It's a very big day for American health care: Today, the health insurance exchanges called for by the Patient Protection and Affordable Care Act—a.k.a. Obamacare—open for enrollment, offering coverage that kicks in at the beginning of next year.
The exchanges are the core component of the largest and most transformative overhaul of the U.S. health system in decades, and the vehicle for the law's massive expansion of health coverage. And yet, despite the fact that Obamacare has been law since 2010, no one knows quite what to expect as these government-run insurance marketplaces open for business.
Critics have warned of disaster, pointing to a slew of delays and technical troubles with the exchanges, and Congress has allowed the federal government to enter a partial shutdown as a result of conflict over the health law. Supporters of the law have promised that Obamacare will usher in a new age of widespread affordable coverage. But even President Obama has admitted that the rollout won't be without its "glitches and bumps."
Over the last week, I asked a half dozen conservative and libertarian health policy experts what to expect from Obamacare in the coming days and months, and in the years beyond. Here's what they told me. (Quotes have been condensed and edited for clarity.)
On Opening Day
James Capretta, Ethics and Public Policy Center Senior Fellow and Former Bush Administration Health Official: "On October 1, you're going to see a very uneven beginning to the program. Some states are going to be largely ready to go and have a big presence on the ground to get people signed up. And then in some states, literally nothing's going to happen for a while. There may be a start up process on Oct 1, but there aren't enough people on the ground to know to actually do anything about it. So, I don't think there will be much enrollment in the early days or weeks. You're going to have a very uneven regional aspect to this, where some places it's up and going and some places it's literally it's a dead stop still."
Michael Cannon, Cato Institute Director of Health Policy: "When it takes full effect in January and all 50 states start to receive those subsidies, you're going to have millions and millions more people dependent on government health insurance. And you're going to have an industry receiving an even larger chunk of its already bigger revenue stream from the government, either directly or indirectly through implicit taxes. So if Obamacare takes full effect, it will vastly expand the constituency for higher taxes and greater government spending on healthcare."
Devon Herrick, National Center for Policy Analysis Senior Fellow: "I'm not sure if anyone really knows what to expect. But what we wonder about is that the administration—and the insurance companies as well—is very concerned that when the exchange is opened the only people who will be lining up for coverage will be the early retirees, those who have preexisting conditions. And of course to keep the Affordable Care Act premiums affordable the administration and architects, their goal was to get those healthy young invincibles—people who have few health needs that are willing to spend more than their expected cost—so the older, less healthy people could get coverage at a price they can afford and would like to pay. That's going to be a reach. A lot people are afraid the healthy folks may not want to enroll and pay more than their costs should be or would be otherwise so that someone else gets a better deal."
On Health Insurance and Premiums
Avik Roy, Manhattan Institute Senior Fellow and Romney Campaign Health Adviser: "Although there will be rate increases across the board under Obamacare, the biggest rate increases, and the rate increases that we're focused on here, are rates for people who shop for coverage on their own… Obamacare supporters excuse the rate increases, saying, well there's going to be subsidies and everyone will get subsidies so it doesn't matter that Obamacare drives up the underlying cost of healthcare. That's just not true on multiple levels. Subsidies aren't free. Taxpayers pay for them. They don't just magically fall from the sky. The subsidies really only benefit really poor people. Yes, there are a lot of middle class people who are eligible for subsidies, but the scale of subsidies that are available for people in the middle class and lower middle class as opposed to truly poor are relatively low and won't compensate for the dramatic increase in health expenditure and health insurance premiums people will see."
Devon Herrick: The Department of Health and Human Services released a report saying average premiums would be around a hundred bucks for the cheapest bronze plan for 27 year olds who make about $25,000 per year. What I noticed about that was that young people who are making about $25,000 a year—even after the subsidy, that's an iPhone data plan payment. And some of those may think the iPhone data plan is more important than the coverage for a bronze plan that wouldn't really help them necessarily with what they need, which is an occasional doctor's visit.
Tom Miller, American Enterprise Institute Resident Fellow, Former Senior Health Economist with the Joint Economic Committee: "We have all kinds of projections about what the enrollment mix will be. People are just guessing on that front. There's no airtight result on that. And that'll make a big difference in terms of what will end up being the premium results."
Michael Cannon: "The safe money is that it's going to increase the number of people with healthy insurance. But it could also decrease the number of people with health insurance as more people figure out, hey I can game the system, I can wait until I'm sick to buy insurance."
On Implementation Challenges
James Capretta "Comparisons [between Obamacare's rollout and Medicare Part D] are not very useful in the sense that the Medicare program already had an ongoing, direct relationship with its beneficiaries because of the rest of Medicare. They already knew who these people were. They had a communication structure already built to communicate with the Medicare beneficiary population through various means. They were able to build this infrastructure on the foundation of an ongoing communication relationship. There is no such foundation for the implementation of this law. Most of the people they're trying to reach are not connected to any kind of government benefit or system. They're trying to bring them into a system with which they'd have no existing relationship with. That's an entirely different proposition. It's much, much, much harder."
Avik Roy, Manhattan Institute Senior Fellow and Romney Campaign Health Adviser: "There's been a lot of wishful thinking both on the partisan right and partisan left about how Obamacare will play out. The wishful thinking on the left, we know, is Obamacare will be all puppies and unicorns and dandelions for everyone. The partisan thinking on the right is that it's going to collapse under its own weight, it's a trainwreck, it's a complete disaster, it's going to fall apart and die. None of those things are going to happen. The truth is, unfortunately, something in the middle, which is to say the law won't work as advertised, but it won't go away either."
Michael Cannon: "There are now three lawsuits that have been filed to block subsidies in 34 states that decided not to establish an exchange. If the plaintiffs get a favorable ruling, if they get a preliminary injunction that says the IRS cannot implement that rule, the challenged rule, then there's can be no subsidies in two-thirds of the states. So what that means is all these predictions of rate shock are going to be even worse because you won't have subsidies available to offset it."
On Public Perception
Yuval Levin Editor of National Affairs and Former Bush Administration Health Official: "I think it will take time to see how things are shaping up and what the public's mood about it is, and that a Republican alternative that makes a serious dent in the uninsured is a must. But the public is walking into the Obamacare experiment with enormous—almost unbelievable—skepticism about it, the early going looks likely to be kind of rough, let alone the more structural problems beyond….My sense is the politics of this don't get much easier in the near term. That doesn't mean repeal is ever easy, but it could plausibly point the way for a Republican 2016 nominee making a replacement key to his domestic platform."
Avik Roy: "Contrary to some pessimists on the right, I think the law will continue to be unpopular, in fact the unpopularity among people who aren't beneficiaries of the subsidies may very well increase, because they're going to get their bills, they're already starting to get their invoices and notices from insurance companies talking about their rates going up. Now their rates, deductibles, and cost sharing are going up, and their benefits are going down. So, people are pretty unhappy about it, and that's something the administration won't be able to spin."
James Capretta: "The real issue is how is this law perceived by the public, the voters, 18 months from now, two or three years from now. I think it's going to feel a lot like the connector in Massachusetts. Nobody really wants to go on the connector unless they have to. I think the same may end up being true of the exchanges around the country. It may not be quite so popular in the initial years as the proponents of the law are hoping, so you may have low enrollment."
On Health Care Quality and Delivery
Michael Cannon: "It's going to reduce rather than improve the quality of care, because you're going to take whatever incentive insurance companies already have to skimp on care for the sick and blatantly increase those incentives….Insurers are keeping premiums down by tightening up their networks, not letting enrollees go to expensive hospitals. I would stress that this is one way insurers could avoid the sick. This is one way they can make themselves unappealing to the sickest patients. That's exactly what the supposedly popular and humane preexisting conditions provision forces insurance companies to do. It forces them to compete to avoid the sick."
James Capretta: "If you look at the plans that are being offered on the exchanges, they look and feel a lot like Medicaid—a sort of Medicaid Plus."
Tom Miller: "We transformed health competition into political competition rather than economic competition. It's the old symbiotic relationship, the subservient trying to get their marginal advantage from a highly politicized government."
Yuval Levin: "The damaging effects on the underlying health system mean that any kind of move in a market direction becomes more and more difficult every day."
Devon Herrick: "For those people who don't have access to employer coverage, Medicaid, or Medicare, [Obamacare allows them to] get, in many cases, highly subsidized coverage in a health insurance exchange. And in many cases the subsidies are far greater than what they could get through their job, especially for the low income or moderate income families. So there's this perverse incentive for especially small firms who wouldn't have to pay a fine [if they didn't offer coverage], but also larger firms to try to find ways to shed their moderate income workers and spin them off into small firms and just contract for their services….Over time, beginning now, we'll begin to see a restructuring of the labor market among high wage and low wage firms, small firms, simply to take advantage of these subsidies."
Yuval Levin: "I don't think people have paid enough attention to how important the employer mandate was in the Congressional Budget Office's 10-year calculation of the cost of the law. It is hugely important. That is the reason the mandate was created and was designed as it was. In 2009, CBO scored a version of the Senate Finance Committee bill that didn't include an employer mandate, and it came in much too expensive for the Democrats and didn't cover nearly enough people."
On the Long View
Tom Miller: "Things get calcified. Things get put into law and they get harder to take out of law. The thing that's always bothered me the most about this, which we don't pay much attention to, is you get to a point down the road where even if you could hypothetically turn some of the [policy] levers, the industry around it has changed….When things go bad and there's screw ups and a lot of negative consequences, you can ride that and begin to cut back what's already there. But you never get to challenge the core premises that launched this."
James Capretta: "In the long run, if the law stays in place, of course it will reach some kind of equilibrium that's not in place today. That would have to be the case if it's going to be in place for a long period of time—some equilibrium will show up. That doesn't mean it wouldn't be contentious or front and center in our politics. Look back at the last 30 years, budget negotiations, healthcare has been at the center of those fights already. It isn't the biggest issue, but it's right behind taxes."
Avik Roy: "If we want to think about how to reform the system in the future, it's going to be really important for conservative and libertarian thinkers to really galvanize which states perform well and which perform poorly, so we can learn what are the kinds of regulatory incentives and policy incentives that different states have imposed on the market and how are insurers and consumers responding to that. I think that we'll find that there are lessons we can draw that we can use to deregulate and liberate people from under this law and once again offer people high quality affordable healthcare, which is what they're lacking under Obamacare."
Yuval Levin: "I think the political problem for the Democrats is that by doing this on their own, they have taken ownership of the American health care system, which is a system that a lot of people don't like and will probably like even less in the next few years. The promises on which Obamacare was sold—universal coverage, lower premium costs, lower government costs—are not going to be kept."
Tom Miller: "Like most exercises in public policy, we're likely to get disappointing results, but not disastrous ones."