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Why Obamacare Survived

Summary:
CAMBRIDGE – Since the United States’ Affordable Care Act (ACA) – or “Obamacare” – was enacted in 2010, Republicans have been promising to “repeal and replace” it. When the 2016 presidential and congressional elections delivered all three branches of the US government to the party, the time to fulfill that promise seemed to have arrived. Yet the anti-Obamacare crusade has just been dealt a crushing blow, owing to the refusal of some Republican senators to vote for the replacement legislation. Republicans blame their failure on the Democrats’ refusal to cooperate. But why should the Democrats help to dismantle their biggest legislative achievement of the last decade (if not longer)? The major flaws in Obamacare are not, as has been argued, unintended consequences of a

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CAMBRIDGE – Since the United States’ Affordable Care Act (ACA) – or “Obamacare” – was enacted in 2010, Republicans have been promising to “repeal and replace” it. When the 2016 presidential and congressional elections delivered all three branches of the US government to the party, the time to fulfill that promise seemed to have arrived. Yet the anti-Obamacare crusade has just been dealt a crushing blow, owing to the refusal of some Republican senators to vote for the replacement legislation.

Republicans blame their failure on the Democrats’ refusal to cooperate. But why should the Democrats help to dismantle their biggest legislative achievement of the last decade (if not longer)? The major flaws in Obamacare are not, as has been argued, unintended consequences of a poorly designed policy, which thus must be replaced; instead, they stem from Republican demands.

In any case, Republicans have majorities in both houses of Congress, so they don’t actually need the Democrats’ support to pass legislation. Likewise, President Donald Trump’s unprecedented lack of experience and general incompetence cannot be at fault, as he isn’t indispensible to the repeal and replace process.

The truth is that the blame belongs squarely on the shoulders of congressional Republicans. Since 2010, they voted more than 50 times to repeal the ACA. Those votes may have been merely symbolic, given Obama’s veto power; nonetheless, the striking fact remains that the Republicans never bothered to try to formulate an alternative in the event that one of their own would one day become president.

In fact, they couldn’t formulate a workable alternative to Obamacare, because some within their ranks refuse to accept the basic laws of arithmetic. According to the estimates produced by the Congressional Budget Office, which has a very good track record, the Republicans’ proposed health-care legislation would have caused more than 20 million Americans to lose insurance coverage. But many Republicans continue to insist that they can somehow slash spending and eliminate rules and requirements, including the “individual mandate” (the requirement that all Americans have health insurance) that underpins Obamacare, without affecting current coverage levels.

Of course, there are Republicans who acknowledge the facts. Some support repeal and replace anyway: Senator Rand Paul of Kentucky, for example, is a relatively consistent libertarian who believes that the benefits of minimizing the government’s role in health care somehow outweigh the costs to lower- and middle-income working Americans. Others recognize that the costs are unacceptable – indeed, that is why the Republican-proposed replacement has just been rejected – but have been unable to put forward any credible alternative.

Logically, there should be a third group of moderate Republicans who acknowledge the arithmetic, find it unacceptable, and commit either to reforming Obamacare or developing some other realistic plan that can deliver better health insurance to more Americans. Unfortunately, there is nobody left in this category,...

Jeffrey Frankel
Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

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