The Affordable Care Act we can’t afford

Many Catholics support “universal health care,” presumably wishing that no one be denied lifesaving (or more routine?) treatment because of a lack of money. The centuries-long history of Catholic hospitals is evidence of the Church heeding Christ’s call to care for the sick. When I read about the Good Samaritan picking up an assault victim and treating his wounds, though, I don’t usually think of failed websites, underpaid physicians, long lines, increasing government debt, and unemployment.

Yet, the current U.S. manifestation of “universal health care,” which has nonetheless received support from many prominent Catholics (sure, Sister Carol Keehan, but more orthodox folk as well), is Obamacare or the Affordable Care Act (ACA). Okay, perhaps some who advocate for universal health care mean something other than socialized, government-run medicine, but only someone well-versed in Catholic social thought would presume that the former is a distinct wider category than the latter. For the average person (and average voter) they’re synonymous. Which is why, whenever a criticism is offered of Obamacare, the critic is labeled heartless, in the pocket of Big Pharma, and contrary to eons of Catholic teaching.

So, with the understanding that I’ll be thusly labeled in the comments, let’s address the recent Congressional Budget Office (CBO) publication that made headlines last week for its prediction of an Obamacare-caused reduction in the labor force by 2.5 million people (I almost said workers, but the labor force includes entrepreneurs and business owners too, who deserve equal dignity to what the Church advocates for workers. They will likely be affected as well as employees). Rely if you will on the analysis of others about the effects of the ACA, but why not go to the horse’s mouth?

  • Spending on Medicare, Medicaid, CHIP, and “subsidies offered through health insurance exchanges and related spending” is expected to “grow rapidly in coming years because of changes mandated by the Affordable Care Act, reaching 6.1 percent of GDP in 2024 (being 5.1% of GDP in 2015, p.16).” The government will spend more on, and will thus need more tax revenue to fund, these programs.
  • The labor force participation rate (the percentage of the working-age population that is both willing and able to work) is expected to decline partly because of the aging population, but also “reduced incentives to work attributable to the ACA–with most of the impact arising from new subsidies for health insurance purchased through exchanges–will have a larger negative effect on participation.” Footnote 15 reads “By providing subsidies that decline with rising income (and increase with falling income) and by making some people financially better off, the ACA will create an incentive for some people to work less (p. 38).
  • CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked (p. 117).” So, low-wage workers will work and earn even less.
  • The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024. Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA. The decline in full-time-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours… The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week) (p.117-8).
  • In CBO’s view, the ACA’s effects on labor supply will stem mainly from the following provisions, roughly in order of importance: the subsidies for health insurance purchased through exchanges; the expansion of eligibility for Medicaid; the penalties on employers that decline to offer insurance; and the new taxes imposed on labor income (p. 118).”

Silver lining: that’s 2.5 million more golfers.

More quotes could be had. It’s no surprise to economists that socialized medicine, where buyers do not bear the full cost of treatment, results in distorted incentives. Of course, the current system of employer-provided health insurance has bad incentives of its own, mainly due to 1) health benefits being an untaxed form of compensation, which pushes people to buy insurance through their employer rather than like they do car insurance, and 2) the evolution of health insurance from covering only catastrophic or very costly procedures to covering virtually any procedure, no matter how inexpensive. When “insurance pays for it,” buyers overconsume.

But, those faults of the current system are easy enough to fix. They certainly do not warrant an overhaul creating a system of bureaucracy, top-down management, and manufactured shortages.

I’m curious if Catholics who support “universal health care” (lay or religious) are supportive of the ACA’s incentives which reduce people’s willingness to work. Is it charitable to support a program that encourages dependence on a (shrinking) group of workers? If the contraception mandate ever gets modified to our liking, will that pave the way for Catholic support of Obamacare, even if it pushes millions out of work? Is “universal health care” a goal that should be pursued even if it forces the country to go bankrupt? For as much as I get chastised for not respecting the Church’s high opinion of labor and work (because I consider managers, entrepreneurs, and CEOs to be people too), I find it odd that many Catholics support the latest manifestation of socialized medicine that unsurprisingly reduces the incentive to work.

15 thoughts on “The Affordable Care Act we can’t afford

  1. Thomas Bender says:

    I got your solicitation to get my congress representatives to vote for repeal of Obamacare. In Oklahoma since all my representatives are Republican this would only confirm what they already are doing. As a Catholic I think you are off base. When the Affordable care Act passed The Tulsa World interviewed Bishop Edward Slattery of the Diocese of Tulsa. Bishop Slattery responded he was in favor of the ACA law with some changes. Every other religious leader interviewed by the Tulsa World was also in favor of the Affordable Care Act. My medical premiums deductibles, and out of pocket expenses for healthcare was over $15,000 in 2013. The insurance company profit driven medical system we have is not any good. We should have Medicare for all, however ACA is a start.

    1. Joshua Mercer says:

      What we had before the ACA was not the best possible system for health care — not by a long shot. On that we agree. But the ACA was not an improvement but rather made so many things worse. My own premium rose 32%. Not really that affordable for my family, that’s for sure.

  2. Vincent says:

    You’ve completely misunderstood what the CBO said. Currently, because the government subsidizes employer-based health plans with tax incentives that are not available to people buying on the individual health insurance market, there are many people who work full time not because they need the salary but because it is the only way to get an affordable health plan. The Affordable Care Act. has changed that and made it possible for people to buy affordable insurance on their own. Thus, many people will now quit their full time jobs that they held only so they could access insurance. This is not 2.5 million jobs that will go away. This is 2.5 million jobs that will now be available to currently unemployed people who are seeking full time employment. So, the Affordable Care Act has made insurance more affordable for individuals, made jobs available to the unemployed, and and corrected an inequitable system that unreasonably privileged employer-sponsored health plans over individual plans. What’ s not to cheer here? Up until very recently, conservatives were decrying the “job-lock” created by the current tax structure and advocating a move away from employer-based plans as a way to foster greater competition in the health insurance market. It is the height of hypocrisy to now turn around complain when the policies that conservatives used to champion have been implemented.

    1. wheaton4prez says:

      Vincent. You haven’t accurately characterized what the CBO reported.

      They said that the economy would lose the equivalent of 2.5 million jobs. If other people would replace those positions as you suggest, they would not report that those jobs would be missing.

      1. Vincent says:

        What they are talking about is a reduction in the hours that workers choose to work, not in the availability of jobs. In the short and medium term, people choosing to work fewer hours or choosing to leave their jobs will result in employment opportunities for the large number of people who are currently unemployed or underemployed. It’s possible that in the long term that this will result in an overall slowing of the growth of total hours worked across the economy (very different from an actual reduction in hours worked or in the number of jobs). But that would only happen if there weren’t enough unemployed or underemployed people to fill the hours and positions of those choosing to vacate them- i.e. if we reach full employment- which would be fantastic economic news.

        So again, it is completely disingenuous to try to pass this report off as bad economic news. The potential “reduction” means that we are beginning to correct the situation where a skewed tax structure keeps a large number of people stuck in jobs they don’t want because it is their only access to affordable health insurance. Since when are conservatives in favor of maintaining inequitable tax structures that distort the economy and keep people from living as they would choose? That should be a rhetorical question, but unfortunately it has an answer: since Obama stole their thunder and passed the very health care reforms that conservatives advocated through the 1990′s and early 2000′s.

        1. wheaton4prez says:

          Vincent. You’re just repeating the same mistake.

          If those reduced hours created opportunities that people would take advantage of, the CBO would not have measured it as a reduction in total hours worked by the population.

  3. May says:

    Typo: Meant to say:
    those who did not have health care (insurance),,,,I inadvertently left off the word “insurance”.

  4. May says:

    James: Well, we had universal health care in that no one was left without care in this nation. People got treated. The very poor had Medicare and those who did not have health care, many times by choice, still got care. They were treated and usually worked out a payment system or the heath care providers had to write it off. We needed insurance reform and torte reform but not the ACA. But, to say we didn’t have care for all citizens is a lie. And don’t distort what Pope Benedict XVI was referring to in his comment.

    1. James says:

      Considering that Pope Benedict XVI is German, I would assume this quote means that he is supportive of a universal health care system similar to that which they have in Germany, and which is supported by the overwhelming majority of the German people.

      1. wheaton4prez says:

        Why would you assume that? Every reference the Pope makes is now a reference to something in their home country?

        I’m pretty sure that the Pope was aware that there are many forms of universal coverage in the world.

  5. Maggie says:

    Excellent article. I have for a long time worried that devout Catholics,and many others for a variety of reasons, go at this approach like 10 yo. Never looking at the consequences of what they are demanding and are so sure that Jesus wants it. God gave us a brain to use and we should do so. Destroying a system that has done more to eradicate poverty in the world is not a really smart thing to do. Who will take our place, and how will they explain that to Jesus?

  6. James says:

    Universal health care has received the support of a few very prominent Catholics:

    “Justice requires guaranteed universal access to health care,” he said, adding that the provision of minimal levels of medical attention to all is “commonly accepted as a fundamental human right.” – Pope Benedict XVI

    “We are not simply talking about ensuring nourishment or a “dignified sustenance” for all people, but also their “general temporal welfare and prosperity”. This means education, access to health care, and above all employment, for it is through free, creative,
    participatory and mutually supportive labour that human beings express and enhance the dignity of their lives. A just wage enables them to have adequate access to all the other goods which are destined for our common use.” – Pope Francis

    Universal health care is only controversial in the United States. Every other developed nation in the world has it. The Catholic Church supports it. The ACA is a deeply flawed law, but support for universal health care systems is quite Catholic.

    1. wheaton4prez says:

      Do you think that Pope Francis supports more people dying of cancer than fewer?

      It is a proven fact that if you get cancer in one of the nations you applaud in your comment, your chances of being alive in 5 years is significantly lower than it is if you get the same cancer in the United States.

      Simply calling a health care system Universal Care does not render it universal access to health care. At least not of the best quality available.

      Before ACA, the US system provided Americans with access to better healthcare results than the countries with so-called universal care.

      The results, actually healing people, is arguably a greater Catholic interest than achieving what is “universal” in label only.

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