The Simple Question that Will Determine ObamaCare's Fate

 

By Byron York
WashingtonExaminer.com

The key to Obamacare's success or failure — provided the administration can actually learn to operate the system — is whether it helps more people than it hurts, or hurts more people than it helps. President Obama's promise — repeated as recently as this week — that the law will make the health care system "better for everybody" is clearly not true. What's not clear is how many people will reap the benefits of Obamacare's redistributive scheme.

There's some new information in a just-finished study by the pro-reform Kaiser Family Foundation, which estimates that 17 million people who are currently uninsured or who buy insurance on the individual market will be eligible for Obamacare's subsidies next year. That's a lot of people. But then Kaiser adds: "We also estimate that about 29 million people nationally could look to new marketplaces as a place to purchase coverage."

So, of 29 million people who might enter the Obamacare exchanges, about 17 million would be eligible for subsidies. That's about 59 percent who would be eligible for taxpayer-paid assistance, versus 41 percent who are not. That's a majority on the subsidy side, but not a huge one. Then figure that some of those who are eligible for help will only be eligible for very small subsidies. For example, a family of four in St. Louis, Mo., with one parent who earns $48,000 and another who earns $37,000 would be eligible for a subsidy -- all of $13 per year to pay for an $8,088 policy -- that is virtually no help at all. (The numbers come from the Kaiser Foundation's online subsidy calculator.)

Out of the 59 percent who are eligible for subsidies, then, some portion will receive subsidies that do not cover the increased cost of their new coverage. For them, Obamacare will be a net loss. So, it's unlikely Obamacare will actually help the full 59 percent of those eligible for subsidies by Kaiser's estimate. The bottom line is, Obamacare could very well hurt substantially more than 41 percent of the people who are currently uninsured or purchase coverage on the individual market. That's not exactly making the system work "better for everybody."

And that's not even beginning to consider the far larger number of people who receive their health coverage through work. If Obamacare means they pay more, either through work or being thrown by their employers into the exchanges, the help vs. hurt ratio could change considerably, and not in the president's favor.

Obamacare's future depends on those numbers. The program will not be politically viable if it hurts more people than it helps, and probably not even if it helps a few more than it hurts. If that turns out to be the case, there will be hell to pay politically for the president and his fellow Democrats, likely for a very long time.

This week, the liberal Washington Post blogger Greg Sargent wrote that "many experts believe the law will ultimately benefit significantly more people than it will hurt." Maybe that will happen. But right now, the numbers look very iffy.