Category Health Care

Could Obamacare’s Failure Lead to Single Payer?

Danny Vinik Leave a comment

Ezra Klein and Ross Douthat have both written pieces recently arguing that the failure of the Affordable Care Act could lead towards a more liberal form of universal health care. The idea goes that if HealthCare.gov doesn’t become feasible, people will begin looking at which parts of the law were successful and which weren’t. The Medicaid expansion has thus far been a success in the states that have expanded. Government-run online marketplaces? Not so much. That’s a problem for conservatives, because many of their leading health care plans would require those online marketplaces. If those are deemed a failure, what’s their next proposal? Meanwhile, the liberal fantasy – Medicare for all – is much closer to the Medicaid expansion. The appetite for universal healthcare would still exist and now single payer would be the clear solution. Klein and Douthat both see this as a distinct possibility. Is it?

There are a couple of reasons to be skeptical.

First, if Obamacare fails, it’s going to hurt Democrats badly. Time and time again House and Senate Democrats have thwarted government opposition to Obamacare. They’ve refused to defund or delay the law or the individual mandate. Republicans, of course, have done the opposite. If the exchanges don’t work, Republicans will earn major points with voters. This has been the leading battle for years now. Democratic candidates will have a lot of trouble fighting off attacks that they stuck with a partisan, unpopular law only to watch it collapse under its own weight once enrollment began. Like Klein, I don’t believe many things affect elections. This would.

Second, Klein and Douthat’s argument assume that Americans will be able to distill HealthCare.gov’s failure from the other parts of the law. Will they understand that the Medicaid expansion succeeded while the complex public-private partnership that created the exchanges failed? It’s not clear. Klein is one of the leading proponents that Americans don’t follow politics closely. They don’t know what’s going on in D.C. Obamacare’s failure would be a big story. But would it be big enough for people understand the causes of it? The CBO projects that only seven million people will sign-up on the exchanges next year. They will all undoubtedly see the website’s issues, but the vast majority of people will never try to login to HeathCare.gov. They may hear that Obamacare failed without knowing the causes.

Third, many Americans may see Obamacare’s failure as symbolic of government’s inability to regulate the health care market. Whatever the causes, Americans may conclude that getting government involved in the health insurance industry is a bad idea. They won’t spend much time thinking about why Obamacare failed and simply decide that enough government disruptions in the health care market.

Klein and Douthat’s argument is not impossible. Maybe Americans will be clamoring for single payer if the exchanges fail. But there are also a number of reasons why that won’t be the case. Klein and Douthat give Americans a lot of credit for understanding the root causes of Obamacare’s failure, evaluating the competing conservative and liberal health care ideas and using the Obamacare analysis to guide their decision-making. I believe most Americans will think more simplistically and see Obama’s failed law as nothing more than a failed program epitomizing the government’s inability to regulate the health care market. Let’s hope that the administration can get the exchanges working and we never have to find out.

Delaying Obamacare May Be Necessary To Save It

Danny Vinik 1 Comment

There are a couple of new stories out today that give more details on the troubles of HealthCare.gov, the federal health exchange. It’s a mess. From a New York Times article today:

Administration officials approached the contractors last week to see if they could perform the necessary repairs and reboot the system by Nov. 1. However, that goal struck many contractors as unrealistic, at least for major components of the system. Some specialists working on the project said the online system required such extensive repairs that it might not operate smoothly until after the Dec. 15 deadline for people to sign up for coverage starting in January, although that view is not universally shared.

That’s the worst case scenario and it looks like it may be the most likely one too. Starting January 1st, the individual mandate takes effect. That means that millions of Americans must sign up for health insurance before then. The law gives everyone a three-month grace period, but because of processing delays, you need to purchase insurance by Feb 15. After that, you’ll have to pay the prorated fine of either $95 or 1% of your income for not having insurance. That’s why that February 15 date is so important. What happens though if you spend months trying to sign up for Obamacare, but the website doesn’t work properly? Surely, the federal government can’t force you to pay a penalty for its failure. Without changes to the law though, we’re heading that way.*

The Obama administration has been adamant that it will not delay either the law or the individual mandate. It does not want to give any more time for Republicans to attempt to dismantle it, but time is running short. What happens if in a month, the exchanges are still not working? Will the administration have the political courage to stand up and say we need more time? Will Republicans allow a delay?

There’s another important point here: we can’t only delay the individual mandate. It shocks me how many conservatives have pushed for an individual mandate delay. That would eliminate the stick meant to bring young, healthy people to the exchanges to offset the influx of old, unhealthy people. It would likely bring about the dreaded death spiral where too many old, unhealthy people sign up for health care forcing insurance companies to raise premiums, which then scares away the most healthy people and forces insurance companies to raise premiums again and so on. The entire point of the individual mandate is to force those young people on to the exchanges. Without them, the law will fail.

As that February 15 date approaches, Republicans will see the political value of calling for an individual mandate delay. Imagine how easy it will be for any GOP congressmen to argue that the federal government is going to fine you for the failure of the exchanges. It’s a perfect talk point. Simple, easy to understand, and dead right.

That’s why the administration needs to get out ahead of this. If there is a decent probability that the exchanges won’t work in December, it’s time to take HealthCare.gov down and give the contractors an extra 3-6 months to work on it. The longer they wait, the worse it will look politically and the greater the chances that political pressure from the right will stop the law before it has a chance to get going. In the end, Democrats have control of the Senate and White House. If Obamacare is delayed until June, the Republicans will still have no leverage to attempt to stop it. Only Obama and Senate Democrats have the power to block the law. For the past two years, using that power to defeat the GOP’s attempt to undermine Obamacare was vital. Right now though, it’s looking more and more likely that the opposite is true. The greatest threat to the Affordable Care Act is no longer the Republican Party. It’s the law itself. Democrats need to start looking at that power as a way to save Obamacare, not a way to thwart the opposition.

*Thanks to Adrianna McIntyre for helping clear up some mistakes I made about the timing. Important date is February 15 for signing up for health insurance and avoiding the penalty, not December 15,

The Obamacare Fight May Not Be Over

Danny Vinik Leave a comment

Yesterday, Steve Benen wrote a post titled, “ACA repeal crusade over, ‘delusional folks notwithstanding’.” Here’s part of it:

Last year, Republican officials up and down the ballot argued the 2012 elections were the party’s last chance to derail the Affordable Care Act. Once they lost those elections, Republican officials declared, “Never mind what we said before; this budget fight really is our last chance to derail the Affordable Care Act.” And now they’ve lost this round, too.

There won’t be a third. The repeal crusade was a flop.

Sure, it’s possible congressional Republicans will vote a few more times to gut the law — at last count, I think we’re up to 46 repeal votes in the House — but it’s slowly dawning on the party that their dream will not be realized.

They can try to go through the motions in the months and years ahead, but it’s more likely to create eye-rolling than results.

I’m so tempted to agree with Benen. The law has been through so many challenges the past couple of years that it is just about set in stone. But I see one more possibility for how Republicans could derail it:

We’re two weeks into the open-enrollment period for Obamacare. This period lasts until March 31 and it’s the time when individuals can sign up for health insurance on the exchanges. On January 1st, Obamacare goes live and those health plans kick in. That’s when the law really starts. Right now, we’re still in the sign-up phase. So far, that sign-up phase has been an unmitigated disaster. If you’re an Obamacare supporter, you should be very, very concerned. By all accounts, the flaws in the online exchanges aren’t a result of traffic overload or glitches. They are much more systemic and widespread and will require a huge amount of work to get them operating properly. The Administration still has a lot of work to do.

In addition, the government shutdown has masked these problem. Some people think the problems are actually a result of the shutdown, which isn’t true. Once we’re past these fiscal fights, the media’s attention will turn to the mass problems with the exchanges. People will start realizing that there are serious issues here.

The question is how long they will last. If December comes and there are still issues, the Administration should become very worried that people will start seriously turning against the law. Of course, it will have nothing to do with the policy behind Obamacare, but a technical failure can still switch public opinion fast. If people lose faith that the government has the capability to implement it. they may give up. Imagine January 1st coming and people still having trouble signing up on healthcare.gov. That would be a colossal failure.

Two weeks after that, the continuing resolution in the Reid-McConnell plan expires. This would give Cruz and Co. yet another chance to try to spur grassroots support and demand a delay in Obamacare in exchange for funding the government. That plan blew up in their faces the last couple of weeks, but the Tea Party would have a lot more support this time around. Independents may start looking at those demand as reasonable if the exchanges are still having major troubles.

This is the final challenge for Obamacare: does it work? For months, the focus has been on rate-shock and whether the policy would help most Americans. Few people wondered whether the exchanges would actually function correctly. Now, that question is at the forefront of the debate. Under normal circumstances, a Democratic president and Democratic Senate would ensure that the law has plenty of time to work out its kinks, well past January 1st if necessary. They would accept the bad media coverage and keep working on healthcare.gov until they got it right. But the McConnell-Reid deal presents a potential opportunity for Cruz and the Tea Party to mount a grassroots effort that really could force the president to reexamine his greatest legislative achievement. It’s timed perfectly for Republicans to mount a serious challenge to defund or delay the law on legitimate grounds. The Administration ultimately controls the viability of this challenge, but the McConnell-Reid makes it possible. The Obamacare battles never seem to end.