Will Obama Ever Enforce His Health Law?

Great post from Megan McArdle.

The Barack Obama administration announced yesterday that it was extending the “grandfathering” of noncompliant health-care plans for two more years. In other words, everything is proceeding as I have foreseen:

The law still lacks the political legitimacy to survive in the long term. And in a bid to increase that legitimacy, the administration has set two very dangerous precedents: It has convinced voters that no unpopular provisions should ever be allowed to take effect, and it has asserted an executive right to rewrite the law, which Republicans can just as easily use to unravel this tangled web altogether.

Many of the commentators I’ve read seem to think that the worst is over, as far as unpopular surprises. In fact, the worst is yet to come.

I wrote that in January, when the administration had so far evinced no willingness to inflict any pain on anyone, even if the pain was needed to make the law work. A month and a half later, this record is even stronger.

This latest maneuver is supposed to help midterm Democrats, who are facing a very tough landscape in November. But there will always be an election coming that Democrats will want to win. The longer this goes on, the harder it will be to activate the unpopular parts of the law. Especially if Republicans gain the trifecta -- House, Senate, presidency -- they are going to have no incentive to save Obamacare by sacrificing their own political fortunes.

As I explained in January, this has terrible potential consequences for the long-term viability of the law:

Obamacare’s exchange facility was conceived as a “three-legged stool”: guaranteed issue, community rating, mandate. Guaranteed issue means that an insurer can’t refuse to sell you a policy. And community rating means that they can’t agree to sell you a policy -- for a million dollars. The problem is that if you set things up this way, it makes a lot of sense to wait to buy insurance until you get sick, at which point premiums start spiraling into the stratosphere and coverage drops. Enter the mandate: You can’t wait. You have to buy when you’re healthy or pay a fine.

There are actually other legs -- the subsidies, in particular, are needed so that you’re not ordering people to buy a product they can’t afford. But it doesn’t really matter how many legs the stool has; what matters is that it needs all of them. Take one away, and the whole thing is in danger of collapsing.

Unfortunately, whenever someone has voiced discontent with the way things are going, the administration has taken a hacksaw to another leg.

The hacksaw makes the insurance market less viable, reduces coverage and forces the government to spend more money trying to keep insurers from exiting the market. And because so much of this is accomplished via administrative rulings of extremely dubious legality, the administration is handing Republicans a tool that they can use to keep dismantling the law should they take the White House in 2016. Democrats can complain, to be sure, and I’ve no doubt that in the event of a Republican victory, they will suddenly and unanimously rediscover their objections to these sorts of games. But they will not be able to convince anyone else that this is somehow novel and illegitimate.

This is President Obama’s signature legislative achievement, the program for which he will be remembered. And he doesn’t have the courage to defend it, even when he is no longer facing re-election. If he won’t stand up for the hard choices his law requires, he can’t think that anyone else will either."