Ignore the media, and the liberal spin. There is one simple political reality: Democrats across the board are extremely worried about the Affordable Care Act, and its effect on the 2014 elections.
I have quite a few connections to staffers and other behind-the-scenes people in the Democrat Party. Talking to them, there is a consensus: they are in trouble.
Some of them fully believe that Barack Obama, Kathleen Sebelius and the rest of the President’s administration can right the ship, and some make the Obamacare system functional enough to please the public.
Most, however, don’t believe anything of the sort.
There is a reason for this: for all the bluster and hot air about the Obamacare website debacle, that is the least of the worries for liberal supporters of the health insurance reform plan. In fact, the failure of the website may actually be hiding some of the more pernicious aspects to the health care law.
So here is a timeline of the largest hurdles the supporters of Obamacare face over the next twelve months:
November through December 2013
The enrollment numbers for the first month were terrible, and that is unlikely to dramatically change any time soon. Initial numbers stated the total enrollment nationwide for October was a meager 50,000 or so. That is less than 1/10th of 1% of the total necessary to keep the system sustainable.
Obamacare defenders will try to spin that the tens of thousands added on to the Medicaid system as a sign of success, but even people not familiar with the ACA understand it is easy to give away free stuff; It is another thing entirely to get Americans to pay their hard-earned money into the system, when that system may not provide them any great benefit in the near term.
The website functionality is going to be an ongoing challenge as well. President Obama and HHS Secretary Kathleen Sebelius both promised that the website would be working by the end of November. That now appears to be another ‘incorrect promise’ and frankly, most IT experts I talk to would be surprised if the system is up and running before February.
Website Security will be an issue as this process continues as well. Consumer Reports and others already warned Americans that they should wait until major fixes in the security loopholes were corrected. On 11/19/13, there was testimony that the website places user data at “critical risk” despite recent government assurances it is safe to use. Several security experts have predicted a large-scale breach in security. Imagine millions of Social Security numbers, credit card numbers, along with IRS tax data and health data being breached.
Amazingly, the entire ACA Payment system also has to be built, after three years. There is no system at present to transfer funds from the Federal government to the states or to insurers. And even more shocking? On November 18th, the head of the IT for the ACA admitted that at least 30% of the ENTIRE IT INFRASTRUCTURE still needed to be constructed.
To compound matters, the system also has a nonfunctional subsidy calculator. What does this mean? Right now, they are only estimating individuals expected subsidies. However, if the estimate is incorrect and over estimates your subsidy, you could be liable for hundreds or thousands of dollars more in premiums next year. This would be problematic in the best of situations.
To compound this problem, the administration is trying to shunt customers to private insurance websites, as a ‘work around’ for the broken Federal exchange. The problem is, it is technically against the law for purchases outside of the exchanges to receive federal subsidies. What happens if a legal entanglement results in those subsidies to be ultimately rejected? Customers could be in for a real disaster if they agree to purchase insurance, only to find they are not eligible for subsidies.
January through June 2014
The first problem is one I have already written about: Obama will have to break his promise that If you like your doctor, you can keep your doctor. This promise could never have held true in the market that Obamacare creates, because as predicted, many of the policies purposefully eliminate expensive and elite institutions.
I personally have been booted off of several health care plans because of a cancer center I work at. I know many doctors stating similar experiences at elite institutions such as Memorial Sloan-Kettering Cancer Center, Mayo Clinic, Cleveland Clinic, and other prestigious institutions. The most famous case was a cancer patient in California who wrote an editorial in the Wall Street Journal, and who could no longer see her oncologists and other treating physicians, because the California exchange had no policies that would include all of her physicians.
The next major debacle will be the surprise of high deductible payments. The majority of the policies being sold are the cheaper ones on the exchanges; the so-called Bronze and Silver plans. The average yearly deductible, after paying your premium for these policies, is around $5,000. There is a high degree of variability, but on average these are high deductible plans. What will happen the first time there is a sick child, and a $5,000 deductible stands between that poor family and a life saving procedure?
One interesting twist will be the use of Obamacare Navigators. This was a program the administration started to ‘guide’ customers through the process. Sounds great. Except for one problem: many of the Navigators were not appropriately screened, and there has already been a fair amount of fraud in this group of government workers. Undercover videos of Navigators telling customers to defraud the government have already surfaced, and I am sure you will see dozens of those as time goes on.
July through September 2014
This is actually when the rubber meets the road. By this point, no matter how incompetent the administration’s IT experts are, virtually everyone that wants to have insurance should have insurance. The website problems, even if they still persist, should no longer be relevant.
The first question that will arise is how many people chose to pay the penalty? For many of the lowest income persons, a penalty of $95 was all that was required to opt out; with the high expense of many plans, a fair number of people will choose this option.
More important is the ratio of healthy individuals compared to sick ones in the exchanges. For the exchanges to survive, they require a very high ratio of healthy people buying in, in order to subsidize the rest of the population. Recent data from Kentucky (supposedly a liberal success story) shows that the ratio of healthy to sick is closer to 1:4 than the close to parity required for financial sustainability.
What happens if this does not occur? Insurers will enter the oft talked about ‘death spiral’. They will be required to raise their future premiums in 2015, because the cohort of patients in their insurance pools are less healthy, and thus, more expensive to treat. The death spiral occurs as young, healthy persons realize that the increased costs of their insurance is not worth it, and opt out…further increasing the ratio of sick persons in the insurance pools, and further increasing costs. This is the scenario that most scares Obamacare proponents.
The irony of all this is this presumes that the individual mandate is not delayed. Right now, the Upton and Landrieu bills sit in Congress, and Obama has announced his executive order to ‘fix’ the problem of policy cancellations. The more delay of the individual mandate, either by legal methods or presidential signature, the more likely it is that insurers will have costlier insurance pools that will drive up premium costs moving forward.
The next problem is how this huge new population of insured patients will be treated by a system that is already overburdened. A doctor shortage very well could arise. Something similar, but to a lesser scale, occurred during Romneycare’s implementation in Massachusetts. Massachusetts was more prepared than most states, as it has the highest ratio of doctors to patients in the country. Even then, access to physicians, especially specialists, was restricted substantially. Now imagine the states with low doctor to patient ratios, and you can imagine the complications that could arise.
That doesn’t even take into consideration that many physicians are likely to opt out to the largest expanding health care insurance program in the country: Medicaid. Already in states like New York, about a third of doctors have opted out. Many physicians, especially those tied to hospitals, cannot opt out. But this decrease in available primary physicians to handle this huge new number of Medicaid patients (who are among the sickest and poorest patients around) could be a disaster, and there is no short term solution to this problem.
October through December 2014
This is where all the real excitement occurs. Let us assume some how, some way, Democrats have survived the year without any major catastrophes, and are holding their head above water as the midterm elections come. There are several huge hurdles still remaining.
The first, and largest by far, will be the kicking in of the employer mandate. Remember that this mandate was supposed to occur this year; however, because of the completely broken and unworkable system, Obama delayed it (outside of legal bounds no less). But the employer mandate is the crux of the entire system; the majority of Americans get their insurance through their employer, and insuring this mandate is vital to that majority.
The problem arises in the fact that in the same way that millions are losing their private insurance plans today, even a greater number of employees are likely to either lose their plans or see drastic changes next year. This was predicted by the Department of Health and Human Services as far back as 2010. Now is when that change kicks in.
Furthermore, millions of small business owners will have to decide whether to pay for insurance, or send their employees into the exchanges; the same exchanges that are so far struggling to handle the volume and load.
For employers that are going to continue their insurance plans, another problem: they will likely get notices from insurance companies that the plans they currently purchased no longer exist. Sound familiar? And insurers will, under Federal law, have to do that a minimum of 60 days before cancellation, meaning…the beginning of November, at the very latest.
And, remember the ‘death spiral’ we discussed above? If insurers face that hurdle, they are likely to raise rates across the board. Here is the biggest problem of all: for all the talk about these changes affecting only the people on the exchanges, if and when a ‘death spiral’ or anything like it occurs, costs will rise for everyone. That means increased premiums for businesses, which will likely be passed on directly to employees. Some employers will also likely choose the easy option, which is shifting their employees to the exchanges.
And all this will be announced just weeks before the election.
After all of this, you begin to understand why those that truly understand the steps necessary in the next year to implement the full-scale of the Affordable Care Act are worried. Right now, we are seeing the tip of the iceberg: gross incompetence in establishing a website for entry into this behemoth government monstrosity.
But once you enter this behemoth, you start to understand that there are numerous interweaving and interconnected cogs that will need to work relatively smoothly, or the system as a whole will flounder.
That doesn’t even tell the political story. Every week, if not daily, there will be a story about individuals who are being harmed by the ACA. Those stories will drown out any of the positive stories, because we know that ultimately the media highlights the negative. As stated above, when a child or young mother is denied life saving treatment because of restrictions placed upon them by Obamacare, who takes the blame?
Liberals are trying to circle the wagons, to keep sustainable political support for the plan, in the hopes that the Obama Administration can fix the problems in short order. But as you can see above, there is no simple fix. Many of the ‘problems’ with Obamacare are inherent to the system that Democrats devised. These were intended results. How do you fix the plan, when it is the intent of the plan that is the problem in the first place.
So batten down the hatches, America…it is going to be a bumpy ride.