It is important to remember that Krugman is not merely a brilliant economist, but an astute political observer, as his columns over the past decade have made clear. Often, because he understands the economic impact of certain decisions, he is able to lay out what the political consequences will be, while others offer thoughts that may seemingly make political sense to the conventional thinkers of the DC village, but since they are based on wrong-headed economic thinking inevitably turn out incorrectly.

Krugman lays out in detail what the problems are in insuring a population in which only some had health insurance. If you merely require coverage of pre-existing condition and the healthy uninsured do not sign up, as was the case in New York, premiums can skyrocket, as the healthy risk going uninsured. Or else you confront the situation where those with previous conditions can be reject for insurance. To these observations I would add the additional one of being locked into a job once a condition is diagnosed, even at pay levels far below what one could make elsewhere, because either the employee or a family member now has a preexisting condition.



Obamacare closes this gap with a three-part approach. First, community rating everywhere — no more exclusion based on pre-existing conditions. Second, the “mandate” — you must buy insurance even if you’re currently healthy. Third, subsidies to make insurance affordable for those with lower incomes.

This is, as Krugman notes, the approach taken in Massachusetts, where it has been successful and remains popular, even if the former governor responsible for the approach Krugman labels "ObamaRomneyCare" tried to distance himself from it in the most recent presidential campaign.

But the Bay State already had community rating and relatively low rates of uninsured (and for the latter I might argue that because of heavy unionization even non-union workplaces tended to offer good medical insurance as a means of dissuading employees from organizing)> A state like California, which lacked both, was supposed to demonstrate the problems with the approach taken in ACA.

Except as we all know, as the bids have come in, they have been lower than expected.

Krugman is aware that the plan ia complicated, because simpler options like Medicare for all were taken off the table. And there are states where Republicans have done all they can to block ACA, which will create more confusion - although we are seeing the oddities like that of Arizona, which Krugman does not mention, where the conservative Republican governor is vetoing all legislation until her conservative Republican legislature agrees to the expansion of Medicaid necessary for those uninsured too poor to afford to buy insurance on their own. Krugman notes, that

in states where Republicans have blocked Medicaid expansion, such unfortunates will be left out in the cold.

Still, here’s what it seems is about to happen: millions of Americans will suddenly gain health coverage, and millions more will feel much more secure knowing that such coverage is available if they lose their jobs or suffer other misfortunes. Only a relative handful of people will be hurt at all. And as contrasts emerge between the experience of states like California that are making the most of the new policy and that of states like Texas whose politicians are doing their best to undermine it, the sheer meanspiritedness of the Obamacare opponents will become ever more obvious.

Above, I talked about the perspicacity of Krugman's political analysis. In that regard, perhaps the most important paragraph in this column is its penultimate:Take Texas for example. A state that is no longer majority White, non-Hispanic. It is also a state where the percentage of uninsured is astronomical. If that population begins to realize what the Republicans are doing to them, and gets registered, is it possible that the state could flip as early as 2014? If the Democrats in the state, running for federal and state offices campaign on this issue, might it be possible to also make significant changes in the House delegation?

Let's recognize something. The insurance companies like ACA, because it expands their pool of customers. They do not care whether they are paid by tax deductible support from employers or by federal and state taxes for Medicaid - it is still revenue for them.

The meanspiritedness of Republicans, particular in the House, where they may well reject a compromise on immigration, will become even more of an issue when people see the difference the Affordable Care Act can make.

And then there is the challenge on the philosophy of government - or should we say in the case of Tea Party Republicans, the philosophy of a lack of government? It is this that Krugman addresses in his final paragraph:

So yes, it does look as if there’s an Obamacare shock coming: the shock of learning that a public program designed to help a lot of people can, strange to say, end up helping a lot of people — especially when government officials actually try to make it work.

CLip and save this column. Remember it when we see the real political impact of ACA in next year's elections.

Peace.