…There’s no denying Republicans have had a horrendous couple of weeks. But as we’ve noted, Sen. Ted Cruz’s rationale for the futile effort to defund ObamaCare was his belief that once it got started, it would be successful, at least in political terms–that it would deliver enough benefits to enough people as to ensure its continued political support.
The current Beltway standoff will be evanescent, assuming it is resolved before it turns into a real economic crisis. ObamaCare will still be with us. Like an injection of morphine to someone suffering from a crippling degenerative disease, the diversion no doubt made the past two weeks more comfortable for the White House. But the underlying problem isn’t going away.
Klein does hold out hope that things will get better. After acknowledging off the bat that “so far, the Affordable Care Act’s launch has been a failure,” he qualifies the statement: “But ‘so far’ only encompasses 14 days. The hard question is whether the launch will still be floundering on day 30, and on day 45.” How about day 1,000? CNBC reports Aetna CEO Mark Bertolini “said it could take three years or so before the marketplace’s problems are fully sorted out.”
The more interesting question, it seems to us, is whether this is as good as ObamaCare gets. Klein’s acknowledgment of disaster, candid though it is, is limited in its scope. He addresses only the technical problems, not ObamaCare’s screwy economic assumptions.
ObamaCare promised a free lunch: universal (or near-universal) coverage at lower cost without any diminution of quality or choice. It’s a perpetual-motion machine. But even the Supreme Court can’t strike down the laws of physics. If a large number of people benefit from ObamaCare–itself a big if–somebody has to pay. Much of the burden was supposed to fall on young, healthy people, who frequently do not have medical insurance. To compensate for price controls on premiums for patients with pre-existing conditions, their premiums would be jacked up. Somehow higher prices are supposed to induce them to get insured.
Those who do manage to get onto the website and get insurance quotes are experiencing “sticker shock,” the Chicago Tribune reports:
Adam Weldzius, a nurse practitioner, considers himself better informed than most when it comes to the inner workings of health insurance. But even he wasn’t prepared for the pocketbook hit he’ll face next year under President Barack Obama’s health care overhaul.
If the 33-year-old single father wants the same level of coverage next year as what he has now with the same insurer and the same network of doctors and hospitals, his monthly premium of $233 will more than double. If he wants to keep his monthly payments in check, the Carpentersville resident is looking at an annual deductible for himself and his 7-year-old daughter of $12,700, a more than threefold increase from $3,500 today.
“I believe everybody should be able to have health insurance, but at the same time, I’m being penalized. And for what?” said Weldzius, who is not offered insurance through his employer. “For someone who’s always had insurance, who’s always taken care of myself, now I have to change my plan?”
The Washington Examiner has a roundup of other ObamaCare horror stories:
— Enormous rate increases. A research group found that a 30-year-old male nonsmoker “will see his lowest cost insurance option increase 260 percent.”
— Some who already buy their own insurance are receiving cancellation notices–and offers for expensive new policies. The Christian Science Monitor reported on a North Carolina family who had been buying Blue Cross and Blue Shield insurance for $380-a-month. “BCBS is offering them a new plan for three times the cost, $1,124.50 a month, still with an $11,000 deductible,” reports the paper.
— A California couple said that the Obamacare policy suggested to them included a 40 percent increase in their doctor’s office co-pay. “Our co-pay skyrocketed from 0 percent to 40 percent and the maximum out-of-pocket increased an additional $2,300,” according to a letter in the Fresno Bee.
Of course, some people will be eligible for subsidies, which creates its own set of perverse incentives. Kathleen Pender, a personal finance columnist for the San Francisco Chronicle, advises that “people whose 2014 income will be a little too high to get subsidized health insurance from Covered California next year should start thinking now about ways to lower it to increase their odds of getting the valuable tax subsidy”:
Take, for example, Jacqueline Proctor of San Francisco. . . . Proctor estimates that her 2014 household income will be $64,000, about $2,000 over the limit. If she and her husband could reduce their income to $62,000, they could get a tax subsidy of $1,207 per month to offset the purchase of health care on Covered California.
That would reduce the price of a Kaiser Permanente bronze-level plan, similar to the replacement policy she was quoted, to $94 per month from $1,302 per month. Instead of paying more than $15,000 per year, the couple would pay about $1,100.
If anything, ObamaCare’s technical problems have delayed its economic shock. That’s by design, Forbes’s Avik Roy argues:
Healthcare.gov forces you to create an account and enter detailed personal information before you can start shopping. This, in turn, creates a massive traffic bottleneck, as the government verifies your information and decides whether or not you’re eligible for subsidies. HHS bureaucrats knew this would make the website run more slowly. But they were more afraid that letting people see the underlying cost of Obamacare’s insurance plans would scare people away.
Even the New York Times, in a well-reported front-page story Sunday, acknowledged the administration cut corners in the website design for political reasons:
To avoid giving ammunition to Republicans opposed to the project, the administration put off issuing several major rules until after last November’s elections. The Republican-controlled House blocked funds. More than 30 states refused to set up their own exchanges, requiring the federal government to vastly expand its project in unexpected ways.
The stakes rose even higher when Congressional opponents forced a government shutdown in the latest fight over the health care law, which will require most Americans to have health insurance. Administration officials dug in their heels, repeatedly insisting that the project was on track despite evidence to the contrary.
Some pro-ObamaCare commentators, including at the Times, are still dug in. Former Enron adviser Paul Krugman asserted Sunday that soon “ObamaCare will be working fine.” And the day after that damning news story, columnist Bill Keller waved away the failure:
Unless you’ve been bamboozled by the frantic fictions of the right wing, you know that the Affordable Care Act, familiarly known as Obamacare, has begun to accomplish its first goal: enrolling millions of uninsured Americans, many of whom have been living one medical emergency away from the poorhouse. You realize those computer failures that have hampered sign-ups in the early days–to the smug delight of the critics–confirm that there is enormous popular demand. You have probably figured out that the real mission of the Republican extortionists and their big-money backers was to scuttle the law before most Americans recognized it as a godsend and rendered it politically untouchable.
It turns out there is at least one diehard who still thinks Ted Cruz was right.