Obamacare and the prognosticators

Many conservatives are rightly feeling vindicated by the rolling failures of Obamacare this year. The economic logic of the exchanges is proving untenable in a way that many predicted when the Democrats set the country on this path. And some of the particular problems behind the failures, perhaps especially the way in which the system’s requirement for fairly comprehensive coverage has made insurance less attractive to the consumers it wants most, were evident before this all began. But it’s important to also see what hasn’t turned out as anyone quite expected, especially as it would helpfully moderate expectations about what people on all sides are predicting now.

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The past five years should humble any claims made on behalf of any health-economy models (and such claims never had much of a right to be proud anyway). Such models can be useful and important, and we should work to improve them, but we also have to be aware of their limits, and in policy debates we too rarely are. Not just the various academic and government models have been wrong in key respects. The insurers have seriously mispriced their products over and over too, and you’d have to say at this point that they don’t have a good grasp of how the individual market is working—and that no one else does either.

As a general matter, I’d say everyone (left and right) overestimated the effect Obamacare would have on the larger health-care system. Its footprint has been much smaller in every key respect than anyone thought.

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