The Obamacare Joke Is On Us - InvestingChannel

The Obamacare Joke Is On Us

A tongue-in-cheek warning is making the rounds: If an email offers you a functioning link to create an account on HealthCare.gov, it’s a scam run by offshore con artists. Nothing on the legitimate HealthCare.gov website actually functions.

President Obama clearly senses that his signature policy achievement is on the verge of becoming a laughingstock. He responded yesterday, as is his habit, by staging a campaign-style appearance in the Rose Garden, complete with hand-picked ordinary citizens serving as silent witnesses to the Affordable Care Act’s merits, while the president declared that “there’s no excuse for the problems.”

One of those ordinary citizens, expectant mother Karmel Allison, provided a rare unscripted moment when she became woozy as she stood behind the president. Obama, who is much more likeable when he gets out of his near-constant campaign mode, quickly turned to help her as he quipped, “This happens when I talk too long.”

There was little else to smile about when the commander-in-chief, stating only the obvious, announced that HealthCare.gov is too slow, that “there’s no excuse for the problems,” and that “they are being fixed” by “some of the best IT talent in the country.” (That might be part of the problem. In the absence of immigration reform, maybe we should be recruiting the IT talent behind some of those fraudulent offshore websites.) At the same time, the president churlishly admonished Republicans who have opposed this law at every turn to stop “rooting for its failure.” He sounded like the manager of a losing ballclub who blames opposing fans for booing his players.

Obama’s broad points, however, were perfectly fair – and perfectly irrelevant. Eventually, the federal website that provides an individual insurance market for 36 states will be fixed, after a fashion. Consumers will, someday, be able to go online, compare their insurance options, obtain a price that reflects any government subsidies for which they qualify, and sign up.

But it is going to take more than just speeding up the site before that can happen. Though the federal Health and Human Services department has imposed a virtual news blackout on the website’s performance, word is leaking out from insurance companies that only a trickle of customers gets through, and that many of those who make it through the maze are being mishandled. Some of the information funneled to insurers is wildly inaccurate, including customers who are reported as having multiple spouses or who have signed up for multiple concurrent insurance policies.

Even after those more serious technical problems are ironed out, we will be left with a law whose fundamental architecture is flawed beyond redemption. The statute gives the sick an ironclad right to obtain insurance they are certain to buy, but healthy people have only a minimally enforced “mandate” to purchase coverage that is inherently overpriced in order to cover those who are already sick. Large employers have already received a one-year reprieve from their own mandate to offer coverage, and many are reducing their full-time headcount anyway, further diminishing the pool of people over whom risk is spread.

It gets worse. Though the Supreme Court upheld the Affordable Care Act’s basic constitutionality last year, it sided with the roughly half the states that have chosen to opt out of the expansion of Medicaid, which was crucial to the law’s goal of providing near-universal coverage. More litigation is underway on the question of whether the law even allows the government to offer, in the 36 states that do not offer their own exchanges, the planned subsidies for coverage for households with income between the poverty level and four times greater. A defeat on that point would mean that Obamacare would require millions of Americans to buy insurance that they simply could not afford, at least if they want to attend to matters such as paying rent or eating. The individual mandate would certainly fall at that point, leaving insurers forced to cover mainly the sick people who would still buy policies – policies whose prices would inevitably spiral upward.

The president faults Republicans for “rooting” for the law to fail. But if Obama and his party wanted GOP buy-in, the time to get it was when legislators were writing the law. It would have been a tedious, messy, uncertain process, and it might not have borne fruit. Yet had Obama asked lawmakers of both parties to help him draft a health care reform plan, he might well have gotten a sound blueprint, just as he did with the Simpson-Bowles plan for deficit reduction. (Obama did not ultimately support that deficit plan, but at least the process demonstrated that compromise is possible on difficult issues when the two parties actually work together.)

Right now neither side is being practical. Obama and other Democrats pretend that fixing Obamacare is just a matter of fixing a website. Republicans want to stop Obamacare by any means necessary – but they have no plan whatsoever for what would happen next. If the Affordable Care Act disappeared, we would still be left with serious issues of affordability and availability.

Most Americans wanted someone to do something about these issues. Somebody – namely Democrats – did. Getting what we wanted, and belatedly discovering that it isn’t what we really wanted, is going to be the least funny joke of all.

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