Obamacare: Democrats lower the lifeboats

The News TribuneNovember 20, 2013 

The United States is a democracy, and President Obama last week did what politicians do in a democracy: damage control in the face of public anger.

His tactical one-year retreat on a core rule of Obamacare — the requirement that all Americans buy into the new health system in 2014 — was designed to prevent a political tornado from becoming a typhoon.

With self-insured citizens screaming about the loss of their existing medical policies, the president’s allies in Congress were bolting right and left. Thirty-nine House Democrats even voted for a Republican bill that would make the retreat permanent and eviscerate the entire Affordable Care Act.

Obama’s biggest blunder so far was his mendacity — softer words won’t do it — in repeatedly promising that no Americans would lose their policies or their doctors under the new system. Tens of thousands if not hundreds of thousands stand to lose both.

The problem is confined to the people who buy individual policies outside group plans. Even a few thousand people shouting “Betrayal!” can thoroughly dominate the national news. Especially if they’re right.

Politically, Obama is boxed in by the broken promise. He had to fudge the rules, even if the fudging created a whole new set of dire problems.

Insurers who’ve played by the rules and developed policies that conform to Obamacare must now rush to recalculate risks and rates under extreme time pressure. The delay’s biggest threat is adverse selection — a risk pool with too few healthy people to offset the costs of the sick.

Adverse selection can drive rates up steeply or force insurers out of the market entirely. Washington state experienced this collapse in the 1990s under then-Insurance Commissioner Deborah Senn.

Obama was startlingly frank last week about one purpose of his retreat — diverting public anger from Democrats to insurers: “What we want to be able to say to these folks, ‘You know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan.’”

That at least was honest — if baldly cynical.

The move also threatens to off-load anger and chaos to the insurance commissioners who have dutifully tried to implement the ACA on the state level.

When Obama sounded his retreat, Washington’s Mike Kreidler responded by saying that the new rules would stay put this state. He has the great advantage of not being associated with the you-can-keep-your-insurance gurarantee, and Washington — peculiar as the state is — might become a helpful demonstration project for the national plan.

Or not. The handful of stay-the-course states are likely to see problems of their own as their systems are decoupled from the lurching federal system. One thing is certain: 2014 promises to be one very rocky road for the Affordable Care Act.

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