David R. Henderson  

Did Republicans Sabotage Obamacare Implementation?

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We show that personal experiences with the Aff ordable Care Act informed voting behavior and that these effects could have altered the election outcome in pivotal states, suggesting that Republican eff orts to undermine the law's implementation paid tangible political dividends.
This is from the abstract in "Did Obamacare Implementation Cost Clinton the 2016 Election?" by Vladimir Kogan and Thomas J. Wood.

I hadn't been aware that Republicans had tried to undermine the law's implementation. So I read the paper to see what Kogan and Wood had in mind. In reading the paper, I found that they went even further with their language. Note this statement:

Nevertheless, exchange enrollees appear to have held the Democratic Party primarily responsible, suggesting that intentional eff orts by Republicans to sabotage the implementation of the health care law paid tangible political dividends among this constituency (but not, apparently, among the broader electorate).

Sabotage? Wow. That's pretty strong language.

Finally I got to the evidence of their undermining and sabotage:

In addition, although the health care law was identified most prominently with the Obama administration, Republican leaders made a number of critical decisions that aff ected enrollment trends and contributed to the rising premiums. In a number of states, for example, Republican officials used state consumer protection laws to impose onerous licensing and certi fication requirements on "navigators"--enrollment counselors funded by the Aff ordable Care Act to help individuals apply for insurance. Many states also refused to move policies previously purchased on the individual market--overwhelmingly by healthier consumers--to the exchanges to improve the overall risk pool and reduce average premiums for the plans sold there. Most Republican-controlled states also opted out of the Medicaid expansion, after a Supreme Court ruling made participation voluntary. In addition, the Obama administration put forward a variety of proposals designed to stabilize the exchanges and reduce premiums of plans sold there--including further standardization of plan o fferings, getting express congressional approval for cost-sharing reductions designed to reduce out-of-pocket costs for lower-income enrollees, and increasing federal funding for "risk corridors" designed to protect insurers against higher-than-expected actuarial losses that received little support (or even consideration) from the Republican congressional majority.

So let's consider these claims one by one.
Republican officials used state consumer protection laws to impose onerous licensing and certi fication requirements on "navigators--enrollment counselors funded by the Aff ordable Care Act to help individuals apply for insurance.

That is sabotage. Shame on those Republicans. Score one for Kogan and Wood. And Kogan and Wood's emotive language suggests that they think there was something wrong with that. Good for them. I hope to see them come out against other onerous licensing and certification requirements in other occupations. It's a target-rich environment.
Many states also refused to move policies previously purchased on the individual market--overwhelmingly by healthier consumers--to the exchanges to improve the overall risk pool and reduce average premiums for the plans sold there.

This is hard to categorize because the authors don't tell us enough. Was there a legal requirement that these state governments move those policies to the exchanges? (Doing so by the way, would hurt those healthier consumers.) If so, then that policy was sabotage. If not, then it wasn't.
Most Republican-controlled states also opted out of the Medicaid expansion, after a Supreme Court ruling made participation voluntary.

This was clearly not sabotage. The authors themselves admit that participation was voluntary. Taking advantage of a policy that's voluntary is not sabotaging that policy.
In addition, the Obama administration put forward a variety of proposals designed to stabilize the exchanges and reduce premiums of plans sold there--including further standardization of plan o fferings, getting express congressional approval for cost-sharing reductions designed to reduce out-of-pocket costs for lower-income enrollees, and increasing federal funding for "risk corridors" designed to protect insurers against higher-than-expected actuarial losses that received little support (or even consideration) from the Republican congressional majority.

In other words, Obama wanted to supplement Obamacare with more subsidies and Republicans refused. Refusing to support supplementation of a law is not sabotage of that law.

HT2 Tyler Cowen.


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COMMENTS (22 to date)
Dan writes:

So.. in other words, yes sabotage? Maybe with a helping of constituent-spiting choices that were, while voluntary (I'm not sure why something being voluntary makes it not-sabotage, but... ok?) were chosen with the intention to reduce the perceived success of the law?

It sounds like the authors identified some things that were sabotage and some things that weren't. Maybe you're missing a final paragraph where you agree that on net they have identified that there was in fact sabotage. Or are you suggesting that for the purpose of evaluating their overall claim, that being judged wrong on a couple points counts as "anti-sabotage" to cancel out the positive sabotage?

David R Henderson writes:

@Dan,
So.. in other words, yes sabotage?
Yes, on that one item that I identified as such. No on the others.
I'm not sure why something being voluntary makes it not-sabotage, but... ok?
I am.
It sounds like the authors identified some things that were sabotage and some things that weren't.
No. They identified one thing that was sabotage and other things that weren’t, but they called them all sabotage.
Maybe you're missing a final paragraph where you agree that on net they have identified that there was in fact sabotage.
No. No final paragraph needed. I parsed it, identifying one thing as sabotage and the others not.
Or are you suggesting that for the purpose of evaluating their overall claim, that being judged wrong on a couple points counts as "anti-sabotage" to cancel out the positive sabotage?
No. As I said in this comment and in the post, one item was sabotage. The others were not.

Jason writes:

I don't understand your point about voluntary acts not being sabotage either. Surely it was also voluntary to enact "licensing and certi fication requirements" ?

Joe writes:

I ask my brother to co-sign for my Maserati loan. My brother declines and tells me my Maserati purchase is unwise. I buy the car. A year later I can’t make the payments. My brother declines to give me money to make the payments, and the car is repossessed.

My brother sabotaged my Maserati.

KenB writes:

The problem with calling even the first item "sabotage" is that it's just assuming that all these decisions by various state officials were done expressly to dampen enrollment.

Unsurprisingly, these officials provided public justifications for their actions that are superficially plausible, so the assertion that their true intention in every case was to hurt the program depends on some uncharitable mind-reading. It would be nice to see some sort of actual evidence for the claim.

pyroseed13 writes:

Maybe I am missing something, but it was never clear to me how states refusing to expand their Medicaid programs was tantamount to "sabotaging Obamacare." The problem with Obamacare lies in the individual market, where enrollment on the exchanges of young health people has been low. What does this have to do with Medicaid? The lack enrollment on the exchanges actually has a relatively simple cause: The penalty for not obtaining insurance just wasn't high enough. Again, what does this have to do with Republicans?

Overall, it is a very partisan research abstract and I am surprised it was even published with such strong language.

David R Henderson writes:

@Jason,
I don't understand your point about voluntary acts not being sabotage either. Surely it was also voluntary to enact "licensing and certi fication requirements" ?
Here’s why. Obamacare, actually the Patient Protection and Affordable Care Act, is a law. It gives states the power to expand Medicaid. A number of states chose not to. So far, that’s consistent with the law. So it’s hard to say that it sabotages the law or undercuts the law for state governments to exercise that power to decide. It is true that SCOTUS found, by a 7-2 vote, that the feds couldn’t penalize the states by withholding all their Medicaid matching funds for states that did not expand. But then that’s part of the law too.
Yes, it was voluntary on the states’ part to enact licensing and certification requirements. And, as KenB suggests below, I am going a little far in attributing the sabotage motive. But I think it’s not a big stretch.

David R Henderson writes:

@Joe,
Great analogy.
@pyroseed13,
Maybe I am missing something, but it was never clear to me how states refusing to expand their Medicaid programs was tantamount to "sabotaging Obamacare." The problem with Obamacare lies in the individual market, where enrollment on the exchanges of young health people has been low. What does this have to do with Medicaid? The lack enrollment on the exchanges actually has a relatively simple cause: The penalty for not obtaining insurance just wasn't high enough. Again, what does this have to do with Republicans?
Good points.
Overall, it is a very partisan research abstract and I am surprised it was even published with such strong language.
It hasn’t been published. It’s a working paper. If I were a referee of it, and if I found that the data and methodology were sound, I would recommend publishing but only if they made their language more accurate.

Vivian Darkbloom writes:

"Many states also refused to move policies previously purchased on the individual market--overwhelmingly by healthier consumers--to the exchanges to improve the overall risk pool and reduce average premiums for the plans sold there."

The support for this statement is referenced at footnote 7 and leads to an LA Times article by Noam Levy, who also uses the term "sabotage" in the course of that piece. His article is mainly based on anecdote, not scholarly analysis. He writes, in part:

"State insurance regulators were to phase out health plans that insurers had been offering before 2014, thereby moving those policyholders into the marketplaces. These customers were overwhelmingly healthy because prior to 2014 insurers in most states largely didn’t sell plans to people with preexisting medical conditions."

So, the claim is that by moving primarily healthy people who had earlier purchased policies on the open market to the exchanges, the *average premiums on the exchanges* would be lower. Well, that should be no surprise. But, what would have happened to the premiums of those healthy folks *forced* onto the exchange to subsidize the less healthy in that new pool? For a relevant pre- and post-Obamacare comparison the average premiums of those healthy folks (and their financial welfare) should also be calculated *before the move* and compared with their premiums *after the move*, not merely lumped in with a (hypothetical) post-move exchange pool in order to support a hypothetical and unsupported conclusion that everyone would have, on average, been better off.

Where did I hear the selling point before that bill was passed "If you like your health insurance policy you can keep it"?

The overall tenor of all the arguments these authors present could as well be accurately summarized as "Republicans failed to bail out the bill", not sabotage it.

The Democratic party passed Obamacare on a partisan basis with the slimmest of margins and without a single Republican vote. In several respects the implementation of the bill failed because 1) the bill was ill-designed; and 2) it depended on voluntary non-partisan implementation, including major design "fixes" proposed subsequently by the bill's partisan sponsors (also a design flaw). The bill was expected to "buy" (how easy it is to use charged language!) major political support for Democrats due to the massive government subsidies ("free stuff") given to voters and potential voters. This effort failed because in several respects Republican controlled states didn't play along. Voters blamed Democrats for the fiasco, in part because they rationally concluded, despite all the "free stuff", that there is no such thing as a "free lunch". Maybe those voters were not acting irrationally after all.


Alan Goldhammer writes:

@Vivian Darkbloom - the issue between policies purchased on the exchange and off the exchange is complicated. I helped each of my daughters negotiate how to purchase the right health insurance when they were independent contractors and did not have an employer who could help "subsidize" the policy. Both of them did not go onto the exchange to shop around as they knew ahead of time which plans had the most providers in plan. Both Aetna and Carefirst BC/BS (metro Washington DC) had Obamacare color coded insurance products on their websites and that's how each daughter shopped for the right policy that met their needs.

These purchases of compliant policies won't be averaged in to what you mention yet they are part of Obamacare in terms of meeting all of the regulatory requirements. They just are not purchased on the exchange. A number of my daughters friends who were also doing independent consulting did the same thing. All these kids made too much money to qualify for any subsidies so there was no need to go to the exchange.

This is often overlooked in evaluating the impact of Obamacare.

LD Bottorff writes:

Another obvious question; were the onerous licensing and certi fication requirements really any less onerous in Democrat controlled states?

Vivian Darkbloom writes:

@Alan Goldhammer

I don't think you are following the point---simply, if healthy people who had purchased policies prior to Obamacare are forced into the exchange in order to subsidize and lower the premiums for the less healthy, the former are almost certainly doing so at a cost to themselves. The authors count the "savings" to the subsidized exchange policyholders, but do not consider the cost to those who they argue should have been forced to subsidize those less healthy in the exchange pool. And, the failure to play along with this forced re-distribution is called "sabotage"!

David R Henderson writes:

@LD Bottorf,
Another obvious question; were the onerous licensing and certi fication requirements really any less onerous in Democrat controlled states?
Very good question.
It appears that the answer is yes. See this link that the authors of the study provide. The state governments that did this appear to be mainly Republican ones.

Robert Simmons writes:

I think the Medicaid non-expansion as sabotage argument is that non-expansion was chosen so as to hurt how Obamacare looked, not because it was in the best interests of the citizens of those states (perhaps in a prisoner's dilemma kind of way). Not sure I agree with that view, but it's arguable.

Kent Lyon writes:

David Henderson, and the authors he is parsing, don't mention that the subsidies to insurance companies for risk corridors were, by the ACA, budget neutral and were to be funded by the insurance companies writing policies under Obamacare, but the available funds (transferred from profitable companies, to be disbursed to unprofitable companies) were insufficient, as there were more unprofitable than profitable companies, yet the Obama administration illegally paid monies to non profitable companies and ignored the law. Republicans simply passed a bill that re-iterated the ACA and refused to provide inappropriate funding under the risk corridor system to unprofitable companies, thereby saving Taxpayers money and implementing the ACA as written. Why doesn't anyone mention that the Obama administration violated the ACA in order to pay off insurance companies illegally? No seems to have any concern on this site for anything resembling rule of law. Or accuracy. Obama tried to sabotage the taxpayers to (illegally) subsidize the disastrous system he put in place.

Alan Goldhammer writes:

@Vivian Darkbloom - Perhaps we are both misreading one another. My point is that there is nothing that forced anyone into the exchanges. The chief purpose of the exchange was two fold: to make it easier for consumers to comparison shop and to judge whether the person qualified for a subsidy. As with my daughters and some of their friends who were independent contractors at the time, nothing forced any of them into the exchange. There was no point as they all were making too much money to qualify for a subsidy. Since they all knew pretty much what company they wanted to insure with they did not have to worry about comparison shopping either.

The insurance companies had to offer compliant policies whether or not one purchased it through the exchange. If you are a 25 year old female it didn't matter in terms of whether it was exchange purchased or not; the premiums were the same as were the policies (I checked with both of my kids).

David R Henderson writes:

@Kent Lyon,
David Henderson, and the authors he is parsing, don't mention that the subsidies to insurance companies for risk corridors were, by the ACA, budget neutral and were to be funded by the insurance companies writing policies under Obamacare, but the available funds (transferred from profitable companies, to be disbursed to unprofitable companies) were insufficient, as there were more unprofitable than profitable companies, yet the Obama administration illegally paid monies to non profitable companies and ignored the law.
Good point. In short, it was Obama who sabotaged the law.
Republicans simply passed a bill that re-iterated the ACA and refused to provide inappropriate funding under the risk corridor system to unprofitable companies, thereby saving Taxpayers money and implementing the ACA as written.
Again, a good point. So it was the Republicans who defended the law.
Why doesn't anyone mention that the Obama administration violated the ACA in order to pay off insurance companies illegally?
I can answer only for myself. I simply forgot about it. And I do thank you for pointing it out.
No [one] seems to have any concern on this site for anything resembling rule of law.
I think you’re going too far here, Kent. I blew it in this one case, but I have deep respect for the rule of law.

KenB writes:
risk corridors were, by the ACA, budget neutral

My (layman's) understanding is that the ACA itself didn't specify that this process would be budget-neutral, but Congress didn't appropriate any money for this as part of the original legislation because the expectation was that there would be plenty of money from successful plans to cover the losers.
So, it wasn't so much the ACA as the Constitution itself that was violated by the Obama administration's payments to plans.

Weir writes:

"PRESIDENT TRUMP on Thursday signed an executive order directing his administration to ramp up its sabotage campaign against the Affordable Care Act, also known as Obamacare, also known as the health-care law without which millions of needy people would lack coverage."

That was written by the editorial board of the Washington Post, October 12th.

I think that journalists, along with Senator McCaskill of Missouri and Senator Murphy of Connecticut, and scholars like Kogan and Wood could all benefit from a fuller understanding of the traditional distinction between "sabotage" and "wrecking."

Sabotage is defined as the non-execution or poor execution of one's duties. But if you are guilty of wrecking, on the other hand, it's because you have deliberately inflicted damage to, for example, the Soviet census of 1937, or the 1928 Five Year Plan.

Memo to the editorial board of the Washington Post and everyone else: The word you're looking for is wrecking, not sabotage.

David R Henderson writes:

@Weir,
Wow! I thought you had made up that quote from WaPo. I see that you didn’t.

Kent Lyon writes:

"I think you're going too far, here, Kent..."
Yes, generally out of utter frustration that currently our government seems to be, yes, sabotaging the rule of law, with malice aforethought, and I'm a bit obsessed with that idea.
For example, I was somewhat unfair to Democrats in my post. Actually, the bill that Republicans passed to block subsidies to insurance companies via risk corridors was passed with a lot of Democrat votes, and Obama signed the bill, since it looked very bad politically to be using taxpayer money to subsidize big insurance companies. That goes against the fundamental ethos of the Democratic Party. Yet, after the bill was passed and signed, Obama kept paying the illegal subsidies. But not only did Obama keep paying the subsidies, Donald Trump also kept paying the illegal subsidies!!!! He did make threats to stop the illegal subsidies, and I believe those illegal subsidies have now been stopped, but both parties postured on the issue, and both Democrat and Republican administrations behaved illegally in paying the subsidies.
One can make a good case (Philip Hamburger does so in his small book on administrative law, "The Administrative Threat") that the entirety of our administrative state is unconstitutional. And that administrative state was strongly abetted by a supposedly Conservative Justice, Antonin Scalia, with his "Chevron Deference" that essentially gave CarteBlanche to the unconstitutional administrative state. So, yes, I believe that the rule of law in America today is honored pretty much only in the breach, by just about everyone. But that's just my opinion. I could be wrong, as Dr. Henderson points out.

Phil writes:

Much of what WaPo was upset about was Trump's decision not to continue the unconstitutional spending of taxpayer funds that the Obama administration engaged in, per KenB's post. Not only did Congress ask GAO whether the Obama administration was spending illegally (the Comptroller General said he was), the House of Representations took Obama to court and the federal judge said the payments were illegal. Stopping the unconstitutional and illegal spending of tax dollars is not sabotage in my book. (Some of the other antics...well....)

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