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Obamacare Initiates Self-Destruction Sequence
Interesting post from Megan McCardle.
"On Wednesday, Politico’s Carrie Budoff Brown reported
that the administration was saying fewer than 500,000 people had
actually lost insurance due to Obamacare-induced cancellations. This
struck me as a strange leak: Half a million is a lot less than many
people (including me) have been estimating, but it is still not a small
number, and the administration has tended to sit on negative information
until the last possible moment.
Yesterday, we had a more official
announcement from the administration: Anyone who has had their policies
cancelled will be exempt from the individual mandate next year. The
administration is also allowing those people to buy catastrophic plans,
even if they’re over 30.
What to make of these two statements? On
the one hand, the administration is trying to minimize the number of
people who have been affected by cancellations, and on the other hand,
it is unveiling a fix to the problem of cancellations. And these are not
minor changes.
As Seth Chandler points out,
Healthcare.gov doesn’t even let you see catastrophic plans if you’re
more than 30 years old. Is now the time to be making technical changes
to the website?
As Avik Roy points out,
catastrophic plans aren’t that much cheaper than the so-called bronze
plans. They’re also not eligible for subsidies. This is unlikely to be
much help to folks who lost insurance; all it does is introduce some
much-unneeded complexity to Healthcare.gov.
As Aaron Carroll points out,
insurers calculated their premiums for this year on the expectation
that the relatively healthy folks who were already buying insurance
would be buying policies on the exchange. The insurers are not happy
about this latest change, and Carroll predicts that they will ask the
administration to push more money to them through the “risk corridors.” I
think he’s right.
As Ezra Klein points out,
this seriously undermines the political viability of the individual
mandate: “But this puts the administration on some very
difficult-to-defend ground. Normally, the individual mandate applies to
anyone who can purchase qualifying insurance for less than 8 percent of
their income. Either that threshold is right or it's wrong. But it's
hard to argue that it's right for the currently uninsured but wrong for
people whose plans were canceled … Put more simply, Republicans will
immediately begin calling for the uninsured to get this same exemption.
What will the Obama administration say in response? Why are people whose
plans were canceled more deserving of help than people who couldn't
afford a plan in the first place?”
Arnold Kling put it more pithily: “Obama Repeals Obamacare.”
I’d
ask this: What do you do for an encore? Will the administration force
these folks to buy insurance next year? Or will they keep allowing
special exceptions rather than take the political heat for changing
health insurance that people liked?
I’m not sure the
administration is thinking that far ahead. The White House is focused on
winning the news cycle, day by day, not the kind of detached
technocratic policymaking that they, and the law’s other supporters,
hoped this law would embody. Does your fix create problems later, cause
costs to spiral or people to drop out of the insurance market, or lead
to political pressure to expand the fixes in ways that critically
undermine the law? Well, that’s preferable to sudden death right now.
However
incoherent these fixes may seem, they send two messages, loud and
clear. The first is that although liberal pundits may think that the law
is a done deal, impossible to repeal, the administration does not
believe that. The willingness to take large risks with the program’s
stability indicates that the administration thinks it has a huge amount
to lose -- that the White House is in a battle for the program’s very
existence, not a few marginal House and Senate seats.
And the
second is that enrollment probably isn’t what the administration was
hoping. I don’t know that we’ll start Jan. 1 with fewer people insured
than we had a year ago, but this certainly shouldn’t make us optimistic.
It’s not like people who lost their insurance due to Obamacare, and now
can’t afford to replace their policy, are going to be happy that
they’re exempted from the mandate; they’re still going to be pretty mad.
This is at best, damage control. Which suggests that the administration
is expecting a fair amount of damage."
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