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October 6, 2013

MICHAEL HICKS: The Affordable Care Act kickoff

If only we could get away from employer-based health insurance.

Last week marked an important milestone in the Affordable Care Act’s implemen-tation. It also marked the start of Fiscal Year 2014. It is hardly too much to say that much of the wrangling and frustration over domestic policy we see today is due to the ACA. There is little in the wind to suggest that is going to change in the coming months, or even years, so a bit of honest reflection is warranted.

Like most Americans, I am dismayed at our combination market and system for the delivery of health care. I am only glad insurance companies, regional hospitals, 30 federal agencies, hundreds of state agencies, the AMA and my employer are not responsible for ensuring dinner arrives at my table tonight. It would certainly be cold, late and expensive.

Like most Americans, I am confused by the ACA. I don’t have a spare couple of months to read it in entirety, but am certain there are things about it I will like and some I will detest. On balance though, it is increasingly clear it will require herculean fixes. I say this because the ACA increasingly appears to have adverse short-term labor market effects. Had the economy more fully recovered by now, it would not be so severe. However, should the ACA be repealed, I do not believe we would see a resurgent economy. To be sure, the blame for the shocking growth of part-time work over the last year falls squarely upon the ACA, but there are many other policy choices that hold back the economy. Moreover, as bad as the ACA is in limiting employment growth in the short run, it is not at all clear to me this problem will persist. In fact, if we could just get away from employer-based health insurance, it seems likely labor markets would improve. Moreover, much of what is driving the health care cost debate is mistaken. Health care costs are not really rising.

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