Obamacare is in trouble, and its problems are poised to disrupt the 2016 presidential race.
Not only will the law’s mounting problems play a role in both the Democratic and Republican primaries, but complications surrounding the law are likely to explode into the public view next summer, just as the general election is beginning.
As with anything related to healthcare policy, the issues facing Obamacare are complex. But the simplest way of describing what’s going on is: Not enough young and healthy individuals have been signing up for coverage to offset the costs of covering older and sicker patients with expensive medical claims.
Insurers have been hiking premiums and slashing provider networks in an attempt to respond to the burgeoning costs. The administration has slashed its enrollment projections. And UnitedHealth Group, the nation’s largest insurer, announced that it was losing $425 million from participating in Obamacare and could exit the program, because such losses are unsustainable past 2016.
Growing concerns about the viability of Obamacare are likely to get increased attention as the Republican field narrows.
So far, the debate over Obamacare has been muted in the Republican primary, both by the dominance of Donald Trump and by the fact that the most outspoken proponent of an Obamacare alternative in the Republican presidential field, Gov. Bobby Jindal, R-La., was forced to drop out of the race after failing to gain traction.
But the legacy Jindal leaves behind could have an impact. While he was in the race, Jindal attacked the types of ideas proposed by Gov. Jeb Bush and Sen. Marco Rubio as nothing more as “Obamacare lite” because they call for using tax credits to help individuals purchase insurance. Because tax credits are available to individuals regardless of their tax burden, they’re effectively government spending beyond a certain point.
Though Jindal has now dropped out of the race, it’s possible that Sen. Ted Cruz could adopt this line of attack. It was telling that in the statement he released on news that Jindal was suspending his campaign, Cruz observed that Jindal’s plan for “repealing and replacing Obamacare helped set an important standard among the Republican field.”
It would be quite easy for Cruz, who has not released a detailed Obamacare alternative, to simply dust off Jindal’s (which relies on a standard tax deduction rather than a credit) and use it as a bludgeon against Bush and Rubio. Given his larger following and rhetorical skills, Cruz’s argument is likely to command more attention than Jindal’s did.
Rubio, perhaps anticipating that Cruz may attempt to hit him from the right on Obamacare, has already started highlighting his leadership role in preventing a multi-billion dollar taxpayer bailout of Obamacare insurers.
On the Democratic side, the nomination battle isn’t seriously in doubt. But there’s an important ideological contrast between socialist Sen. Bernie Sanders and Hillary Clinton, which was apparent in the last Democratic debate. Clinton largely embraced Obamacare as a pragmatic step toward universal healthcare on which she wanted to build.
But liberals will see any failure of Obamacare as evidence that for-profit healthcare is inherently problematic, because private insurers are driven by quarterly earnings expectations of Wall Street investors. Thus, as Obamacare’s insurers run into trouble, many liberals are likely to migrate toward Sanders vision for a single-payer type system in which government fully guarantees coverage. That may not affect the outcome of the nomination battle, but it could help define the health policy debate on the Left for the next decade.
Once the general election comes around, Obamacare threatens to be a drag on Clinton. Though Democrats keep waiting for that day when calling for the repeal of Obamacare is a political liability, that day has not yet come. And as problems with the program grow, and the law begins to look more vulnerable, Obamacare will play into the hands of Republicans just as it did in 2010 and 2014. In 2012, when Republicans nominated an early architect of Obamacare, the issue was effectively neutralized in the general election.
Especially troubling for Clinton is that it will be the middle of 2016 when insurers will have to begin making decisions about the 2017 policy year. If current trends continue, the news will be dominated by stories of insurers hiking premiums, cutting choices of doctors and perhaps exiting the health exchanges altogether. Suddenly, Clinton’s promise to “build on” Obamacare will become a major liability.
