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Obamacare’s Effect on Uninsured Is Trivial

At the end of 2014, Jason Furman and Matt Fiedler of President Obama’s Council of Economic Advisers published an analysis of the uninsured in the first half of 2014. The two economists boasted that “2014 Has Seen Largest Coverage Gains in Four Decades, Putting the Uninsured Rate at or Near Historic Lows.”

Their own graph shows how exaggerated and misleading this claim is.

The drop in uninsured is only impressive when compared to 2011, when the uninsured rate was higher than it has been since Medicare and Medicaid were launched. Although Obamacare, which was signed in 2010, did not have much of an impact in 2011, the American Recovery and Reinvestment Act of 2009 (the so-called “stimulus”) increased government dependency by adding over one hundred billion dollars to Medicaid spending and other subsidies to laid-off workers to pay health insurance premiums under COBRA.

As with other parts of the stimulus, this failed to stimulate the economy, resulting in a dragged out recovery from the Great Recession.

Look, on the other hand, at what happened in the early 1960s: A dramatic increase in coverage—to 80 percent of the population—before the institution of Medicare and Medicaid in 1965. Indeed, it looks like Medicare and Medicaid just hitched a ride on the secular increase in health insurance during the post-war boom.

This graph comes from President Obama’s own economic advisers. How do they not see that government interference in health care is the cause, not the solution, of the crisis Obamacare purports to solve?

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

John R. Graham is a Senior Fellow at the Independent Institute.
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