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Can Obamacare Catch a Break?

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In campaigning for the Affordable Care Act, President Obama famously promised that if you like your current health insurance, you can keep it. Republicans have had a field day with the relatively small number of cases where an insurance policy fails to meet the ACA's minimum standard and a consumer is asked to buy a better plan -- often at lower cost if the person is of modest income and qualifies for subsidies, but sometimes at higher cost.

The administration insists that these cases are the exception. Now, however, comes one of the White House's own advisers who help craft the ACA -- saying not only won't many people get to keep their insurance but that Obamacare, over time, is likely to drive out employer-provided insurance altogether.

This worthy would be Ezekiel ("Zeke") Emanuel, M.D., brother of former White House chief of staff and now Chicago Mayor Rahm Emanuel. Brother Zeke is promoting a new book, in which he contends that the combination of a "Cadillac Tax" on good insurance and the rather low $2,000-per-worker fine for an employer's failure to provide employee health insurance will lead most employers to drop coverage altogether. There has already been an epidemic of employers reconfiguring full-time jobs as part-time ones to avoid the insurance mandate.

Oh, those Emanuel brothers. We expected this line of reasoning from Republican critics, but why is Zeke Emanuel promoting this story? Surely he doesn't put selling books over loyalty to his president.

The trouble is, Emanuel could well be right. America's corporations have been driving down wages for a generation, outsourcing what they can, converting permanent payroll jobs to part time, temp and contract work. As part of this relentless cost saving, employers have already been shifting more health premium expenses to workers.

The Affordable Care Act could indeed push many over the edge, into dropping coverage entirely. It's cheaper to pay a $2,000 fine than to cover a worker for, say, $8,000. This incentive must have dawned on Emanuel and other architects of the ACA.

Some health experts, including Emanuel, think it's ultimately constructive to get employers out of the health coverage business. Ideally, workers could go to the health exchanges and purchase insurance directly. Moderate-income workers would get subsidies and low-income workers qualify for Medicaid. In theory, the money that companies save might go to give workers long-deferred wage increases.

But in the real world, corporations are loath to grant raises, and the net cost to workers with employer-provided insurance is often less than the cost of buying it from a private insurer via the Affordable Care Act. Emanuel may well be right that the ACA accelerates the trend of corporations dropping coverage, but this does not necessarily represent progress.

Ideally, employers would no longer provide insurance because all Americans would get their coverage through a single payer system. But under present law, that's not what will happen to workers whose companies cease paying for insurance. In many states, choices are extremely limited, and the insurance policies with affordable premiums have high deductibles and co-pays.

If Emanuel is right, the long-term effect could be more demands from Americans for a comprehensive single-payer system. That would be swell, but politicians live and die in the short term. As more workers lose coverage, or find themselves paying more money, President Obama and the Democrats will take the heat.

Dr. Emanuel, meanwhile, may be embarrassed to find himself quoted in Republican TV spots savaging Obamacare. This man was an architect of the plan, but in his role as commentator he now says that the plan will do the opposite of what his president pledged. While advising the White House, did he alert Obama to this risk?

This was supposed to be the year when Republican extremism fell of its own weight.

In his new book, The Loudest Voice in the Room, on Fox News and its president Roger Ailes, journalist Gabriel Sherman contends that Fox's business strategy of riling up the conservative base has made Fox rich, but has pushed the Republican Party far to the right of the views of most Americans. Sherman recounts stories of Republican master strategist Karl Rove warning Ailes that he was destroying Republican chances.

That account may accurately describe Republican extremism, yet the one force that could save Republicans from themselves is the Democrats. Republican Senate candidates are indeed far to the right of public opinion generally, but the Republicans could well take control of the Senate.

Some 12 million more Americans are getting health coverage thanks to Obamacare. Yet the bad news about the Affordable Care Act keeps crowding out the good news.

Obamacare may be a partial success in the sense that it makes incremental progress towards insuring more Americans -- and still be a huge political failure. Policy wonks with no feel for politics need to be kept far from the process of governing.

Robert Kuttner's new book is Debtors' Prison: The Politics of Austerity Versus Possibility. He is co-editor of The American Prospect and a senior Fellow at Demos, and teaches at Brandeis University's Heller School.

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