Better consumer incentives
I take the legal view that the founding compact was explicitly intended to prevent a federal Leviathan; and I take the policy view that the Constitution is correct, in that the European social model is bad policy on a number of levels: incentive structure; equity; private property; national character; economic growth; the benefits of free market competition. That’s for another blog. Now to the politics of Obamacare.
The central political debate today between left and right is about the size and scope of the welfare state: do we want the US to adopt the European “social model”, or do we respect the idea of limited government? Democrats desire the European social model; Republicans want limited government. Obamacare is an expansion of the social welfare state, and thus the latest battle in this 100 year-old war.
Crudely put, the European social model creates political constituencies with subsidies, such that voters receiving such subsidies will vote for the party that dispenses them (see: France). Politically, Obamacare was conceived as another such subsidy: a way to add millions of new government dependents, and thus create another constituency for the Democratic Party.
The Democrats told middle class voters that Obamacare would reduce their healthcare costs and would be paid for by others: insurance companies, doctors, hospitals, and “the rich”. The Democrats saw saw Obamacare attracting many new Democratic voters--and so did the GOP. They were both wrong.
For any healthy voter who makes more than the subsidy cut-off, Obamacare will generally make health insurance more expensive (higher premiums, copays and deductibles). The electoral demographic which is going to have to pay more is not just the rich, but also the middle class, and the middle class has begun to discover this fact. For example, Anthem Blue Cross in California received a recent letter from a woman complaining about a 50% premium hike who wrote, “I was all for Obamacare until I found out I was paying for it”. She and many other voters thought Obamacare would be free to them, like an EBT card.
Juan Williams (FNC) was recently invited to the West Wing to discuss the Obamacare rollout. After the meeting he said: “What you hear from these senior officials is that they wish the insurance companies hadn't sent out the cancellation notices.” In other words, the senior officials were not aware that this was going to happen. That was a fatal blunder, particularly because so many Democratic congressmen and senators were told to repeat this falsehood. They got no heads up about the five million cancellations, which is why they (and Obama) are so angry at the policy munchkins.
As it has turned out in practice, everything fabulous that Nancy Pelosi expected and everything awful that Ted Cruz feared has not happened. Instead of creating a new constituency for the Democrats, Obamacare has revived the electoral prospects of the GOP.