Obamacare Might Well Be Imploding
The disastrous rollout of the federal insurance exchange could spell doom
By all accounts, the roll out of Obamacare's insurance exchanges has been a fiasco of epic proportions. But diehard supporters claim that this is a minor roadblock that won't affect the law's long-term future. "Obamacare is here," lectured liberal columnist Eugene Robinson. "Get used to it."
Robinson might be right. Then again when funny man Jon Stewart echoes Tea Party "wackos" to demand a one-year delay of the individual mandate, the lynchpin of the edifice, you know all is not well. And Stewart is hardly alone. CNN anchor Wolfe Blitzer is also recommending a delay.
The reality is that the way President Obama ramrodded this law through Congress has left him very little margin for error. The next couple of months will make or break the program.
Two weeks into the launch and its problems only keep multiplying. Consumers still can't log into the federal exchange website, let alone compare plans, apply for the promised subsidies and buy coverage. The site—whose staggering $634 million construction cost is more than that of LinkedIn and Spotify combined—has already been shut down once for repairs, but the problems persist.
Thing are so bad that the administration won't even reveal basic information about enrollment rates. Nor will it make its IT folks available to explain the technical glitches, insisting that "pent up demand" is overwhelming capacity.
But experts whom Reuters consulted believe that the architecture of the websites is fundamentally flawed and needs to be radically overhauled. For example, when individuals "apply" for coverage, the website automatically opens over 90 separate files and plugins to stream information from the user's computer. The flood of traffic paralyzes the connection.
None of this is unexpected. In fact, insurance companies now say they'd been warning the administration for months that the exchange was not ready for prime time.
But the same reason the administration rushed to launch is also why it can't afford any extended delays now.
The law requires every American to have coverage by sometime early next year, although the administration keeps changing its mind about the precise date. But failure to have coverage by whatever date it eventually decides would result in a $96 fine for individuals and $285 for families. But extracting fines without giving people viable purchase options will generate even more outrage against a law that a majority of Americans already dislike.
However, postponing the individual mandate is not an option either, even though that would be the right thing to do given that the administration has delayed the employer mandate. That's because insurance companies need young and healthy people in the pool to offset the costs for the older and sicker patients that they are now required to cover at affordable rates. Suspending the mandate will mean that their most lucrative customers will bow out, making it impossible for them to honor the premiums that they are offering without going under. This could jeopardize patients far beyond those in the exchange.
But if the law ends up raising prices and/or throwing people out of coverage—the exact opposite of what it promised—Republicans will obtain potent ammunition against Democrats ahead of next year's mid-term elections. And not just Republicans.
The New York Times reported over the weekend: "Even some supporters of the Affordable Care Act worry that the flaws in the system, if not quickly fixed, could threaten the fiscal health of the insurance initiative, which depends on throngs of customers to spread the risk and keep prices low."
(At this rate, Jon Stewart and Ted Cruz might both find themselves marching together to defund Obamacare!)
So long as President Obama is in the Oval Office, Republicans can't repeal the law outright, it is true. But its implosion will put them in a far stronger position to hold it up pending an overhaul. It could be their great opportunity to convert it into a free market system, as I have noted previously. (Richard Epstein has laid out his own three-part overhaul plan.)
It is never a good idea for a president to drag a country into war without broad-based support. That's because he needs political cover to stick it through when things inevitably go wrong.
What's true of war is even truer of a radical overhaul of one-sixth of the domestic economy. President Obama ignored that and pushed Obamacare without doing the hard work of putting together something that the other party could support. Now he can hope for no cooperation, only full-bore obstructionism.
Obamacare's problems ultimately are not technical but political—and they might be just beginning.
A version of this column originally appeared in the Washington Examiner.
