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December 17, 2013

Five myths about the future of Obamacare

(Continued)

4. Politicians decide the fate of laws.

Politicians don't control everything. The reactions of market actors can have a large impact on the fate of public policies. Sometimes business interests promote policy entrenchment because firms adapt to a new law in ways that become costly for them to reverse. One reason why airline deregulation became entrenched, for example, is that it led air carriers to alter their internal governance structures and business plans. Legacy carriers that couldn't adapt to the harsh realities of market competition either merged with other airlines or went under. The entrenchment of the ACA will depend in part on the financial stakes that hospitals and insurers are developing in the new health care system.

5. Conflict over laws usually dies down.

Political conflict over a program can last for decades. Congress passed the Voting Rights Act in 1965, and opponents continued to attack the legislation through 2013, when the Supreme Court invalidated one of its central components. The potential for conflicts over existing laws to persist has only increased as a result of partisan polarization. While both the Social Security Act of 1935 and the Medicare Act of 1965 had some bipartisan support on final passage, the ACA was passed on a party-line vote. Forrest Maltzman of George Washington University and Charles Shipan of University of Michigan have shown that the greater the roll call opposition when a bill is passed, the more likely the law is to be amended by a future Congress. An open question is whether partisanship exacerbates the problem of divisive enactment. While systematic research has not been done, there are good reasons to think it might. As David R. Mayhew of Yale argues, while a cross-party opposition to a policy might fade, "a party that loses on a congressional issue and stays angry may have an incentive to keep the conflict going."

These five myths suggest that liberals and conservatives alike should be cautious about making sweeping predictions about the future of ACA. The reality is that the dynamics surrounding any program - even the most popular entitlement - are constantly evolving and always contingent. Policy entrenchment is an ongoing process, subject to all the normal forces of politics.

             

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