Obamacare Supporters Begin to Prepare for the Coming Train Wreck



Obamacare's backers and critics increasingly seem to agree that the president's health law is in for a rocky start. Last week, The Washington Post's Ezra Klein wrote that he expects that, although the law won't turn out to be a catastrophe, "the Affordable Care Act will have a much tougher first year than was initially anticipated." This week, another prominent supporter of the law, The New Republic's Jonathan Cohn, writes that Obamacare isn't "going to work as well as many of us would like, and the initial adjustment may not be easy."

Cohn goes on to argue that despite some startup troubles, the law is still worth it, and won't turn out to be the "huge train wreck" that Sen. Max Baucus, one of the legislation's authors, recently warned was on the horizon. But even Cohn admits that there are likely to be a fair number of troubles along the way.

Here, for example, are just a couple of the details that Cohn gives readers.

Building and running the exchanges is going to be very difficult: "A well-functioning exchange also requires seamless, near-instant communication between the federal government (which is in charge of the tax credits) and the states (which run Medicaid and, in at least some states, will be running the exchanges). That's a substantial information technology challenge, particularly since the security needs to be ironclad. Even the states most committed to the new law, and with the best resources for doing so, have struggled with this. In conversations over the last year, I've heard the phrase 'white knuckles' more than once. You can imagine what it's like in states where officials are ambivalent."

The exchange technology probably won't work smoothly at first: "Chances are good you're going to hear stories about people who went online to get insurance—and got sent, electronically, to the wrong place. You're probably hear about people frustrated that the electronic forms are so complicated to fill out. You're going to hear about employers confused about what the law requires—and, in some cases, trying to game the new system."

Large numbers of people will see higher premiums: "Come the fall, when people start shopping for coverage on the exchanges, some of them will see higher prices than they've seen before. Partly that's because people with lousy insurance will finally be getting decent insurance; the price will be higher but the coverage will be more comprehensive. The other source of sticker shock will the end of discrimination based on medical condition. That will mean lower premiums for people who suffer under this system—namely, the old and the sick. But it will also mean higher premiums for people who benefit under this system—the young and the healthy."

The premium hikes may be high enough to undercut the law's expected coverage expansion: "Insurers are just starting to submit their bids for next year. And some of the numbers you're hearing sound scary. Last week, for example, CareFirst in Maryland requested rate increases that will average 25 percent. The danger of high rates isn't simply that they would be difficult for many people to pay. It's that they would keep healthy people—particularly, young healthy men—from buying insurance. These folks might opt instead to pay the penalty for carrying no coverage, thereby causing higher rates for everybody else."

Obamacare won't control high health care costs: "Obamacare is supposed to help even the presently insured—not simply by providing a safety net in case they lose their jobs, but also by reducing the cost of health care overall. This is the other common complaint you hear about Obamacare: That it didn't 'solve' the problem of higher health care costs. This is absolutely true, particularly given the many concessions the architects of reform made to the health care industry."

Despite all this, Cohn still seems to believe that the law will eventually prove both workable worthwhile. And so do others. Cohn references a Journal of the American Medical Association piece about what to expect from the law's rollout. That piece looks back to the startup problems involved in both the Children's Health Insurance Program (CHIP) and Medicare Part D, and suggests that after a transition period, the law will work out most of the early kinks. Yet the JAMA piece also cautions that "the ACA faces all of the same challenges as these other programs and some additional ones unique to its structure and circumstance," noting that Obamacare is "one of the most complex government programs created in decades." Similar to Cohn's piece, it says that there will "undoubtedly be technical glitches in the eligibility and enrollment systems," that "some people will see their premiums increase," and that other people may "perceive their deductibles and co-pays as unaffordable."

Does this sound like something that has the potential to be a "huge train wreck"? I'll leave that to others to decide. But at the very least, it sounds as if the Obamacare implementation process is in for a derailment or two.