The next ObamaCare crisis
What will the next great ObamaCare crisis be? Which of the many shoes hovering around this debacle will be next to drop? There are quite a few Horsemen of the Apocalypse lined up at the starting gates.
First and foremost, there is the looming possibility that, contrary to early assurances from the ObamaCare crisis management team, the exchange websites won’t be running smoothly enough to get people enrolled before the individual mandate comes crashing down. There hasn’t been any official backpedaling yet, but Administration officials keep making comments that imply they don’t think the November 30 relaunch is going to happen on schedule. Early estimates suggested anything later than November 15 would lead to mass confusion.
Nevertheless, Health and Human Services Secretary Kathleen Sebelius told the Senate Finance Committee today that “delay is not an option.” She said that “by the end of November, the experience on the site will be smooth for the vast majority of users,” which is quite different from the bold promises of total functionality we heard from Team Obama a couple of weeks ago. Failure to meet the November 30 deadline would be a huge blow to their already dicey standing in popular opinion.
If HealthCare.gov does become stable enough for a large number of customers to use, there’s the danger they’ll flee in terror from the prices they see. Here’s a grim prediction: “Media attention will follow individuals to plan selection and their ultimate choices; and, in some cases, there will be fewer options than would be desired to promote consumer choice and an ideal shopping experience. Additionally, in some cases there will be relatively high cost plans.”
Where did that come from? It’s an internal “war room” document from the Obama Administration, which is very worried about “sticker shock,” despite its media-spin efforts to appear serenely confident in the “Affordable” Care Act. They’re banking heavily on taxpayer subsidies to defray the cost of these policies for many customers – that’s why Healthcare.gov was hastily modified at the last minute to avoid showing prices without subsidy, which is one of the reasons it crashes so often. But at this point, with growing public discontent and anger about President Obama’s dishonesty in selling the program, customers might not be willing to completely ignore the pre-subsidy price, or completely comfortable with lifelong dependency on a “discount” funded by other people.
“Sticker shock” could be a big contributing factor to the ObamaCare Death Spiral, in which young and healthy customers balk at paying the inflated premiums necessary to fund the rest of the program. There is already evidence that applicants for coverage have been “older than expected, raising concerns about the potential effect on premiums.” A report at California Health Line notes that in several states, most of the ObamaCare applicants have been over 50. A devastating report by NBC News said that only “about 17 percent of people who don’t have health insurance actually tried to buy some on the new marketplaces in October,” which would seem to be a stinging rebuke of the entire stated purpose of ObamaCare.
The Administration hopes that procrastinating young people will rush to sing up right before the individual mandate deadline hits in March, and speculates they’re holding off until the ObamaCare website is working better. But what if they decide it makes more sense to pay the individual mandate tax and take a pass on those 300 percent premium increases and $10,000 deductibles? After all, one of the most touted features of ObamaCare is that everyone must be issued insurance, even if they have a pre-existing condition. If a large number of people make such a decision, it won’t be long before we’re looking a a massive bailout of the insurance companies.
That would become even more likely if one of the Congressional efforts to force Barack Obama to make good on his infamous promise succeeds. Republican Senator Ron Johnson of Wisconsin has such a proposal, the “If You Like Your Health Plan, You Can Keep It Act.” So does Democrat Mary Landrieu of Louisiana, with her “Keeping the Affordable Care Act Promise Act” – whose title is arguably even more brutal to the Lyin’ King. Over in the House, Rep. Fred Upton (R-MI) of the Energy and Commerce Committee has his “Keep Your Health Plan Act,” which the Washington Post describes as “the biggest threat to ObamaCare so far.”
Clearly there is bipartisan hunger in Congress to escape from public wrath over those millions of canceled insurance policies… and if such a bill passes, it’s going to make the ObamaCare death spiral even worse, because few people will voluntarily give up policies they like to pay huge premium increases.
Philip Klein at the Washington Examiner thinks “access shock” will be an even larger dropped shoe than sticker shock:
Ultimately, if the tech problems plaguing the rollout of Obamacare are fixed, and Americans are able to obtain affordable health insurance through the law’s new exchanges that allow them to keep their doctors, the current uproar over lost insurance plans will simmer down.
But if Americans also lose their doctors, the political problems confronting the president and Obamacare will only deepen.
In the face of media reporting on the high cost of Obamacare-compliant insurance plans, defenders of the law have typically noted that the Congressional Budget Office expected them to be even more expensive.
But one of the main ways insurers contained costs was by stripping down the number of hospitals and doctors that are covered by their plans.
How “stripped” are we talking about?
In August, Modern Healthcare reported on a McKinsey & Co. analysis of 955 Obamacare plan offerings in 13 states, which found that almost half were of “the narrow-network type,” meaning enrollees’ choices were restricted and that they would “have limited or no coverage if they seek care outside their plan network.”
A survey of 409 doctors by the Medical Society of the State of New York found that 44 percent weren’t participating in any health plan offered on the state’s exchange, 33.5 percent weren’t sure if they were participating in any plans and just 6.4 percent said they were participating in more than five plans.
This is, of course, another thing President Obama explicitly promised would not happen – “Don’t pay attention to those scary stories about how your benefits will be cut” – and it’s going to be even harder for his retconning time-traveling quote surgeons to fix. Higher premiums for worse plans? People are going to love that!
Update: It’s a bit of a dark-hose contender to be next in line as the big ObamaCare crisis, but let’s not discount the possibility that security flaws in the sloppy website code will trigger a wave of identity theft and fraud, perhaps followed by lawsuits against the government agency that enabled them. In her Senate testimony today, HHS Secretary Sebelius admitted that she knew about security risks in the exchange software as far back as August… but she went ahead with the system launch anyway.
Update: It really should be a “November 30″ deadline for full implementation, given the realities of the calendar, or perhaps it would be more appropriate to say December 1. I didn’t want to change it without copping to the mistake.