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September
2017 27

The [Opportunity] Cost of Repealing Obamacare

By Tim Shea

Special Contributor

 

Third time’s the charm, right? Right? Well, maybe not. At least that’s the lesson President Trump is learning as his legislative counterparts yet again appear on the verge of failing to repeal the Affordable Care Act. With the fate of the Graham-Cassidy bill thus all but sealed, so too goes their chance of dismantling the controversial healthcare law with a simple party-line vote.

To an extent, the GOP’s efforts to kill Obamacare are understandable, even if they don’t exactly inspire sympathy. Opposition to the law was a key plank of their 2016 platform. More legitimate is that the healthcare framework put in place by the ACA contains some serious flaws, flaws that even some proponents admit could use a bit of fixing. (That some of those fixes are decidedly more left-wing than Obamacare’s system of exchanges is beyond the scope of this blog.)

So okay, assuming that repealing, or replacing, or whatever-ing Obamacare would bring with it all of the benefits the GOP claims it will, that still leaves a major question: at what cost? Due to the complexities of Congressional procedure, it’s hard to pin down how many times the GOP has tried to change the law. Suffice it to say that estimates run into the seventies. That means weeks, if not months, have been devoted to debating, deal-making, and voting on ACA-related legislative gridlock. With Congress costing the taxpayers something like $4 billion dollars a year to maintain.  Back-of-the-envelope math translates that time into hundreds of millions of dollars spent on…what exactly?

But the real price tag of the Republicans’ quixotic efforts is not the dollars spent—a hundred million dollars is nothing for the Federal government—it’s everything else they could have been doing instead. Economists call this the opportunity cost, i.e. the value of the most productive alternative to the choices ultimately made. It means not only factoring the price of tuition, books, and room and board into the cost of a college education, but also accounting for the wages foregone by not working full-time. The opportunity cost of Congressional efforts to repeal Obamacare have been and will continue to be high.

Simply put, there is no shortage of urgent matters that could use some Congressional TLC; the debt ceiling; the budget; immigration reform; and don’t forget about that short guy on the Peninsula waving his nukes at Guam. They’ve instead decided to take another trip down the Obamacare rabbit hole despite having several prominent Republicans not on-side. The bottom line is that, no matter your beliefs on the ACA’s merits or lack thereof, you can probably imagine a better use for Congress’s time than another doomed attempt to re-legislate the matter.

Now, in the spirit of extending equal-opportunity to the slagging of politicians, it’s worth noting that this criticism is hardly one limited to Congressional Republicans. Indeed, some of the most pointed criticisms of President Obama and his Democratic-dominated legislature circa 2010 are that they chose the wrong time to push healthcare reform. Perhaps if they hadn’t burned their mandate and political capital on a controversial, flawed, and poorly understood healthcare bill, they could have focused their efforts on issues like immigration reform where there existed at least the possibility of bipartisanship. They didn’t.

Of course, that line of thinking just begs for countless rounds of counter-argument and speculation about Republicans being obstructionist and so on and so forth. And that reveals the key flaw of opportunity cost theory: it can only represent our best guess about what would have happened. At its essence, an opportunity cost is nothing but a series of assumptions about an impossible-to-know counterfactual, a glorified what-if. It’s a valid critique.

Then again, looking at the current state of Congress, it’s hard to imagine how we wouldn’t be better off if our elected officials all took a deep breath, leaned back, and asked themselves: “what if?”


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