10 Reasons Obamacare Is a Failure


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Obamacare, officially known as the Affordable Care Act, has not achieved its goal of providing affordable health insurance to almost every American, and is unlikely ever to do so. Here are 10 reasons why:

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Public Opposition

Obamacare has never been well-received by the public. Polls have been especially brutal, with over 95 percent of polls taken since the passage of the bill showing strong opposition during the Obama administration (usually by double-digit margins) over those who approved of it. Proponents of the bill knew it was unpopular at the time it passed and believed it would "grow" on people over time. That didn't happen until Republicans gained control of the House, Senate, and the White House in 2017. Polls took a turn as Republicans began to work on repealing the ACA. Although a majority favored the ACA by mid-2017, significant opposition remained.

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Costs Continued to Rise

One of the central claims made by proponents was that insurance premiums would go down for buyers. Instead, the law actually forced plans to cover more and more services. And that's not counting the taxes and fees passed on to consumers. It doesn't take a trained economist to know that raising minimum requirements of coverage, forcing more coverage, raising taxes, forcing high-risk patients into pooled plans, and reducing options would raise costs.

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Too Many Loopholes

One of the problems with a bill written by lobbyists and bureaucrats that was over 1,000 pages long, passed by people who never read it, is that there will probably be a loophole or two. States and businesses found those loopholes and took advantage of them to avoid being negatively impacted. Employers cut back hours or reduced staff to avoid hitting certain requirements. States opted out of the state exchanges for the federal exchange. Those loopholes have completely halted many of the core goals of the bill, adding to the general failure of Obamacare.

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Leaves 31 Million Uninsured by 2023

Originally, the bill was touted as a means to both cover the uninsured (either through subsidies or by "forcing" people who could afford insurance to buy it) and help reduce costs for everyone. The Obama administration downplayed the impact the bill had on people, instead, regularly implying that 90 percent of people would not be impacted by the bill outside of the increased coverage required. But the original goal of insuring all the uninsured could never be met.

The Congressional Budget Office projected that by 2023—more than a decade after implementation—that 31 million people would still be uninsured. This would be the case even with subsidies being provided to help the poor, and the IRS enforcing forced-purchase laws. This number was revised in 2017 to project 28 million without insurance by 2026. However, that was almost half the number who were projected to be without insurance under the Republican-proposed alternative at that time.

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Costs Projected Above Initial Estimates

The Obama administration framed the ACA as a program with a price tag below the magic $1 trillion mark. The CBO initially scored the bill as costing $900 billion over the first decade. In order to get the bill under $1 trillion, taxes that would never be implemented and cuts that would never be made were added. Other reductions in the cost of the bill were made on rosy expectations of reducing costs and cutting waste.

But most importantly, the bill was framed as only costing that $900 billion over a decade, which included four years before most of the provisions were implemented. In 2014, CBO figures projected the cost of the first decade of Obamacare at closer to $1.8 trillion. While Republican-proposed replacements in 2017 decreased that number, savings were often offset by half due to decreased taxes, while leaving over 20 million more people uninsured.

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The Program Is Run by the Government

Conservatives prefer market-based solutions to health care. They believe that real people making real decisions are always better than government bureaucrats in charge of those decisions. When consumers make choices, providers are more likely to offer better services at lower costs. When bureaucrats make those decisions, there is more waste and high cost. Further, people should simply be allowed choices about their own health care since it not only affects their well-being but sometimes their continued existence.

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States Reject the Bill

One of the "loopholes" damaging to the implementation of Obamacare is the ability of states to refuse to set up a state health insurance exchange and instead leave it up to the federal government to run them. Over half of states have chosen not to run a state exchange. While the federal government attempted to persuade states to create them with the promise of huge financial support, states with a conservative majority realized that the long-term costs would be unsustainable and the federal government would still be dictating everything.

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Inability to Alter the Bill

When Obamacare was initially passed, Democrats had full control of both chambers of Congress. Republicans couldn't stop anything, but their cooperation was needed to make fixes. Some conservatives favored not fixing it and letting it fail. But when Republicans gained power in both chambers and the White House, they struggled to find an acceptable replacement rather than amending the bill and it essentially remained in its original form.

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True "Benefits" Remain Unclear

Many Americans feel like they are paying more but getting less for it due to rising premiums. They may have had to leave plans with more coverage in order to afford any plan at all. And until 2019, they would have risked an IRS fine if they dropped coverage. But a 2017 Republican tax reform bill reduced the fine for not having coverage to $0 in 2019, effectively ending the law's "individual mandate." Some states, however, still require the individual mandate and issue a fine for not having health insurance.

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Negative Employee Repurcussions

In order to escape the heavy hand of government, businesses have been forced to find ways to avoid being negatively impacted by the law. They have dropped full-time employees to part-time status, stopped hiring altogether, and scrapped plans for expansion. Not only does this hurt the overall employment market, but employees are being impacted with fewer hours. Furthermore, those employees still not getting employer-provided insurance, but now they are earning less money overall, making it more difficult to purchase insurance themselves.

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Your Citation
Hawkins, Marcus. "10 Reasons Obamacare Is a Failure." ThoughtCo, Aug. 29, 2020, thoughtco.com/reasons-obamacare-is-and-will-continue-to-be-a-failure-3303662. Hawkins, Marcus. (2020, August 29). 10 Reasons Obamacare Is a Failure. Retrieved from https://www.thoughtco.com/reasons-obamacare-is-and-will-continue-to-be-a-failure-3303662 Hawkins, Marcus. "10 Reasons Obamacare Is a Failure." ThoughtCo. https://www.thoughtco.com/reasons-obamacare-is-and-will-continue-to-be-a-failure-3303662 (accessed July 28, 2021).