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The Obamacare Ratchet Effect

The Republicans have learned a basic political lesson: benefit programs create their own constituencies. Will Democrats catch on?

Trump discussing replacing the ACA with other lawmakers at the White House, March 2017. Mike Pence / Wikipedia

The latest failure of Senate Republicans to repeal Obamacare after repeatedly promising to do exactly that offers a basic political lesson for both sides: benefit programs create their own constituencies.

This should be obvious, but many Democrats seem to be just starting to realize it, and only after a long struggle. It can be seen in the number of Democrats suddenly lining up behind Bernie Sanders’s Medicare-for-All bill: Cory Booker, Kirsten Gillibrand, Kamala Harris, Elizabeth Warren — all top contenders for the party’s nomination in 2020, along with Sanders, of course. For some, like Warren, this has been an evolving stance over several years; for others, like Al Franken, the change of heart seems to have come from spending a couple hours on Twitter.

Hillary Clinton, too, gets it, belatedly. In her post-election postmortem What Happened, she writes:

Democrats should reevaluate a lot of our assumptions about which policies are politically viable. These trends make universal programs even more appealing than we previously thought. I mean programs like Social Security and Medicare, which benefit every American, as opposed to Medicaid, food stamps, and other initiatives targeted to the poor. Targeted programs may be more efficient and progressive, and that’s why during the primaries I criticized Bernie’s “free college for all” plan as providing wasteful taxpayer-funded giveaways to rich kids. But it’s precisely because they don’t benefit everyone that targeted programs are so easily stigmatized and demagogued . . . Democrats should redouble our efforts to develop bold, creative ideas that offer broad-based benefits for the whole country.

The question is not so much “why now?” as “what took them so long?” From an immediate political standpoint, it’s an easy calculation. Polls show majority support for single-payer health care, not just among Democrats but for voters as a whole, and it’s becoming a litmus test for activists. At the same time, Sanders’s Senate bill (and John Conyers’s perennial House bill, which for the first time got majority caucus support) has no chance of passing under Trump. So just like the fifty-four bills to undo the ACA that Republicans passed under Obama, it’s a symbolic gesture to the base, one that doesn’t force any hard choices yet. Should a Democrat actually win the next presidential election, and the Democrats gain majority control, we will see if they follow through or, like the Republicans ultimately did, choke.

But that single payer is a winning issue should have been apparent long ago. Political scientists talk about the policy ratchet effect: that once a benefit policy is implemented, it’s hard to revoke because people tend to like those benefits, and they become institutionalized in the political system and economy. The more universal the policy, the broader its support base and the harder it is to undo.

As for Republicans, they’ve learned the hard way that denying people health care is a lot easier than taking it away from them once they have it, even if those people are your party’s base. Benefits created by entitlement programs become the new floor, opposition parties are forced to accept them as a starting point for further reforms, and they tend to only go up from there. Hence all of Obamacare’s flaws have created an appetite not so much for the status quo ante, but for something better.

For those opposed to entitlements, this is a nightmare scenario, which is one reason conservatives talk about ratchet effects much more than liberals. Ted Cruz presciently warned in 2013 “if we don’t do it now, in all likelihood, Obamacare will never, ever be repealed,” because it would create the very coalition of beneficiaries to defend it, which is what Obama was counting on from the start.

This was never a sure thing, because the ACA isn’t a universal program: not everyone who shares the costs enjoys the benefits. Nor is it really an entitlement in the traditional sense: subsidies don’t go directly to individuals but to insurance companies. Conservative commentators like Jonah Goldberg pointed this out at the time in hopes that the bill might be defeated: that the coalition of those who benefit would be smaller and weaker than those who oppose it. Broaden the base, and that becomes far less likely.

This is why means testing, of which wonkish-minded Democrats are so fond, is a political loser when it comes to basic social benefits like health care. No one today complains about “socialized libraries” or demands that we “keep big government out of the education industry” (with the possible exception of our Secretary of Education). Why give rich people things they can afford on their own, like education, or fire protection, or roads? Because it creates buy-in. When policies don’t have universal buy-in, they’re in danger, and the resilience of the program depends on the clout of the beneficiary group. It’s why Medicare has weathered multiple efforts to defund it, while the Children’s Health Insurance Program (CHIP) is always first on the chopping block: old people vote, and children don’t.

Theoretically, the ratchet effect could go the other way. Writing in Development and Crisis of the Welfare State, political scientists Evelyne Huber and John Stephens imagine a scenario in which “It is possible to create resistance against universalistic and redistributive policies by creating fragmented programs that privilege certain groups over others and by giving incentives to foster private alternatives.” Huber and Stephens consider that scenario so unlikely that they bury it in a footnote, but it’s a pretty good description of how welfare politics works in the US. It explains a lot about why we remain the only rich country without universal health care: something the rest of the world considers a basic human right and we talk about as a privilege, if not a frivolous birthday gift.

Should our elected leaders someday decide to treat health care less like a pony and more like a cornerstone of a civilized society, they may learn that Americans see it in much the same way as the rest of the world.

End Mark

About the Author

Michael Paarlberg is an assistant professor of political science at Virginia Commonwealth University, a postdoctoral fellow at the University of Pennsylvania, and an associate fellow at the Institute for Policy Studies in Washington, DC.