The ObamaCare Death Spiral and Idea Democrats Forced the ACA Through are Myths
Published - March 24, 2017
Last Updated - July 12, 2017
Busting the Myths Used to Support TrumpCare and Dismiss ObamaCare
The idea of an ObamaCare Death spiral is essentially a myth, so is the idea that Democrats forced the ACA through without Republican input.[cite]Kaiser Family Foundation: Individual Insurance Market Performance in Early 2017.[/cite]
- Consider, the ACA is based on RomneyCare, and Romney/Ryan ran vs. Obama/Biden in 2012 (after the ACA was passed and lost). The thing we call “TrumpCare” is Ryan’s plan from 2012, which is pretty much ObamaCare with less coverage for low-income individuals along with tax breaks for the rich.
- Meanwhile, Trump was elected in January and was trying to pass TrumpCare without any input as early as March. In contrast, Obama was elected for the first time in 2008. The plans for healthcare he sponsored weren’t signed into law until March 2010 after a full year of debates, and many changes spurred on by Republicans.
The whole narrative Republicans are weaving is false, but what do we expect from a party who just spent 6 years obstructing the ACA and trying to break it?
FACT: Insurance premiums are actually stabilizing under the Affordable Care Act (ObamaCare) in general. Meanwhile, some of the increases that are occurring this year are due to instability under the Trump administration. See proof at the Kaiser Family Foundation: Individual Insurance Market Performance in Early 2017, or simply consider the excerpt of the report below. Learn more from our breakdown of the report.
“Early results from 2017 suggest the individual market is stabilizing and insurers in this market are regaining profitability. Insurer financial results show no sign of a market collapse.
While the market on average is stabilizing, there remain some areas of the country that are more fragile. In addition, policy uncertainty has the potential to destabilize the individual market generally. Mixed signals from the Administration and Congress as to whether cost sharing subsidy payments will continue or whether the individual mandate will be enforced have led to some insurers to leave the market or request larger premium increases than they would otherwise. A few parts of the country may now be at risk of having no insurer on exchange, though new entrants or expanding insurers have moved in to cover most areas previously thought to be at risk of being bare.” – KFF.org.
TIP: Donald Trump claimed that “One-third of counties have only one insurer on Affordable Care Act exchanges.” This is true, but it is, in part, because most problems exist in rural Republican counties that tried to “break ObamaCare” by not supporting the program. Medicaid expansion, the exchanges, and those who would qualify for assistance have all suffered under a GOP strategy to “starve the beast” and “break the Affordable Care Act.” Their idea was that their voters would suffer and then blame their problems on Obama; it worked.
Trump and Ryan keep saying ObamaCare is in a “death spiral,” but outside of the GOP blocking key provisions, the ACA is working well.
Likewise, the idea that Democrats shoved the ACA down the GOP’s throat is mostly false. Democrats and Republicans worked together for a full year before they passed the law. The ACA has problems, but the versions of these stories that the Republicans are pushing are inaccurate.
TIP: There was a health care crisis before ObamaCare. ObamaCare did a lot to curb the crisis, but not everything was perfect. Still, Republicans spent 8 years making things worse rather than fixing them.
The Death Spiral Myth
The idea that ObamaCare is in a “death spiral” is demonstrably false. See the Urban Institute Report that shows it works better in states that embraced the program and has slowed cost increases in those states. It is harder to summarize the complexity of the situation than it is to say “death spiral.” However, facts show that “while increases suggest higher-than-expected utilization of services and claims costs, overall, premium increases are still modest by historical standards.” Meanwhile, insurers have already responded to rate hikes, and projected rates are not expected to continue to spike under the ACA unless a deliberate effort is “made to break the Affordable Care Act.”
Instead of ObamaCare causing a death spiral, what happened is the Republicans consistently obstructed the Affordable Care Act, blocking Medicaid expansion and the exchanges in GOP run states. The effect of this is it made premium increases (which are real) seem even more dramatic than they were. Likewise, our poorest in rural Republican states are barred from enjoying the benefits of the ACA and Medicaid, and they thus get the impression that “ObamaCare isn’t working.”
Some of this has merit, but much of this is part of a failed Republican strategy that tried to “Break ObamaCare” and “Starve the Beast” to turn Republicans against it so they could swoop in and appear to save the day. Google it.
The “failed” part of the strategy isn’t the first part of the tactic; that part worked!
The “failed” part was Trump promising the moon on the campaign trial and then Ryan presenting him with a lack-luster version of his Better Way plan from his Romney/Ryan days. In other words, with the American Health Care Act (TrumpCare), the Republicans squandered an opportunity to make their strategy work. You can call the ACA ObamaCare and then break it and make your base hate it, but replacing it with something even worse isn’t going to work. First, conservatives who are paying attention don’t like it. Second, the 60 plus million liberals hate it. Third, few people are going to like it because it is essentially a handout for the rich.
It isn’t all bad. There are a few great provisions in there. It is just that it is so much worse than the ACA and creates so many sticking points that it is sure to backfire.
The fact is, the ACA is working well in states that embraced the program. The GOP-led states are bringing down the national average by trying to break the program. Now they are in power, they had an opportunity to craft a solid plan and make it work, but they put business as usual on the table and failed. At any point. The two parties could start working together to make a great plan. The American people deserve that.
See: Starve the Beast: The Republican Plan to De-Fund the Health Care Law (from Fox News). This is one of many stories that show that I’m telling the truth and the rhetoric of the Republican Party is misleading.
The Myth That ObamaCare Was Forced Through Congress
Obama was elected in 2008; he was reelected in 2012. The Affordable Care Act was signed into law by President Barack Obama on March 23, 2010. From 2008 to 2010 continuing discussions on healthcare took place between liberals and conservatives. See legislative history of the ACA. Conservatives in the Democratic and Republican Party both picked apart the law.
Not only that but by Obama’s admission, the plan was drawn from Romneycare, the Massachusetts plan championed by then-Governor Mitt Romney. This means Obama’s team created a liberal version of the Republican Romney/Ryan plan in the first place.
A fix is one thing, but RyanCare/TrumpCare doesn’t fix anything. It gets rid of the mandate, helps the 400% – 600% (which is great), but otherwise just blows smoke and hopes the working class and seniors won’t notice.
Learn more about the difference between ObamaCare and TrumpCare.
See The Real Story of Obamacare’s Birth. One reason for the continued resistance to the Affordable Care Act is a badly distorted narrative of how it became law.