Krugman’s blog, 6/24/15

There were three posts yesterday.  The first was “Donkey Kong Economics:”

Bloomberg blazes new frontiers in article illustration; you can see why my beard is irreversible at the point. And I guess being portrayed as a master of Mixed Macroeconomic Arts isn’t the worst thing in the world.

One thing, though: It might be worth noting that Benn Steil, after accusing me of cherry-picking data on Iceland and Latvia, apparently never went back to look either at my later work or at the evolving numbers. My early call that Iceland was experiencing a better crisis than anyone else has held up very well:


Indeed, at this point it’s more or less the conventional wisdom.

Yesterday’s second post was “Most of the Way With Obamacare:”

As we wait for King v Burwell – just how far are Republicans on the court willing to destroy the institution’s reputation on behalf of their party? – one question I found myself wondering about was how much of its original goal Obamacare has achieved. We know that the number of uninsured has dropped sharply; we also know that there are still a lot of uninsured. So how are we doing?

There are three issues that, I find, most reporting on the program’s progress tend to ignore. The first is that the ACA was never intended to cover everyone – undocumented immigrants aren’t eligible, yet account for several percent of the population. Second, because signup isn’t automatic, there will always be some leakage, some eligible people who fall through the cracks. Finally, of course, a large number of states are refusing to expand Medicaid and in general trying to obstruct the law.

So it seems to me that to evaluate the program we should (a) look at states that have implemented the law as it was intended to work and (b) compare with a realistic benchmark. For the latter, I’d suggest Massachusetts, where Romneycare has been in operation for almost a decade – and which still has 5 percent of adults age 18-64 uninsured, probably about half undocumented immigrants and half eligible residents falling through the cracks.

How is Obamacare doing relative to that benchmark in its second year of operation? The answer is, pretty well. In Medicare expansion states, it’s already around 80 percent of the way there:

And notice that this been achieved while the deficit has been shrinking and we’ve been having the best job growth since the 1990s. Folks, this program works; not perfectly, but every single claim by its opponents — it won’t reduce the number of uninsured, it will cause soaring rates, it will explode the deficit, it will kill jobs — has been proved false.

The last post yesterday was “The Persistence of ACA Denialism:”

I guess people with strong political preferences have always had a hard time accepting facts that are at odds with those prejudices; but I do also think that it has gotten worse in modern America thanks to the closed information loop of movement conservatism and the incestuous amplification it brings. You see it in things like the rise of inflation trutherism; you also see it in the inability of many on the right to accept the reality that Obamacare really has covered a lot of previously uninsured Americans.

Anyway, the latest line I’ve been hearing is that the decline in uninsurance isn’t really about the ACA, it’s just the improving economy. Now, the same people who say such things tend to deny that the economy is really improving, too — Obamacare was supposed to be a job killer, so it must be killing jobs. But never mind. What about claims that the improving economy is the real story?

The answer is in two parts. First, the decline in the number of uninsured is too steep, too perfectly timed with the coming of the ACA to make sense in such terms. Uninsurance was rising until late 2013, despite a recovering economy, then suddenly fell off a cliff just as the ACA went into full effect. Not a coincidence.

Second, we are now at a point where a much smaller fraction of Americans are uninsured than we’ve seen in a long time, maybe ever. Even in 2000, with unemployment very low and health costs relatively moderate, Census data show that around 16 percent of Americans aged 18 to 64 were uninsured; meanwhile, the HRMS data, which are consistent with multiple other sources, show uninsurance among that group at about 10 percent, and just 7.5 percent in Medicaid expansion states.

I know this program was supposed to be a dismal failure. But, you know, it isn’t.



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