Obamacare brought a lot of promises from its sellers. Some of them turned out to not be true. The most famous being that if we like our health insurance we can keep it. Obviously that wasn’t quite the case.
One of the problems with selling policy are these promises. We’re told that this new law will make things better. It’s really hard to tell whether that’s right or wrong. With financial regulation, half of the law was creating new powers for agencies to write new rules. If the rules haven’t been written, how can we be sure we’ll be better off?
This is even more confounding with any policy sold under some kind of economic benefit. The fiscal stimulus to support the economy undoubtedly worked. What we don’t know is how the economy would have done without the policy. And, the stimulus program didn’t work nearly as well as we were told it would.
Obamacare was sold on a lot of potential economic benefits too. Instead of growing the economy, it’s more about reducing the burden that healthcare costs place on the economy. One way to reduce the cost of healthcare is to reduce ER visits. Many ER visits result from people putting off issues and symptoms that a doctor can treat until it becomes a crisis. For instance, someone with no insurance ignoring chest pains until a full blown heart attack ensues. Or, a family with no insurance and no money goes to the ER for an ear infection because the hospital can’t turn them away.
These people make healthcare more expensive for everyone by either not getting preventative treatment or not having to pay their hospital bills. Obamacare is supposed to reduce these types of visits. And that’s an easy assumption to make. These people now have health insurance, they’ll surely go to the doctor before heading to the ER right? We’ll see.
In economics, studies with control groups on a broad scale is nearly impossible. But researchers got lucky in 2008 when Oregon expanded its health coverage for the working poor through a lottery system. Through random selection, researchers now had a test and control group to compare how behaviors changed when people got health insurance. So, in the case of ER visits, did people with health insurance reduce their trips to the ER?
No. In fact, their trips increased, by 40%. And these trips were not true emergencies.
That sounds like a disaster for Obamacare then. Well, not so fast. This data shows that if you just hand out health insurance and do nothing else, people that go to the ER will still go to the ER and then some. But it’s not clear if this spike is permanent or if ER visits will decrease as these people learn how to use their insurance. Other studies and experiments show that reducing ER visits is a combination of having access to preventative care, and also making sure frequent ER visitors use it.
Policy is never a magical solution to a problem as big as healthcare costs. But it has to be sold to us that way because there’s no other way to get the broad support needed to pass legislation. But when certain assumptions are baked into the promises, keep a skeptical eye on them.
Image: Charles Nadeau