A few weeks ago a friend in New York received a call from his stepmother in North Carolina. She was upset and scared. In recent years, this woman, who I will call Sally, has grappled with ill health. She was recently refused disability benefits and has a very tight household budget, existing on $1,400 a month. But now she has been hit by another blow. Two years ago she joined the Obamacare health scheme, paying $356 a month in premiums. But last month she was told that the cost had jumped to $1,115 — or $631 with Sally’s tax credit.
An economist might state that this simply reflects hard economic logic: Obamacare was never going to be able to offer low premiums indefinitely, since fewer than expected healthy people signed up and some insurance companies dropped out. But Sally and her family don’t care much about economic logic. What they face is the threat that their healthcare bills will double, seemingly inexplicably, and consume half their entire monthly income. They are not alone: many other families have experienced the same shock. Little surprise, then, that Donald Trump is extremely popular in this corner of North Carolina where Obamacare has taken root.
Pundits should take note. In recent weeks, devastated Democrats have come up with many reasons for their electoral losses, starting with the FBI investigation into Hillary Clinton’s emails. But, for my money, one key factor has not received enough attention: earlier this autumn, the details of the 2017 Obamacare premiums were mailed out, creating shock and confusion for numerous households.
This point is not always entirely obvious to elite pundits, let alone non-Americans. If, like me, you grew up in Europe assuming that free healthcare was as ubiquitous as running water, the patterns of the American healthcare debate tend to seem very alien, if not bizarre. And wealthier Americans often do not appreciate the psychological impact of Obamacare premiums for the simple reason that they don’t use the system (and often do not know anybody who does).
To pundits or economists, the logic of rising Obamacare premiums is so obvious that they are surprised that anybody can be surprised. In any case, what many Democrats have focused on in recent years is not the actual cost of insurance but the total numbers of people being covered. In that respect, they certainly do have something to celebrate: the White House says 20 million more people have gained healthcare insurance via Obamacare, even if they have pre-existing conditions. Indeed, to Democrat pundits, the most compelling proof that the system has “worked” is the fact that there have been record-high enrolments this autumn. Polls even suggest that a large swath of Trump supporters actually wants to retain the good bits of Obamacare.
But it is in the nature of human psychology that people always complain more loudly about what they have lost than what they never had. So while logic might suggest that many households should feel “grateful” for the arrival of Obamacare, I suspect this is outweighed by anger over rising premiums. And though voters should theoretically know that it will be impossible to keep the “good bits” of Obamacare while jettisoning the bad (as Trump has promised to do), this is offset by the fact that many families were angry that Democrats barely mentioned those rising premiums at all.
There is another key point. When I have talked to policymakers about Obamacare, I have sometimes been told that nobody should be seeing their premiums rise from $356 to $631 because there are subsidies available for cash-strapped households. That is true. In this case, when Sally looked deeper into the Obamacare system, with the help of a third-party adviser, she eventually found a way to cut through the complexity of the website and the bureaucracy to extract tax credits. As a result, it seems her bill may fall back to $241.
That sounds comforting. But there is a catch. Sally has cut her bill because she is savvy, determined and well-educated enough to fight back. Millions of other Americans are not; least of all when faced with the hellish complexity of the Obamacare system and the shockingly user-unfriendly website. And even though Sally has not lost out financially, she does not feel remotely happy; on the contrary, after seeing $356 turn into $1,115 and then $241, she is terrified about what shocks might hit next. “This is the part that really scares me — [the risk of] owing thousands at the end of the year [from tax credits],” she says.
Or to put it another way, Obamacare is not just a tale about healthcare and costs; it is also a story of people who feel trapped in a capricious system that they don’t understand, much less control. Little wonder, then, that Trump’s message about empowerment and fixing Obamacare turned out to be so popular this year. Now let’s see if he can deliver.