Longform

Obamacare Sold Out America

In 2009, President Barack Obama set out to deactivate the next bomb awaiting the U.S. economy, the one ticking inside our bloated, beleaguered health system.

Since the 1990s, insurance premiums had averaged double-digit annual increases. America was spending more than $7,500 per person per year — 50 percent more than Norway, the next-largest contender. Health spending alone was chewing up one-sixth of the U.S. economy, double that of competitors like Japan.

Worse, we were paying Maserati premiums for something that looked like a used Kia. Though pols such as House Speaker John Boehner (R-Ohio) loved to bray that America had "the best health-care delivery system in the world," it wasn't remotely so. The World Health Organization ranked us an embarrassing 36th, behind Costa Rica, Colombia, and Saudi Arabia. Other rankings routinely place the United States near the bottom of the industrialized world.

"We spend one and a half times more per person on health care than any other country, but we aren't any healthier for it," Obama told Congress in 2009. "This is one of the reasons that insurance premiums have gone up three times faster than wages."

Big Medicine had done its best to keep it that way. Since 1999, it had spent nearly $6 billion on lobbying — three times what the next-largest industry, insurance, had spent. An obedient Congress had allowed Big Med to build a system in which millions couldn't afford coverage, huge swaths of the country were essentially served by monopolies, and prices continued to go up.

"In the decade up to 2009, 79 percent of all the growth in household income was absorbed by health care," says Dr. Brian Klepper, CEO of the National Business Coalition on Health. "Everything in Washington is rigged, but the thing most rigged is health care, because they have even more money than the banks."

But that spring, with an enraged electorate and the economy in tatters, Obama was given a once-in-a-lifetime chance to break Big Med's stranglehold. He vowed to do it the old-fashioned way: by introducing competition, forcing Big Med to earn its keep.

Everyone would sit "around a big table," Obama had told a crowd in Virginia the year before. "We'll have doctors and nurses and hospital administrators, insurance companies, drug companies. They'll get a seat at the table. They just won't be able to buy every chair."

Five years later, it's difficult to argue with Obamacare's success. Some 7 million people have signed up for insurance. The sick can no longer be barred from coverage, nor can the chronically ill be kicked to the curb.

Yet Republicans still rail that Obamacare is some socialist perversion. Democrats, meanwhile, often treat the plan as an illegitimate child they'd rather not acknowledge.

What both sides neglect to mention is their complicity in sabotaging the bill, selling out an unprecedented opportunity to the very guys who created the time bomb in the first place.


The president's ultimate goal was coverage for the nation's 48 million uninsured. In places such as Europe and Canada, the government pays basic health-care costs for all citizens. This type of insurance is often called "single-payer," because one payer, the government, covers basic medical care.

Anyone wondering how it might function need look no further than Medicare, which runs all senior health care in this country. It's arguably the most popular government program in America and one of the more cost-effective.

Start with the cost of administration. Medicare's ranges between 2 and 5 percent of its budget. For private insurance, the average is 12 percent. The Government Accountability Office once estimated that this simple savings alone would be "more than enough to offset the expense of universal coverage."

Moreover, a single provider would have the size to negotiate better prices from providers and pharmaceutical companies. According to a New England Journal of Medicine study, this would save $400 billion more — and provide a boon for American business, reducing labor costs by 10 to 12 percent.

A CBS poll found that 59 percent of the public favored a government health plan, but insurers treat single-payer like Israelis do the Palestinians: as a threat to their very existence. So the industry set out to ensure that such a program never saw the light of day.

"Of course they don't want it," Robert Reich, a former secretary of labor in the Clinton administration, wrote in a 2009 opinion piece. "A public option would squeeze their profits and force them to undertake major reforms. That's the whole point."

Congress, naturally, would not allow a frontal assault on the insurance industry. So Sen. Ron Wyden (D-Oregon) pitched the Healthy Americans Act, which had several Republican sponsors and significant support on both sides of the aisle.

It was a simple plan: Instead of supplying insurance to employees, companies would give that money to workers to shop for policies on their own, allowing them to pocket any savings. With so many shoppers flooding the marketplace, insurers would be forced to truly compete.

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Chris Parker
Contact: Chris Parker