ANALYSIS: TRUE. Obamacare Didn’t Fail Because It’s Timid.
Judging from my interactions with readers and my friends and family who don’t happen to spend their days marinating in health-care policy, the view that Obamacare’s problems are due to Democrats not being sufficiently left-wing, or dishonest, is pretty common on the left. That makes it worth refuting, because — with all due respect to Kevin [Drum] — it’s completely wrong.
I agree that higher subsidies and a stronger mandate would have made Obamacare less of a policy train wreck; we probably wouldn’t be so worried about a death spiral if they had passed. On the other hand, it would have made the program much more of a fiscal train wreck. Kevin suggests that they should have just raised taxes on the rich, but for reference, the total repeal of the Bush tax cuts was projected to raise only about two-thirds of the amount needed. And since they were projected to expire, that was not a source of revenue that Democrats could use to fund Obamacare.
Funding this extra entitlement by tapping the rich would have been, to put it mildly, unpopular with an important part of the Democratic base: urban professionals. They would have, in the course of a few years, seen about 10 percent of their gross income, and a considerably larger fraction of their take-home pay, vanish. Nor would they be excited when politicians came back to them for even more money to pay for little incidentals like our growing entitlement gap.
Nor, as Kevin suggests, could Democrats have simply hand-waved the cost away.
ObamaCare locked in the insurance-for-everything model, while adding on layer after layer of bureaucratic complexity on top of 51 uncompetitive insurance fiefdoms — then sold in part on “cost savings.”
It was never going to work, but even many of ObamaCare’s critics were surprise by how quickly that became apparent.