Paul Krugman: Obamacare Life Spiral
Imagine taking a time machine back to 2010 and telling Republicans in Congress, who were arguing that the CBO was wildly underestimating Obamacare’s cost, that the law would be cheaper than predicted and, at least in the states that accepted its Medicaid dollars, cover more people than the Congressional Budget Office thought. After the laughing and mocking and the calling of security, let’s say you offered this prediction in the form a of a bet. What odds do you think Obamacare’s critics would have offered? 2:1? 5:1? 10:1? But you don’t have to go back to 2010. Look at John Cochrane in late 2013, taking it for granted that Obamacare would implode in a death spiral within a few months. Look at The Hill just four months ago, telling us that double-digit premium hikes were coming.
One question we might ask here is, why is the news so good? The answer, I’d suggest — although I hope the real experts will weigh in — is that we’re actually seeing the opposite of a death spiral; call it a life spiral. For one thing, the huge surge in enrollments late in the day meant that the risk pool this year is better than insurers expected, and they now expect 2015 to be better still. Also, importantly, big enrollments mean that more insurers are entering the market, increasing competition. And, of course, the better the deal the more people will sign up: success feeds success.
More here: http://krugman.blogs.nytimes.com/2014/09/05/obamacare-life-spiral/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body&_r=2
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