Paul Krugman assures his readers that his predictions and interpretations of economic events come out with flying colors. But that’s often because he ex post sets an unbelievably low threshold for success. Take for example his latest post on the Affordable Care Act (aka “ObamaCare”). Krugman first presents this chart, which refers to “Adults aged 18 and over” (information that I cropped out of the screen shot):
Then Krugman comments:
You still encounter people claiming that Obamacare has been a disaster, that more people have lost insurance than gained it, etc., etc. But the reality is that it has already made a big dent in the number of uninsured; and the quality of insurance has gone up, too, because canceled policies were canceled because they offered little real protection.
Of course, the coming of the law in January 2014 has been a big job-killer .. or maybe not…
[Graphic showing volatile job growth that doesn't drop in January 2014.--RPM]
This is what success looks like.
Notice what our slippery laureate has done. He has somehow managed to make the ObamaCare critics hold the prediction/position that “more people have lost insurance than gained it,” such that as long as some people gained insurance on net, it’s therefore “success.”
Look at Krugman’s own picture of success, above. It shows that at best 4.6% of adults have gotten health insurance because of the new law, thus far–while 13.4% of adults still remain uninsured.
But that’s being too generous to Krugman. Surely some of that peak uninsured figure of 18.0% is due to the bad economy. For example, look at the start of the chart: As recently as 2008–in the last days of the evil reign of George W. Bush, hater of poor people–the uninsured rate was 14.4%.
Thus, relative to the last days of the Bush Administration, Krugman’s own piece of evidence suggests that so far the Affordable Care Act has provided insurance on net to 1.0% of American adults. In 2012, the 18-and-over population was about 240 million. So a one-percentage point increase in that group works out to about 2.4 million people.
Now putting aside issues of property rights, the Constitutional limits of the federal government, and other such principled matters, let’s look at this as practical economists: Taking at face value the goal of reducing the number of uninsured Americans, and seeing Krugman’s own evidence of “what success looks like” that shows (arguably) a net gain of 2.4 million adults attributable to the ACA thus far, what is the cost per person?
Well, the latest CBO report–which this HuffPo piece touts as great news for the president’s signature accomplishment–says the ACA will now “only” cost $1.38 trillion from 2015 through 2024. Oh but wait a second. That figure is the net cost to the government (i.e. general taxpayers). The CBO estimates the gross cost of the ACA at $1.84 trillion. The smaller number nets out the individual and employer “penalties,” as well as the excise tax on “Cadillac” plans. But the actual subsidies from the government to provide insurance under the ACA are the higher number of $1.84 trillion.
So: A gross cost of $1.84 trillion in higher government spending from 2015 through 2024, for what Krugman has shown thus far of a net 2.4 million adults gaining coverage. That works out to $767,000 per person, or $76,700 per person per year, over the decade window that the CBO projected. $76,700 per person per year? That’s some pretty expensive health insurance.
Now of course, Krugman and other fans of the ACA could come back and say that I’m leaving out the kids that have gained coverage, that the percentage of uninsured will continue to fall, that my population estimate from 2012 undercounts the actual number of adults who were surveyed, that maybe I am being unfair by picking the late-2008 percentage as the baseline of comparison, and on and on.
Nonetheless, I am taking Krugman’s post at face value. He didn’t bring up all those caveats. He posted his chart above, then another one showing (erroneously I’d argue, but leave that aside) that job growth hadn’t been hurt by the ACA, and concluded, “This is what success looks like.”
So I have to ask: For Krugman, what would failure look like? Would the percentage of uninsured have to actually go up? Or, is there a low enough margin of improvement–for example, a taxpayer cost of $250,000 per person per year–that even Krugman would admit, “Hmm, this is actually a debacle” ?