It’s Time to Acknowledge Reality: Obamacare is Working Pretty Well


A new paper concludes that “rate shock” under Obamacare has been generally more modest than we thought:

Using data from the Current Population Survey, we find that the average prices increased by 14 to 28 percent, with similar changes in California and the federal exchange states; we attribute the increase primarily to higher premiums in exchanges associated with insurer expectations of a higher risk population being enrolled.

This doesn’t take into account federal subsidies, which would lower this number even further. What’s more, rates most likely would have gone up about 10 percent even if Obamacare had never existed. Taken together, this suggests that the average premium increase thanks to Obamacare has been very small. And of course, that small increase buys you a policy that in most cases is considerably more robust than older policies.

In related news, HHS reports that people who qualify for tax credits are paying an average of $82 per month for their policies. This is roughly a fourth of what they’d pay without subsidies. The chart on the right shows how this breaks down: more than two-thirds of those who qualify for subsidies are paying less than $100 per month. Fewer than 20 percent are paying more than $150. In a nutshell, then, we now know that (a) the system works, (b) enrollment targets were largely met, and (c) health insurance under Obamacare is pretty affordable. Matt Yglesias explains what this means:

[These] three factors together should end the phony war over Obamacare and let the real debate begin — not the debate over whether the program “works” but the debate over whether economic resources should be devoted to providing health insurance to people at the bottom of the income distribution or to providing tax cuts to people at the top.

….[Obamacare] is a large-scale effort to improve living standards for people in the bottom half of the income distribution by giving them additional economic resources. One of America’s political parties doesn’t like that idea in any non-health context and they don’t like it for health care either. They think the money it costs to provide those subsidies should be taken away, and it should be given to high-income households in the form of tax cuts.

This is an excellent and important policy debate to have. One of the great ideological issues not just of our time and place, but of democratic politics across eras and countries. Should economic resources be distributed more equally or less equally?

Yep. It’s time to stop arguing over minutiae. Fundamentally, Obamacare “works.” It’s not perfect, but after nine months we can now say that it does indeed provide health coverage to the poor and the working-class in a reasonably efficient manner, and it does this largely by a combination of taxing and/or reducing payments to the relatively well off.

I think this is a good idea. Republicans don’t. But this, rather than the cacophony of nonsense we’ve been subjected to over the past several years, is what we should be arguing about.

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate