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  • Obamacare’s Collapse: History Repeating Itself?

    As the disastrous Obamacare rollout continues to frustrate and anger more and more Americans, some analysts are noticing the striking similarities between Obamacare and the failure of another massive piece of social policy legislation, the Medicare Catastrophic Coverage Act (MCCA).

    Carl Hulse of The New York Times argues that the fate of the MCCA is a cautionary tale for Obamacare:

    It illustrates the political and policy hazards of presenting sweeping health system changes to consumers who might not be prepared for them. And it provides a rare example of lawmakers who were willing to jettison a big piece of social policy legislation when the political risks became too grave.

    Heritage Senior Fellow Robert Moffit first called attention to the similarities between the MCCA and the Affordable Care Act (ACA) in 2010, right after the latter’s enactment. As Moffit pointed out the 1989 repeal of the MCCA and the 1994 failure of the Clinton Health Plan were both caused by widespread public backlash as a result of major problems plaguing pieces of legislation—which Moffit warned then were also issues with Obamacare—namely:

    • Massive disruption to the existing coverage of millions of Americans. The MCCA “compelled senior citizens to pay for a drug benefit that many of them did not want through a special ‘supplemental premium’ that was, in fact, a tax.” The Clinton Plan, too, would have overhauled the coverage of all Americans. And contrary to President Obama’s repeated promises, millions of Americans in the individual market have already lost their coverage due to Obamacare with many more in the employer market likely to lose theirs as well.
    • Higher health care costs. The Congressional Budget Office (CBO) misjudged the costs of the MCCA and “the projected cost of the Medicare drug benefit doubled within 12 months.” In the case of the Clinton Plan, the CBO projected that instead of controlling costs; as Clinton promised, it would balloon the deficit. While the CBO still projects that Obamacare will reduce the deficit, its projection relies on a wide variety of budget gimmicks, including the infamous double-counted Medicare “savings” of $716 billion over 10 years. Meanwhile, health care costs continue to climb in spite of President Obama’s promise to cut the average family’s premium by up to $2,500.
    • Clumsy implementation by a massive bureaucracy. The MCCA forced federal officials to “undertake a challenging set of complex administrative tasks.” So, too, did the Clinton plan. And in the case of Obamacare, Moffit warned in 2010, “[t]he new law will give birth to a regulatory regime, involving the rapid imposition of reams of red tape over the next few years, unlike anything Americans have ever experienced.” If the website’s glitches are any indication of the consequence of bureaucratic control, Americans haven’t seen anything yet.

    Obamacare is a debacle and, unfortunately for millions of Americans losing coverage or watching their health care costs skyrocket, Moffit’s 2010 analysis is proving true. But, looking at the failed history of other health care overhauls, it appears what was a “done deal” in 2010 could very well still unravel.

    obamacare-alternative

    Lou Phillips is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.

    See: The American People Rose Up to Repeal a Health Care Law Once Before. They Can Do It Again.

    Posted in Capitol Hill, Front Page, Obamacare [slideshow_deploy]

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