure to end the war. American health care has long defied that dynamic. The worse the problem grows, the harder it has gotten to solve. The more waste and inefficiency that sprout through the medical system, the more of an interest doctors, hospitals, and pharmaceutical companies have in maintaining the status quo. The uninsured are diffuse and disorganized, unable to marshal any substantial political support, and the effect of their plight has largely been to make people with insurance fearful of any change lest they join them.

Illustration by Kristian Hammerstad

The Affordable Care Act broke through the policy trap by combining solutions to the cost-inflation problem with solutions to the access problem. The medical industry would undergo painful reforms, but in return Washington would supply it with some 25 million new customers.

At the time of its passage, the received wisdom in Washington (and not just among partisan Republicans) deemed Obamacare’s cost reforms pitifully inadequate. “This legislation was supposed to end that asphyxiating growth, which will crowd out investments in innovation, education, and everything else. It will not,” concluded David Brooks. “This bill is full of gimmicks designed to get a good score from the Congressional Budget Office.” The final, negative pronouncement from the professedly sympathetic pundit emblematized the widespread conclusion that Obamacare amounted to well-­intentioned but softhearted big-­government liberalism.

In the three years since, a steady accumulation of evidence has amassed to the contrary. Through a thousand tiny nudges, the law has transformed the entire medical field from one that encouraged more, and more expensive, care with no regard for outcome into one geared toward paying for quality. Some of the changes have been blunt and simple. The old pay-for-quantity system rewarded hospitals for doing a bad job, since patients who contracted an infection or received poor treatment would come back for more treatment, bringing in a second Medicare reimbursement. Obamacare created penalties for hospitals with high rates of infection or patient readmission. Lo and behold, this year, Medicare announced that its patient-readmission rates fell—“a feat that long seemed beyond reach,” the Washington Post reported.

Obamacare also imposed a tax on the most expensive insurance plans, and though the tax does not take effect until 2018, employers have already started shopping around to avoid its bite. “Companies hoping to avoid the tax,” reported the New York Times last spring, “are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care.”

The most dramatic change underfoot is an entrepreneurial wave encouraged in sundry ways by Obamacare. The law encourages the creation of Accountable Care Organizations—doctors who band together and get paid based on their patients’ medical outcomes rather than on how many tests and procedures they perform. As Bloomberg News reported in June, “Hospitals are improving care and saving millions of dollars with one of the least touted but potentially most effective provisions of the law.” Walgreens is making a huge investment in its own ACOs, and the consulting firm Accenture predicts the law will continue to prompt an explosion of walk-in clinics. The significant increase in doctors and hospitals converting to electronic medical records and other technological innovations has helped create “a new marketplace and platform for innovation—a health-care Silicon Valley,” as an awed Thomas Friedman reported.

All these reforms have added up to a revolution in modern medical economics. Health-care inflation since 2011 has fallen to its lowest level in half a century. The Congressional Budget Office estimates of Obamacare’s costs, widely derided at the time of its passage as too optimistic, have thus far proven too pessimistic. The agency has already cut $600 billion off the expected ten-year spending total for Medicare and Medicaid. If the reforms continue to bear fruit, costs will come in even lower.

And health experts increasingly expect the reforms will bear fruit. “The ongoing slowdown in the health-care growth rate defies historical post-­recession patterns and is likely to be ­sustained,” concluded Price­water­house­Coopers in June. “It appears that the reforms will stick and health-care exchanges and other policies will bring competitive pressure to markets,” says Randall Ellis, a professor of health-care economics. “Although the proof for this point of view is not yet definitive,” reports the Health Affairs blog, “the depth and breadth of change suggest that significant transformation in the nation’s delivery system is under way.” Among health-care wonks, this is no longer a controversial assertion: The evidence thus far suggests Obamacare’s cost reforms are a staggering success.

Now look back at all the quotes in the last paragraph. Every one of them has qualifiers attached: likely, appears, not yet definitive. That, appropriately, is how people in the worlds of academia and economic forecasting express themselves. The future is uncertain by definition.

No such analytic caution can be found on the right. Conservatives concluded from the outset not only that Obamacare’s goals offended them but that its operations were doomed to collapse. “Just as economic shortages were endemic to Soviet central planning,” wrote Weekly Standard editor Bill Kristol last month, “the coming Obamacare train wreck is endemic to big-government liberalism.”

That Obamacare is both bound to fail and must be destroyed is the premise of conservative-movement thought, the A=A from which every other conclusion springs. In 2010, the American Enterprise Institute fired David Frum after he wrote a blog post questioning the Republican strategy of total opposition to Obamacare. Fealty to the cause of repeal is a sine qua non for any effective participation in the movement. The e-mail ­listserv where conservative health-care-policy wonks gather is called the “Repeal Coalition”—which is to say, anybody not fully dedicated to repeal cannot ­participate in conservative health-care-policy deliberations.

Illustration by Kristian Hammerstad

Those few conservative intellectuals who seek to nudge the party toward the center on economics dance carefully around the Obamacare taboo. Ross Douthat urges Republicans to adopt other kinds of health-care reform to replace Obamacare but has never expressed an opinion as to whether Obama’s law actually improves upon the status quo—which, after all, is the only political choice that has come before Congress over the past three years. AEI’s James Pethokoukis, another reformist conservative, wrote a recent column that implicitly floated the heretical notion that the health exchanges might not fail; he carefully prefaced his argument with, “First a perfunctory ‘Obamacare delenda est.’ ”

The dominant intellectual figure within these restrictive intellectual confines is Yuval Levin, a Bush-­administration health-policy staffer, editor of National Affairs, frequent contributor to both National Review and the Weekly Standard, adviser to Paul Ryan, and a 2013 winner of the Bradley Prize, a $250,000 grant to conservative pundits. Among his conservative peers, Levin is best able to produce a ­credible-looking facsimile of social-­science methods, a skill for which he is regarded with a kind of awe on the right. (Levin, as the libertarian blogger Megan McArdle gushes, is “an ultrawonk who appears to have had the entire text of the PPACA tattooed on the inside of his eyelids for quick reference.”)

Through his channels of influence, Levin has beat the drum for repeal, relentlessly pounding home a narrative in which Obamacare is flailing and collapsing at every turn. The details of Levin’s indictment change and often contradict each other. As recently as March, he was insisting that health-care costs had only slowed because of the recession, taunting liberals for their “very implausible expectation” that the slowdown might continue and declaring that Obamacare would make costs grow faster. He has more recently taken up the line that the cost slowdown started years before and has nothing to do with Obamacare, neglecting to mention his insistence that Obamacare made any such slowdown impossible. The details of Levin’s indictment matter less than the fact that there are details at all. The bottom line never changes: Obamacare is a “disaster,” a “monstrosity,” a “calamity,” the “catastrophe is a function of the law’s very design,” and on and on.

The contrast between the cautiousness of mainstream health-policy analysts and the perfervid certainty of those on the right reprises what has become a common pattern in American political debate. Remember this time last fall, when pollsters, political scientists, and analysts like Nate Silver read the campaign data and guardedly declared Barack Obama the presidential front-runner, while a coterie of self-styled conservative public-opinion analysts and their allies crafted a counternarrative in which Mitt Romney was marching toward victory? That asymmetry of confidence lent the Republican arguments a vigor that masked their vaporousness. The imbalance fed upon itself. Conservatives assumed that the cautious evenhandedness of liberal analysts must signal some deeper uncertainty, which in turn made them bolder still. Ultimately, most political reporters got suckered into taking the contrived Romney-momentum story seriously.

To an even greater extent, the right has dominated the Obamacare public debate through blunt rhetorical force. Conservatives regard the law’s disintegration not as a probability or even a certainty but as something that is already occurring. Obamacare is a “broken, failed experiment,” declares Marco Rubio. “You’re now seeing the public collapse of Obamacare,” announces the Weekly ­Standard’s Stephen Hayes. “Every morning brings fresh news of terror: missing deadlines, programs running out of money, premiums set to soar, flailing technical implementation,” observes Wall Street Journal columnist Kimberley Strassel.

And it’s true: People who follow the progress of Obamacare through Fox News, the Drudge Report, and conservative talk radio have indeed witnessed an endless litany of incompetence, corruption, and clumsy bureaucratic attempts to hide the socialist horrors in store for America. The conservative Obamacare narrative has blown up small administrative glitches into epic bungling and utterly ignored the most important markers of progress. The crowning episode in this narrative was a hearing of the Senate Finance Committee last April, in which the chairman, Max Baucus, grilled Secretary of Health and Human Services Kathleen Sebelius. Baucus, a major author of Obamacare, expressed his fear that the administration had stripped out too much funding to publicize the law, leaving consumers without enough reliable information about how to participate. Conservatives seized on one of the characterizations Baucus used—“train wreck”—and turned it into the law’s defining catchphrase, just as “I am not a crook” was Richard Nixon’s. It was the juiciest slipup, the most telling admission—if even the law’s author admitted it would collapse, imagine how bad it must really be! In fact, Baucus was complaining not about the law’s design but about its meager advertising budget. But by the next month, the talking point had embedded itself so deeply that even such figures as Charlie Rose were asking, “Does everybody, in the words of Max Baucus, consider this a train wreck?”

Illustration by Kristian Hammerstad

The Obama administration has spent the last few months insisting that the trains will run, more or less on time. But it hasn’t managed to generate force behind its narrative. Liberal activists disappointed that reform didn’t produce a single-payer or public option never developed a passion for the law. The policy wonks who most closely share the administration’s worldview—analysts like Ezra Klein, Jonathan Cohn, and Sarah Kliff—have acted like real wonks, weighing the bad alongside the good, re-creating the Nate Silver–versus– imbalance of assuredness. Nobody can honestly argue the law is certain to succeed. You can’t honestly argue it’s certain to fail, either, but that hasn’t stopped some from doing so.

Just as in the 2012 campaign, the bad news, while often exaggerated, has been real enough. The administration has carried out its implementation in the face of unplanned adversity. The law allowed states to set up their own health-­insurance exchanges, and expected nearly all to do so, but provided for the federal government to step in for those that failed. Most red states decided to boycott, and the paradoxical result—Republican governors got a Washington-run system rather than one they created—was an acceptable price for maintaining the Obamacare boycott; it also created vastly more work for Sebelius and her department. The legal challenge likewise gave Republican states an excuse to put off any decision at all.

In the face of unexpectedly tight deadlines and shrinking budgets, Obamacare’s implementation has largely consisted of triage: identifying the essential pieces of the law and delaying or jettisoning everything else. Yet every trim or delay has produced more howls of outrage and more Obamacare-chaos coverage. Among the American public, the loyalists have dwindled to the most hard-core Democrats, with the softest supporters of the president increasingly joining the skeptical opposition. A Washington Post–ABC News poll found that the 74 percent of moderate and conservative Democrats who approved of the law at the time of its passage had shrunk to 46 percent by this summer. Another poll found that just since Obama’s reelection, overall Democratic approval for the law has dropped from 72 percent to 57 percent.

You might think that this all represents nothing more than another episode of conservative self-delusion of the sort that ended in a dumbfounded Mitt Romney campaign beholding the election returns last November and Karl Rove bleating helplessly at the Fox News decision desk. But unlike with the election, perception and reality cannot be so neatly separated. The final, decisive stage of the Obamacare wars is one in which perception can ­create its own reality. The predictions of a train wreck are intended to precipitate one.

On October 1, the most important piece of Obamacare, the health-insurance exchanges, will open up for customers. The exchanges are Obama’s answer, borrowed from Governor Mitt Romney, to the problem of the broken individual-health-insurance market. Insurers want to avoid getting stuck with sick customers, so they either screen out anybody with a high health risk, charge sky-high rates to those without a perfect health history, or impose conditions (like lifetime caps on what the insurer has to pay) that foist the costs onto consumers who need a lot of medical care. Because of that, the people who can get individual health insurance are the ones who need it least, most of them young and healthy. Historically, the only way for Americans to get decent health insurance is to have a job, since insurers will cover a whole company, where they can pool together all the employees, sick and healthy alike.

The exchanges will create a workable market for people who can’t get insurance through their job—at least in theory, and in practice in Massachusetts. The successful operation of the model in the Bay State suggests, at the very least, that the design of the program is not conceptually unworkable. And if it does work, it will be a lifeline for the millions of Americans locked out of the insurance market. Of course, their care isn’t free. The money to insure people too poor or sick to find insurance on their own will come from a combination of higher taxes on the rich, savings from Medicare, and getting young, healthy people to enroll in the system.

That vast transfer of wealth—from rich to poor, and from healthy to sick—is Obamacare’s most socially radical element, and it is that political transformation that has captured the attention of the right. Once uninsured Americans have a program that provides them access to medical care, the political system will no longer be able to disregard their plight. As conservative writer Byron York has put it, “Once those payments begin, repealing Obamacare will no longer be an abstract question of removing legislation not yet in effect. Instead, it will be a very real matter of taking money away from people. It’s very, very hard to do that.”

This explains conservatives’ frantic desire to destroy the exchanges before they come to life. The party’s internal disagreement about which threats Congress should use to halt the law have commanded most of the attention, but the steps the party already agrees upon are equally dramatic. Conservatives have identified the weak point of the exchanges: They require the young and healthy to sign up. If only older, sicker people enroll, the cost of insuring them will rise, causing premiums to go up, causing more healthy customers to drop out—a scenario the industry calls a “death spiral.” Any combination of adversity—mechanical problems with the websites, confusion or distrust of the law—could conceivably leave the exchanges with too few healthy customers, triggering a death spiral that, once under way, probably couldn’t be contained. If that happened, the law’s promise of creating a workable solution for the uninsured without disrupting the employer system would collapse. Obama­care’s remaining political support would fall out, and Democrats in Congress would be far less willing to block the GOP’s unrelenting legislative attacks.

The health-care industry does not expect a death spiral to occur. So far, seventeen states plus the District of Columbia have released the insurance plans on offer in their exchanges, and the premiums are significantly lower than the Congressional Budget Office had forecast. These are real bets being laid down by private companies with money on the line. They expect they will be able to attract a large enough base of customers, enough of them healthy, to charge low rates and still make a profit on the exchanges. The central question over the next few months is whether these companies have underestimated the tenacity of the Republican Party—whether conservatives can mount a campaign of sufficient ruthlessness that even private-sector experts with skin in the game will be surprised.

The right’s actuarial guerrilla war begins with the underlying reality that hardly anybody knows about the exchanges. Polls show that fewer than six in ten Americans even know the law still exists, with the remainder believing it’s been repealed or struck down, or unsure. Of those aware that the law remains in effect, few understand how it works. Yet to succeed, Obamacare requires a critical mass of uninsured Americans not only to grasp what the law does but to act on it.

Republicans in Congress have slashed implementation funding, forcing the Department of Health and Human ­Services to shift money around merely to keep the law afloat. (This was the source of Baucus’s “train wreck” complaint.) Obama has instead cast about for ways to publicize the exchanges without the assent of Congress. The administration planned to ask the NFL to participate in a public-awareness campaign, based on the Massachusetts campaign that used the Boston Red Sox to advertise that state’s exchanges. In June, Republican leaders fired off letters warning the NFL not to collaborate; the NFL acquiesced.

Obamacare antagonists have also zeroed in on “navigators”—consultants for churches or other charitable organizations, or for state governments, who help walk confused (mainly poor) people through the exchange application process. House Republicans have sent out sweeping demands for documentation to navigators nationwide (sample line: “This request also includes, but is not limited to, any documents provided by [or communications with] representatives from HHS, CMS, CCIIO, Enroll America, or any other entity including federal or state governments discussing individuals to target or solicit for enrollment under the PPACA including discussions or documents related to geographic area”). Numerous Republican-controlled states have imposed unnecessary licensing requirements on navigators who, after all, are not turning a profit. Two such navigator groups—Cincinnati Children’s Hospital Medical Center and West Virginia Parent Training and Information—quickly dropped out in response. You may be old enough to remember the long-ago days of this past May, when conservatives considered burdensome, politically motivated scrutiny emanating from Washington the starkest form of government tyranny.

The heart of the Obamacare resistance is a quasi-campaign to persuade the young and healthy to boycott the exchanges. In recent weeks, the conservative media has developed an obsession with the unfairness and economic drain the exchanges would allegedly impose upon the young and healthy. And it is true that young, healthy individuals who make too much money to qualify for federal tax credits will now have to pay somewhat more for insurance. They may find some consolation in the likelihood that they will one day find themselves no longer young and perfectly healthy, or perhaps sharing a family with somebody with serious medical needs, and thus poised to benefit from a system in which sickness or injury does not subject one to medical deprivation and financial ruin.

The strangest thing about conservatives’ fixation with unfairness is that the redistribution from the healthy to the sick that they decry is already a part of the employer insurance system. If you are a young, healthy person who gets insurance through work, you are getting docked the same amount of money as your older, actuarially more expensive colleagues. What conservatives have now elevated to a principle of the highest moral magnitude has been violated for decades, ignored until its discovery as a weapon against universal health insurance.

YG Network, a conservative advocacy group founded by former staffers for Eric Cantor, has started an anti-Obamacare advertising campaign targeting the young, having already placed a satirical ad on ­Saturday Night Live. Americans for Prosperity is considering setting up kiosks at Ultimate Fighting Championship matches and college-football games to warn attendees against joining the exchanges. FreedomWorks is promoting opportunities to “burn your Obamacare card”—which FreedomWorks is printing up for the purpose of burning—as a way of implanting the notion of forgoing insurance as an act of generational rebellion. Dean Clancy, the group’s public-policy director, tells Reuters, “We’re trying to make it socially acceptable to skip the exchange.”

Fortunately for Obama, this field of battle favors his side. To pass the law, he needed to win over skeptical senators. To defend it in court, he needed conservative jurists. But identifying and persuading young people is a battle Obama does not expect to lose to Republicans, and in place of the federal outreach funds, the administration is deploying a campaignlike array of weapons: microtargeting, including door-to-door outreach, and all forms of media. (A few weeks ago, Katy Perry tweeted out a link informing her 42 million followers that health care was available beginning October 1.) Obama has turned over much of his campaign fundraising apparatus to Enroll America, which is raising undisclosed millions to reach out to the uninsured.

It is hard to imagine that the news about Obamacare over the next few months will be good. The rollout of Medicare, and the addition of prescription-drug coverage under George W. Bush, both provoked mass confusion and complaint, and those laws were not fighting off an angry rearguard insurgency. The question is whether the glitches and failures amount, in either reality or perception, to the sort of catastrophic failure that leads panicked insurance companies, potential customers, governors, and state legislatures to pull out.

Conservatives have portrayed their war against the exchanges as a desperate last stand against Obamacare and for freedom as we know it. History is replete with previous examples of last stands. Ronald Reagan warned conservatives in 1961 that if Medicare passed into law, “one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.” The conservative movement sustains itself by constantly disregarding its warnings of the last mortal threat to liberty and redirecting itself onto the next one. Yet it has made opposition to Obamacare completely central to its identity. If the Obamacare train does not wreck—or, to put it more accurately, if conservatives fail to wreck the train—it will be fascinating to see: What will they do next?

The Plot to Kill Obamacare