The myriad technical glitches that have royally screwed up the rollout of Obamacare have been a terrific boon to the U.S. health scheme's vitriolic critics. They are busy crowing over this "proof" that President Barack Obama's hybrid compromise to bring affordable health coverage to millions of uninsured Americans is a hugely expensive boondoggle that will raise premium costs for everyone, seriously damage small business and cast another dark cloud over the economic recovery.
Here's one of the more upbeat comments from the far right of the political spectrum: "I … hope the incompetency on full display in HealthCare.gov translates to a new skepticism of big government by Americans," columnist Marta H. Mossburg wrote in The American Spectator.
But what if the naysayers are wrong? What if the Affordable Care Act boosts not only the health and insurance sectors but also consumer spending, the key driver of U.S. economic growth? It's far too early to assess the real impact of this enormous expansion of health coverage, although that hasn't stopped the ideologues from jumping in on both sides of the debate.
Nevertheless, some of the early indications are more positive than critics would have us believe. For one thing, the availability of affordable health care coverage for individuals could prompt more people to leave corporations to which they are tethered by group insurance plans. This could mean a more mobile, flexible work force and possibly a wave of business startups. (For every expert who touts this potential positive, another will warn darkly of curtailed small business expansions and increased closings because of soaring health insurance costs or penalties.)
And once the glitches are ironed out, many people could find themselves with hundreds of extra dollars in savings annually, much of which would be redirected to retail coffers.
Out-of-pocket spending on health care will certainly fall, in some cases dramatically. For nearly 12 million previously uninsured Americans who qualify for public subsidies, average annual medical costs will plunge to $34 (U.S.) from $1,463, a Rand Corp. study focused on Texas and Florida shows. Among the 19 million people who buy their own insurance, an estimated 48 per cent will be eligible for subsidies on the state health exchanges next year, another report says.
What's more, the risk of catastrophic medical expenses – defined as 10 to 20 per cent of annual income – will plummet for people in every income bracket, from an average of 45 per cent to only 5 per cent, the Rand study concludes.
Now it's true that the pricing of insurance will change, because insurers can no longer pile costs on people classified as higher risk, provided they qualify at all. These typically older people will almost certainly see lower premiums while healthy younger types face increases. But other reforms are designed to make delivery of medical care more efficient and hence cheaper, which should also affect premium costs.
We won't really know how this all shakes out until 2014. In the meantime, the government needs to fix those paralyzing Web and server woes before it can ever hope to sell the positive economic message.