The nation was held hostage in the 43-day government shutdown over Obamacare, with Democrats shrieking that people would die without continued government subsidies. Yet the Affordable Care Act (ACA) is siphoning federal dollars like a bureaucratic sinkhole and appears to be as unsustainable as a Ponzi scheme. Rep. Gwen Moore (D-WI) has essentially declared it beyond salvage. Here’s why.
Obamacare on Life Support
Moore, who has been in Congress for two decades, supported the passage of the ACA in 2010. However, in a recent interview on Bloomberg’s Balance of Power, she announced, “It looks like Obamacare is on life support right now.” She merits credit for the integrity to be honest: “People have had these healthcare plans, as it were, that barely cost anything, had high deductibles, didn’t provide any health care at all.”
Obamacare was peddled to the American people as an equitable pathway to provide healthcare more widely to American workers. The plan was supposed to be self-funded, but funding mechanisms that hurt small businesses and mandated insurance fell by the political wayside. Obamacare spending rose from $57 billion in 2019 to an estimated $125 billion in 2024. Increased healthcare costs outpace gross domestic product (GDP) in most years, and spending is far higher than in most developed nations.
Bloat is the biggest drain. Administrative personnel accounted for 27% of the healthcare workforce in 1993, an increase of 40% over 1968. Between 1980 and the advent of Obamacare in 2010, administrative costs, as a percentage of total healthcare spending, more than doubled. The CDC estimated that the current annual expenditures amount to $4.9 trillion, 90% of which is used for people with chronic and mental health conditions. The Congressional Budget Office (CBO) calculated that the 2023 federal subsidies for health insurance hit $1.8 trillion (7% of GDP) and projected an increase to $3.3 trillion (8.3% of GDP) in 2033. It concluded, “Over the 2024–2033 period, the 10 years spanned by CBO’s current baseline projections, those subsidies total $25.0 trillion.”
Burdening the Poor and the Taxpayer
While costs skyrocket and compound the national debt crisis, there is no evidence that the misnomered “Affordable” Care Act has improved health outcomes. More people are covered, but by a more expensive insurance that rewards bureaucrats financially while sapping the economy and burdening Americans with enormous deductibles. The Kaiser Family Foundation reported the average deductible in 2024 for plans sold via Healthcare.gov: “$7,258 for Bronze plans, $5,241 for Silver plans, $1,430 for Gold plans, and $97 for Platinum plans.” High co-pays also deter many struggling Americans from securing available insurance or from going to the doctor when necessary – hardly a way to improve health outcomes and hardly affordable when the average national monthly ACA plan without premium tax credits was $477 for one person in 2024.
Democrats are rightly concerned that taxpayers will balk without an extension of federal support for these premiums, but that Band-Aid won’t stanch the economic bloodflow or shore up the systemic flaws.
In an NPR interview on Oct. 30, Dr. Ezekiel Emanuel, regarded as one of the “architects” of the ACA, conceded that Obamacare has not delivered. He described the “incredibly complicated” labyrinth of the US healthcare system, admitting, “[F]rankly, the affordable care added to that complication by putting in the exchanges.” Emanuel then observed:
“We allowed these high-deductible plans so that even people who have insurance are dissuaded from going to the doctor 'cause they're worried about the cost. We have high co-pay so that, again, even if you're insured, you can actually be spending out-of-pocket expenses of thousands and thousands of dollars and go bankrupt.
“We are spending 17.5% of our GDP. We have a completely inefficient health care system. We can afford it. We spend more by $1.5 trillion than any other country on health care. We could afford it. We have way too much administrative costs— $1 trillion. So I think there's a lot we could do to actually streamline the system, save money and use it to cover people.”
Off the Fiscal Cliff
While the vaunted Obamacare plan has proved to be a disaster, the Democratic prescription is to put more money into it. Emanuel criticized insurance companies for applying different rates for the same service, remarking, “Talk about creating all sorts of gaming opportunities for people to make money even though they're not providing better care.”
Social justice activists constantly claim the problem is capitalism and that ever-higher taxes on “mythological” billionaires will solve the problems of healthcare. This may be a pathway to wasting more money instead of abandoning a broken experiment. A 2021 McKinsey report determined that “administrative spending could be reduced by up to $265 billion annually without compromising care quality.” A 2020 study found that Canada spent $551 in administrative costs in its single-payer system compared to $2,497 in the United States.
Moore may have been right when she identified the fallacies in Obamacare. As Democrats posture to make additional funding of this bureaucratic money pit a key election issue, there seems to be no effort to repair their broken machinations. If Obama’s promises are no longer believable, perhaps it’s time to pull the plug and seek other solutions.
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