When I wrote a few days ago about the “Continuing Obamacare Disaster,” I didn’t realize I was understating the problems with the President’s boondoggle scheme.
Now that the law’s been passed and implemented, the American people are finally finding out what’s in it (per Nancy Pelosi) and they’re not happy.
Indeed, they’re so unhappy that our overseers in Washington are scrambling to mitigate the political fallout.
The Wall Street Journal opined today on the meaning of President Obama’s announcement.
In a major political reversal, the President announced at a surprise press conference that he is suspending the regulations that he now admits are the reason that millions of health insurance plans have been terminated. …Now these mass cancellations are proving to be unpopular, and Democrats are panicking, so Mr. Obama is offering a temporary stay of execution. …There is less reprieve here than Mr. Obama claims. It’s hard to un-cancel insurance. The rules Mr. Obama is repudiating were written in 2010, and insurers have been adapting to them for years. They will now have to scramble to revive the policies they can while throwing all of their actuarial assumptions out the window. The faux reprieve also lasts for only one year and applies only to anyone who was covered in 2013.
But even that’s not the full story. Here’s more of the editorial.
The burden will also now fall on state insurance commissioners to decide if they want to try to reapprove old plans, or something similar to the outlawed products. But even the insurers that want to exercise this option will need to resuscitate plans in a mere six weeks. The first they heard about the President’s “fix” was at the press conference. …Such regulatory rewriting is also probably illegal. The Administration claims it has “enforcement discretion” to suspend the regulations. But like the employer mandate Mr. Obama also delayed for a year, their hard start-dates are defined in the statute—January 1, 2014. The black-letter law of the Affordable Care Act does not say the rules apply whenever they are politically convenient.
Megan McArdle also thinks the White House is brazenly disregarding legal requirements.
The administration is not changing the rules, just declining to enforce them against the insurers. This is becoming a pattern: Obama’s position on the law seems to be that it’s his law, and therefore the law is whatever he and his appointees say it is. That’s dangerous for all sorts of reasons.
Keep this going and we’ll eventually be Argentina.
Though maybe this isn’t a bad thing. If I can somehow magically become President, I can use the Obama precedent to suspend bad tax law and to unilaterally decide to shut down a bunch of wasteful government departments.
Returning to the real world, Veronique de Rugy gives us a very important reminder in the Washington Examiner that this mess was entirely predictable because of the inherent incompetence and inefficiency of government.
Washington is missing the bigger picture of what the rollout glitches represent. That’s the much deeper problem of government intervention in general. …government-program incentives tend to favor interest groups instead of rewarding success or punishing failure in the same way as the market. …In sum, the problem with the Obamacare rollout is…that government institutions themselves are inherently prone to bad decision-making, often choosing the interest of politically favored groups. …In fact, we can expect these types of negative consequences when the government intervenes in any market — not just health care. For proof, look no further than the flawed government policies that distorted the health care system and prompted the push for Obamacare in the first place.
The final sentence is spot on. Our healthcare system was dysfunctional when Obama took office. But it was screwed up because of government intervention. So Obama’s plan to add another layer of government was a very painful example of Mitchell’s Law.
In reality, you don’t solve government-caused problems with more government.
But this brings us to the big issue of what happens next. The statists will argue that the failure of Obamacare means we need single payer healthcare, which means the government has full control of everything, like in the United Kingdom.
Needless to say, that would be a disaster. More spending and more taxes would be one obvious consequence, but it would also mean that politicians and bureaucrats would decide who lives and who dies.
If you think that’s an exaggeration, check out this horror story (as well as the other examples linked in the third paragraph).
For those of us who care about both taxpayers and good healthcare, we need to use the Obamacare meltdown as a springboard to push for policies that will actually make the system work better.
I actually wrote back in April that Obamacare wouldn’t work and that this would create precisely this opportunity. But making a prediction is the easy part (especially since I never remind people of the times when I make inaccurate predictions). The hard part is pushing the right policies and convincing the American people that we have the right ideas.
I’m a think tank wonk, so I’ll simply list the good policies.
As part of fundamental tax reform, we need to phase out the healthcare exclusion in the tax code – a perverse policy that encourages grotesque waste, inefficiency, and featherbedding in most parts of the medical industry.
If you want to get an idea of how a genuine market-based system would operate, watch this superb video from Reason TV. If you want more examples, here’s a report from North Carolina on free-market healthcare in action and here’s a similar story about capitalist healthcare in Maine.
More From the A.P.
Obama struggles to save his cherished health law
President Barack Obama’s health care law risks coming unglued because of his administration’s bungles and his own inflated promises.
To avoid that fate, Obama needs breakthroughs on three fronts: the cancellations mess, technology troubles and a crisis in confidence among his own supporters.
Working in his favor are pent-up demands for the program’s benefits and an unlikely collaborator in the insurance industry.
But even after Obama gets the enrollment website working, count on new controversies. On the horizon is the law’s potential impact on job-based insurance. Its mandate that larger employers offer coverage will take effect in 2015.
For now, odds still favor the Affordable Care Act’s survival. But after making it through the Supreme Court, a presidential election, numerous congressional repeal votes and a government shutdown, the law has yet to win broad acceptance.
“There’s been nothing normal about this law from the start,” said Larry Levitt, an insurance expert with the nonpartisan Kaiser Family Foundation. “There’s been no period of smooth sailing.”
Other government mandates have taken root in American culture after initial resistance. It may be a simplistic comparison, but most people automatically fasten their seat belts nowadays when they get in the car. Few question government-required safety features such as air bags, even if those add to vehicle costs.
Levitt says the ACA may yet have that kind of influence on how health insurance is viewed. “An expectation that everybody should have health insurance is now a topic of conversation in families,” he says.
That conversation was interrupted by news that the HealthCare.gov website didn’t work and that people with coverage were getting cancellation notices despite Obama’s promise that you can keep your insurance.
Obama maneuvered this past week to extricate Democrats from the cancellations fallout.
The president offered a one-year extension to more than 4.2 million people whose current individual policies are being canceled by insurers to make way for more comprehensive coverage under the law. This move by the White House was intended to smooth a disruption for which his administration completely failed to plan.
But it also invited unintended consequences, showing how easily the law’s complicated framework can start to come loose.
State insurance commissioners warned that the president’s solution would undermine a central goal of the law, the creation of one big insurance pool in each state for people who don’t have access to coverage on their jobs. Fracturing that market could lead to higher future premiums for people buying coverage through the law’s new insurance exchanges, which offer government-subsidized private insurance.
That Obama is willing to take such a gamble could make it harder for him to beat back demands for other changes down the line.
On the cancellations front, the president seems unlikely to break through. He may yet battle to a political draw.
Obama realizes it’s on him to try to turn things around, and quickly. In the first couple of weeks after the website debacle, Obama played the sidelines role of “Reassurer-in-Chief.” Now he’s on the field, trying to redeem himself.
“I’m somebody who, if I fumbled the ball, I’m going to wait until I get the next play, and then I’m going to try to run as hard as I can and do right by the team,” Obama said Thursday at a news conference.
Making sure the website is running a lot better by the end of the month may be his best chance for a game-changing play.
Although only 26,794 people signed up in health plans through the federal site the first month of open enrollment, 993,635 applied for coverage and were waiting to finalize decisions. For many it took hours of persistence, dealing with frozen screens and error messages. When states running their own sites are included, a total of 1.5 million individuals have applied.
The law’s supporters believe that’s evidence of pent-up demand, and so far the insurance industry agrees. Public criticism of the administration by industry leaders has been minimal, even though insurers also have been on the receiving end of the website problems. Compounding the lower-than-expected sign-ups, much of the customer data they got was incomplete, duplicative or garbled.
Insurers, eager for the new business expanded coverage would bring, are pressing the administration to clear a route for them to sign up customers directly. Such workarounds may put Obama back on track toward his goal of signing up 7 million people for 2014. Medicaid expansion, the other arm of the law’s push to cover the uninsured, signed up 396,000 people last month, a promising start.
With the website troubles, a national effort to promote insurance enrollments has been dialed down. Groups ranging from liberal activists and civic clubs to health promoters were mobilized and waiting. But there was little they could do. Advertising campaigns have been postponed. As the year-end holidays approach, both volunteers and the people they would be trying to reach have other priorities.
Whether enthusiasm among the rank-and-file supporters of the law will come surging back is one of the big unknowns for a president who has acknowledged the need to restore his credibility on health care.
“I think people have lost confidence in the ability of this working,” said Kansas Insurance Commissioner Sandy Praeger. “And we’ve still got the anti-Obamacare folks out there taking full advantage.” Praeger is a Republican who believes her state should have helped implement the law.
Skittishness among supporters was evident in the 39 House Democrats who Friday bolted their party to vote for Republican legislation on cancellations, ignoring Obama’s veto threat.
Politics is not the only consideration.
The people who are signing up now are likely to be those with unmet medical needs. Younger, healthier customers probably don’t see much reason to spend their time tangling with the website. To hold down costs, the law aims for a mix that includes a hefty proportion of younger enrollees whose medical expenses are low.
“Everybody said the website would be up and running the first day,” said Praeger. “The longer it takes, the more people are going to question whether this is going to work.”