If it ain't broke, don't fix it. The wisdom of the adage is evident in the fallout from implementation of the Affordable Care Act (ACA). Actually, we have double trouble; the system we had, if not entirely broken, was very badly in need of a fix. Let us not forget how upset everyone was that millions were denied insurance because they had prior conditions; that the policy you bought didn't cover what you thought it did; that the more expensive policies reflected health costs that were out of control; that if you lost a job, you also lost the health insurance that went with it.
Still, it is now as if we had called in a plumber to mend leaky taps and ended up with a flooded house. The maddening thing about the chaos is that Americans are overdue health care that is commensurate with our civilization in terms of quality, fairness and cost-effectiveness. But the historic blunders of Obamacare have set us back in both the conception of reform and its execution. This first of two columns will focus on what is clearly broken. Next week, we will examine what might be the best repair. Personal experiences and observations are welcome.
First, consider the troubles with our system that Obamacare was created to transform. The basic idea, which had much to commend it, was to lay down what a decent policy should do and make it affordable by pooling risks. Everyone was mandated to have health insurance, whether bought directly or acquired through his or her employment. Younger people, less likely to need care, would create a surplus of dollars that would be used to sustain coverage of older people. James Capretta of the American Enterprise Institute calculates that the vast majority of Americans – some 156 million of them under the age of 65 – get private-sector health insurance through their employers. Job-based insurance is attractive for workers because employer-paid premiums do not count as taxable income.
So far, so sweet – at least for people with full-time work. But millions of lower-wage Americans are employed in industries and firms that do not provide health plans. And workers who lose their full-time jobs are without insurance until they get another job offering coverage. Hence the case for more Americans owning their own insurance, as they do car insurance, and as Obamacare was designed to encourage so as to enhance family security and worker mobility. Theoretically, it was a viable scheme with some rough edges, but it was one crucially dependent on a mass sign-up. And that, in turn, depended on the smooth operation of online exchanges where consumers could pick and choose and insurers could compete on price and coverage.
Millions know all too well what happened in the exchanges. Given President Obama's deft digital footwork in his two election triumphs, everyone thought we were getting Fred Astaire. Instead, we got Abbott and Costello (and if you don't know who they are, you are clearly one of the young whose premiums are supposed to pay for those with longer memories. Hint, hint: "Who's on first, what's on second?"). The first stumble was that more than half of the states declined to set up exchanges or cooperate with the federal government.
Today, confusion is widespread. The sign-up system has been digital hell. The data center crashed, screens froze, an attempt to register by phone brought you back to the website – which sent you back to the 800 number. In a way, the level of demand vindicated the president's insistence on regarding health care as a priority, but it also required the check and recheck and check again that good managers carry out. Insurers struggle with garbled applications; some have decided not to sell plans the first year. Though the White House has indicated that more than one-third of those enrolled through exchanges must be young and healthy to prevent costs from spiraling, it appears through the Internet fog that younger people are not signing up in the numbers required. Many, burdened by college debt and overconfident about their vulnerability to illness, are going to be the last people to show up. They may calculate that the $95 tax penalty for not enrolling in 2014 is worth the gamble.