Health Reform's Next Test

AP Photo/Jim Mone

In St. Paul, Minnessota, for shoppers scramble to finalize health coverage before the new year.

Failure, flop, fiasco—however you describe it, the Obama administration’s rollout of Healthcare.gov will go down as one of the most embarrassing episodes of public mismanagement in recent history. In principle, the defects of the website have nothing to do with the merits of the Affordable Care Act. As a practical matter, however, the two have become intertwined, and the big question is how much damage the flawed rollout will do to the political survival of the ACA as well as those in Congress who voted for it.

In the short run, Healthcare.gov’s problems have undermined trust in both the law and liberal government. They have created a general impression not just of incompetence but of failed promises, obliging the president to adopt an apologetic tone and shaping the media narrative about the ACA. Public approval of the law has dropped significantly as support has fallen among key Democratic constituencies such as the young, women, and Latinos.

But whether these judgments persist depends at least in part on objective performance. Some state exchanges worked well from the start, and Healthcare.gov improved by December, though it was far from perfect. The law’s fate may hinge on whether enrollment for 2014 falls so far below projections as to drive up premiums for 2015, convincing many people that the reforms are counterproductive.

Here’s the core problem: The more difficult it is to enroll, the more likely people with high medical costs will predominate among those who sign up. After all, they have the motivation to persevere, while individuals with no immediate medical needs may not even try to enroll or may give up in frustration. But no insurance system can work well unless the healthy as well as the sick pay into it.

Signing up people was never going to be easy. According to a 2012 survey, three-quarters of the uninsured were unaware that the law would soon give them new opportunities for health coverage. As a general rule, news about any product or program has its biggest effect on those who have little prior information about it. So the harsh glare of early publicity may have had an especially powerful impact on the very people who would benefit from the ACA.

The relentless attacks on “Obamacare” by right-wing organizations and conservative media have probably also affected enrollment, at least among their target audience. According to Gallup surveys conducted throughout the fall, while 25 percent of all un-insured Americans said they would remain uninsured in 2014, that proportion stood at 45 percent among Republicans without coverage and only 15 percent among uninsured Democrats.

In addition, states where Republicans hold power have erected significant obstacles to enrollment. Not only have most red states refused to expand Medicaid or set up their own exchanges; some have also barred public employees from helping with enrollment and established stiff licensing requirements for “navigators,” designed to deter private groups from offering assistance. The ACA did not create any federal capacity to offer direct, in-person help with sign-up and payment arrangements to the many un-insured who have limited education and no bank accounts. So, in the red states, ideological opposition and deliberate political sabotage, the incompetent rollout of Healthcare.gov, and the limits of the ACA may keep enrollment far below expected levels.

To be sure, the ACA was supposed to spur broad enrollment through the “individual mandate”—the penalties for failing to buy coverage. But the penalties for 2014 are relatively small, the government has little power to enforce them, and the administration never mentions them in publicizing the law for fear of intensifying the backlash against it.

Ever since 2010, Republicans have been promoting that backlash, often with outright falsehoods; like gunmen firing wildly, they have finally scored some damaging hits. Just as Healthcare.gov was crashing, insurers announced cancellations of many individual policies that do not comply with the law’s minimum requirements, and Obama had to apologize for saying if you liked your plan you could keep it.

But for the law itself, no apology is necessary. For years, without a murmur from Republicans, millions of people with individually purchased policies have had their policies canceled because they got sick. Those policies were never insurance in the true meaning of that term. Under the ACA, insurers cannot price coverage or cancel it on the basis of an individual’s ill health. The gain in personal security will be enormous, even if the change in the market’s rules creates transitional problems and raises premiums for some healthy people because the insurance pool includes more of the sick. Next year, they may get sick too.

With a more competent rollout, the administration could have minimized these concerns; instead, it has magnified them. I’d be more confident about the future except for a little-noticed announcement just before Thanksgiving. The start of open enrollment in the exchanges for 2015 has been delayed until November 15, 2014, eleven days after the midterm elections. Apparently, when voters go to the polls, the administration doesn’t want them thinking about health insurance. And that tells me it’s worried that low enrollment in 2014 may raise premiums for next year.

Comments

Has anybody tried to come up with a figure for those already in the individual market for health insurance, many of whom are seeing a significant benefit from the PPACA even though they're not technically "newly insured"?

I am an individual holder. My plan is up 35% since 2011 due to Obamacare. That is a direct quote from my insurer. Furthermore-I was able to extend to Dec 2014 at another 20% increase so as to avoid the Exchanges, however in Dec 2014 I have no choice. I got on an Exchange and checked Bronze costs. They were 35% higher than even my latest cost estimate for 2014 AND my deductible was increased 50%. This is a disaster. My 29 year old son told me "No way" was he going to enroll. He said he'll pay the penalty and enroll if and when he needs it.

We have been insuring uninsurable property and drivers for decades using risk pools. The argument that it is necessary to restructure the entire healthcare system to address the uninsurable issue is another in the list bogus arguments for the ACA.

Obama lied and American healthcare died.............

"The relentless attacks on “Obamacare” by right-wing organizations and conservative media have probably also affected enrollment"

So, when bad laws are passed, the opposition's duty is to shut up and help prop it up lest it fail?

And here is the grand irony. The Democrats have engineered themselves into an exquisite Catch-22 situation.

The situation is that the more that they delay parts of ObamaCare , or selectively implement ObamaCare (to save their political skins) the more likely it is that healthy people will not sign up, which will guarantee the exact premise of this article (much higher premiums in 2015).

Obama has already delayed the corporate mandate once. He is now selectively enforcing the individual mandate. Democrats like Landrieu and Louisiana, Mark Pryor in Arkansas, and Kay Hagan in North Carolina are all promising to "fix" ObamaCare.

But their fixes, while lessening the pain of ObamaCare on people who would otherwise endure financial hardship, let people either not enroll, or enroll in policies that do not contribute as much to the subsidies. So all of the Democrat fixes to ObamaCare serve to undermine both the core premise of the law (healthy people subsidizing sick people) and to undermine the finances of the law.

In summary all attempts to lessen the pain of ObamaCare upon those upon it inflicts pain lead to higher premiums in 2015 and the ultimate self-destruction of ObamaCare.

Just goes to show you what happens when a bunch of arrogant liberals (sorry that was redundant) attempt to take over an industry that provides one of the most important services the people buy.

Oh, and by the way. Delaying the open enrollment period for 2015 to after the November 2014 is not going to save the skins of the liberals who voted for this mess. That is because the insurance companies have to (by state law) start notifying existing policy holders of the 2015 premiums as early as July 1st 2014 (this varies by state).

So many errors in so little space. How does he do it???

NONE of the exchanges worked well from the beginning. Not a single exchange met it's sign up goals. And there are now more uninsured than prior to implementation.

Please explain how it's "sabotage" to abide by the law? Not setting up an exchange is clearly an option provided for in the law. The knuckleheads who designed the law thought they could coerce the states into creating exchanges with the Medicare funding carrot. However, that funding disappears in 3 years and the governors who refused the bait will be seen as prescient then. And requiring strict licensing for Navigators who will be handling extremely sensitive private health and financial information is a bad thing? Democrat states are hiring felons!

You state that for years "millions" have had their policies cancelled when they got sick. Total unmitigated nonsense. HIPAA prevents that AND provides the mandate that you can get insurance with a pre-existing condition.

It is not "criminal" or against the law to not buy insurance as you imply. The law and the SC state that the "tax" is optional and LEGAL because it's optional. Every citizen has every right to NOT BUY insurance and pay the tax. That is a LEGAL choice.

You state that Republicans are somehow perpetuating a "falsehood" that Obama lied about keeping your plan and your doctor. He did. It's irrefutable. He knowingly lied about it. On purpose, knowing the law had NO CHANCE if he didn't. Nice ethics there.

And I can't wait for insurers and small, mid, and large sized employers to start sending out their cancellation notices prior to the 2014 elections as so many of those plans will ALSO not meet Disastercare's ridiculous minimum standards. WHOOOOO boy. Wait until those start landing in mailboxes.

Generally, younger people are (1) healthier and (2) earn less income than people aged 40-60. Both supporters and critics of the ACA agree that plan will confront tough sledding if the bulk of the enrollments are people aged 45 and above. The ACA embodies a sort of perverse income redistribution, compelling the younger and less prosperous to cover the medical expenses of the older and more prosperous.

ObamaCare is affecting the wallets and pocketbooks of millions of Americas directly. It is raising premiums and removing Doctors. It is eliminating favorite Hospitals. In short, it is attacking people who normally don't think about how government actions affect them. It will be very ugly for democrats. My new ad blitz for Republicans in 2014: Open with a photo of Democrat Senator ( say Pryor of Ark.) alongside Obama, Ried and Pelosi. Superimpose the line "They all said you could keep your Doctor and HealthCare Plan. They lied. Now vote Republican and FIX this mess!" That should do it!!

funny how most of the posts in this comment section are now using ACA, instead of obamacare, as if on cue by the administration that their is a need to rebrand this train wreck.

Personally a friend told me that if you don't like obamacare, then CACA might be better, as in can't afford health care.

ObamaCare includes so many taxes that it's hard to keep track, but one of the worst took effect on Jan. 1. This beaut is a levy on health insurance premiums that targets the small business and individual markets.
At $8 billion in 2014 and $101 billion over the next decade, the insurance tax is larger than ObamaCare's taxes on medical devices and prescription drugs combined. The Internal Revenue Service classifies the tax as a "fee" but it functions like an excise tax on premiums. The IRS collects an annual flat amount specified by the Affordable Care Act to be allocated among the insurers according to market share.
Guess what this will do to hiring and thus unemployment? Crate it! Then take a wild guess what it does for the Economy? You guessed it! another smoking crater!
All of this will be perfectly timed to destroy Democrats in 2014 and 2016. Thanks Obama!

It's established that Obama lied about his signature healthcare plan. Here's something else he doesn't want publicized:

Young, healthy men will see higher premium increases than their female counterparts. This is true despite these facts:

Young men go to the doctor far less and cost their insurers far less than do young women, even factoring out women's reproductive-related visits.

Young women will have more nonreproductive-related preventive services than young men. Check that out at healthcare.gov/what-are-my-preventive-care-benefits/#part=1

In short, men will get fewer benefits than women after being forced to pay a bigger premium increase. That's how Obama will uphold his promise to eliminate "premium discrimination against women."

The crafters of Obamacare saw real discrimination against men as the safest way (because "men don't protest and they don't matter anyway") to largely pay for their healthcare program. See http://ideas.time.com/2013/08/23/women-should-pay-more-for-health-care/

If a law required women to pay the same as men for auto insurance, the streets would be over-run with angry protesters of both sexes.

Democrats always know which gender of the ox to gore.

"Two takes on Obamacare’s discrimination against men"
malemattersusa.wordpress.com/2012/03/18/does-obamacare-discriminate-against-men/

"Men Likely to Put Off the Doctor (Male Matters: Or: why men are charged less for health insurance)"
malemattersusa.wordpress.com/2012/08/04/men-likely-to-put-off-the-doctor-male-matters-or-why-men-are-charged-less-for-health-insurance/

"Who will pay more? Gender discrimination in health insurance costs"
malemattersusa.wordpress.com/2012/06/19/a-brief-note-on-gender-discrimination-in-health-insurance-costs/

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