Will Wilkinson has a smart piece over at The Economist arguing that, contra Matt Steinglass, Obamacare does not in fact take into account natural pricing mechanisms, and that it in fact further obscures the bad policies inherent in the status quo:

Hayek's most famous insight, about the indispensible informational function of the price mechanism, in his most famous paper, "The Use of Knowledge in Society", comes in the course of an argument to the effect that central economic planning boards are bound to fail. On it's face, it's hard to agree that the Affordable Care Act does much to incorporate the fundamental Hayekian lesson when one of its key provisions is the establishment of the Independent Payment Advisory Board, a sort of central price-setting committee thought by its advocates necessary to contain the runaway cost of the American health-care system. And why has American health-care spending exploded so? In large part because market prices for insurance and health services have been abolished and obscured. Had the ACA incorpated the Hayekian concern, it would have enlarged the role of freely-moving market prices in the provision of insurance and health care, but it does the opposite. [...]

One of my complaints about this debate is that the left has been committed to a fundamentally dirigiste vision of universal health care for so long that it has difficulty even conceiving of a system that combines relatively laissez faire market institutions with generous social insurance. My colleague's insistence that Obamacare represents some kind of culmination of liberals' appreciation and incorporation of Hayekian concerns only reinforces my complaint and leaves me in despair.

Despite the CBO's best assurances, the ACA is not a budget-fixer. I'm a little confused why Democrats should even make this claim. Coverage is the point of this first wave of reforms; cost-containment is the second phase.

Democrats claim that the ACA will save money in the long-run, but they use the rosiest predictions possible to make these claims, pointing to CBO estimates that account for everything short of political reality

Tim Carney illustrates how this was the plan from the very beginning:

"Buy now, pay later," is how Peter Suderman at the free-market Reason magazine describes this strategy, which was deliberate on behalf of lawmakers in both Boston and Washington. In March 2009, as Congress was taking up the health care bill and Massachusetts was straining under its rapidly growing health care costs, the New York Times reported that the Massachusetts bill's authors saw that everything was going according to plan. "Only by deferring the big decisions on cost containment, [Massachusetts health care architects] said in recent interviews, was it possible to build a consensus among doctors, hospitals, insurers, consumers, employers and workers for the requirement that all residents have health insurance." In the June 2010 briefing on K Street, one participant asked Bowen what will happen when Obamacare's bill comes due. "If the things that are in the bill fail to reduce cost, or they need more oomph," Bowen said, "then that is the next big phase of health care reform." In Massachusetts that meant tax increases and price controls. In Tennessee, which faced a budget crisis 10 years after its 1994 state-run health insurance program, "the next big phase of health care reform" meant slashing 170,000 people from the rolls, according to Suderman. What will "the next big phase" of Obamacare be? When the subsidies and insurance regulations drive a huge increase in demand for health care, how will Congress and the administration handle the rising costs?

As more and more people find themselves on the healthcare exchanges, and more and more people are forced by the individual mandate to purchase insurance from private insurance companies (utilities?), more and more political pressure will be placed on politicians to make the subsidies even more generous. Meanwhile, supply-side forces - drug-makers, insurance companies, doctors - will apply their own political pressure on the government to protect their operations from competition. Trade-offs will be made.

Here's Milton Friedman on the tyranny of the healthcare status quo:

The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes. The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction.

I'm a supporter of the ACA, but I know that some fundamental changes still need to be made in order to right our fiscal path. Prices need to become transparent; we need to break away from employer-provided insurance; and more competition needs to be introduced to both insurers and supply-side forces. The exchanges may be one way to move us toward this goal, but without further reform the tyranny of the healthcare status quo will remain.