The Election Became a Referendum on Obamacare

Joel Zinberg is the one who finally said it: Obamacare was the precipitating event that flipped undecided voters to Trump. It’s a surprising claim because it’s such a seemingly mundane topic compared with the swirl of apocryphal interpretations of the outcome.

But the significance of this issue is undeniable. The nation’s system of healthcare delivery experienced an accelerated dissolution during an election year, profoundly affecting the lives of everyone but the very rich. Even if you knew nothing else about the campaign or the candidates, you would have to predict that this would have major repercussions.

If you take away reliable access to health services, you fundamentally destabilize the quality of life itself.Hillary Clinton not only defended the existing system that most everyone in real life hates, she took credit for it in interviews before the campaign, pointing out that Obamacare was once called Hillarycare. At this point in the timeline, this was a bit like taking credit for the Zika virus. She behaved as if she were oblivious to problems while Trump promised repeal in speech after speech, ad after ad.

The word “healthcare” sounds like a wonky policy issue that is interesting only to pundits and professionals. But in real life, it is as important a subject as whether or not you have the money in the bank to pay the rent or put food on the table. It hits you right where you live, literally.

Life and Death

Everyone is aging. Everyone gets sick. Everyone needs to see the doctor from time to time.  That requires some kind of stable system of healthcare delivery. This is right up there with food, clothing, and shelter. If you take away reliable access to health services, you fundamentally destabilize the quality of life itself.

That Obama and Clinton and the gang thought they could cobble together one system for the whole of America – using good intentions, tape, gum, mandates, and tons of government force, all with zero bipartisan cooperation – betrays an amazing arrogance. They have paid the price for it.

Five years ago or so, prior to the Affordable Care Act, we had an imperfect system, and the cost increases were getting out of control, particularly for drugs. Still, there was some predictability. But after Obamacare went into effect, the whole thing blew up in a state of chaos and uncertainty. People’s experiences with it differ depending on a huge range of issues. But generally, the result was disaster.

Last August, I wrote that this program might be the welfare state’s requiem. Everything went wrong from day one to the present. The worst of it – huge premium increases, collapsing insurers, clogged exchanges, soaring deductibles – all happened in an election year. Even in the week before the election, the announcement came that premiums would rise again, between 25% and 90% – a fact which Trump emphasized in every speech and in ads running all over the country.

In my own case, I recall getting a notice within days after the program went into effect that my premiums would go up to hilariously intolerable levels. I don’t recall the specifics but it looked like a typo. Clearly the insurer was trying to kick me off. So I joined millions in immediately losing the coverage I had. Getting new coverage required navigating a labyrinthine system of confusion and chaos. It hasn’t been the same since.

The new system punched every middle-class person in this country right where it hurt the most.And that was only the beginning. The collapse of the health-insurance system accelerated from there. There were ever fewer choices as ever more insurers went belly up. Even if you were insured, you had no way of knowing whether your doctor or hospital would accept your provider, since no one could force them to. You had no way of forcing the insurer to actually cover what it said it would cover on paper, and the demands for documentation grew and grew within the sole purpose of paying for as little as possible.

Millions of people suddenly lived in a state of extreme anxiety. A doctor’s visit could mean a $40 bill or devastating bankruptcy. Even if you faced no healthcare issues, the fear that you might was enough to keep you up at night. The new system punched every middle-class person in this country right where it hurt the most.

All polls showed this to be an incredibly bad system, and it was one that Hillary refused to admit had failed. All she could do was congratulate herself for fighting so long and hard for it. Talk about blind. It approached sheer cruelty when in the debates she dismissed all concerns. As I watched debate after debate, her answers on this topic, more than any other, were chilling and breathtaking.

Occam’s Razor

What about all the other concerns of the election, from globalism to race to foreign policy to women’s rights, and so on? Let’s invoke the principle of Occam's Razor (named for medieval logician William of Occam). It is as follows: "Among competing hypotheses, the one with the fewest assumptions should be selected."

Given this, it makes sense to adopt this assumption to explain the outcome of this election: people hate Obamacare. In the swing states that determined the outcome, it was the thing that turned passive voters into active voters, Democrats into Republicans, and independents into Trump voters.

Look at Wisconsin, for example – a largely blue state that shocked everyone by going for Trump. The exit polls show no greater consensus on any issue than the question of whether Obamacare went too far. Only 17% said it was fine as is. Fully 45% of those surveyed after the vote said that it had gone too far. Among that 45%, 81% voted for Trump. That alone was enough to turn Wisconsin from blue to red and provide a turning point in the electoral count.

A June 2016 survey by the Kaiser Family Foundation demonstrated the scope of the problem. The number of people who rated their health insurance as “not so good” or “poor” increased from 20% to 31% between 2015 and 2016. People who rated their service as “good” or “excellent” fell by the same amount. And this was just this past summer. The problems dramatically worsened in the fall.

Bill Clinton’s Warning

Ironically, it was the ever-astute Bill Clinton who issued the most salient warning a month before the vote:

"So you've got this crazy system where all of a sudden 25 million more people have healthcare and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It's the craziest thing in the world.”

The next day, he walked back his comments and they were immediately buried.

Obamacare was Obama’s biggest domestic initiative for the last eight years. In the long sweep of the rise of the welfare state in the 20th century, it was a relatively small-scale reform. But right now, the sweep of history doesn’t matter. This program had all the smart people behind it, all the resources, all the power, all the promotion from the media. And it flopped, and it destroyed people’s confidence in something that is at the core of their lives.

This was a verdict on a failed system of healthcare delivery, and a verdict on the paradigm that created itAnd that loss of confidence translated into a generalized incredulity toward everything the Democratic nominee said. If she couldn’t be truthful about what had happened to her beloved program, if she couldn’t sympathize at all with the problems people were facing as a result of a program she had dedicated a large part of her professional life to bringing about, why should she be trusted with the presidency? It’s an excellent question. It is easy to see how this dynamic could turn into an actionable resentment against a distant and elite ruling class that cared nothing for the real-life concerns of average people. This proved Trump’s narrative.

So yes, the pundits will offer sweeping and apocryphal interpretations of this election. But a much plainer and more human reaction is to deploy Occam’s razor. This was a verdict on a failed system of healthcare delivery, and a verdict on the paradigm that created it.

What Next?

Is there something structurally different about medical services that make them unlike anything else, such that government must rule their delivery?Hating a bad system and punishing its champion is easy enough. Much harder is fixing the problem: the most popular aspects of the program are also the very reason for the least popular aspects of the program. This explains why Trump already backed down from his hard promise to repeal, and is instead talking about amending the existing law. And this happened only four days after he had made repeal a centerpiece of his speech in Michigan, another state that swung his way.

The months and years ahead are going to be all about an endless stream of confusing proposals, complexities, and regulatory tweaks. People need to ask themselves a simple question: why is it that our access to and pricing of food, clothing, car rides, home repairs, auto insurance, and every manner of digital service, have improved vastly in the last decade, while healthcare has become ever worse?

Is there something structurally different about medical services that make them unlike anything else, such that government must rule their delivery? No. If you put the service in the hands of government to manage, you subject a judgement on its merits to the democratic process. 

The truth is unavoidable: the only path toward fixing this problem is through ever less government and ever more market competition.