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Obamacare Has Launched. Now What?


Today is the first day of the rest of Obamacare’s life: the online marketplaces have launched nationwide, and, theoretically, the uninsured should now be able to shop for coverage. Now what?

The most obvious thing to note is that though the exchanges have “launched,” many aren’t yet fully functional. We can continue to expect similar glitches, delays, and malfunctions in the coming months, as President Obama has said. It’s important not to overemphasize this. Any new health care law—even one favored by the opponents of the ACA—will have glitches like this. But we shouldn’t wave it off, either. As Matt Yglesias has pointed out, after Kathleen Sebelius asked the public to give HHS the same slack on glitches that it gives Apple:

Apple has a long track record making technology products. What’s more, lots of people—most people in fact—don’t buy Apple’s technology products. So Apple’s customer base consists of a self-selected minority of people who based on Apple’s long track record in the industry choose to buy its phones, tablets, and computers.

The health care marketplaces, by contrast, will need to gain the trust of customers who may be skeptical or hostile about the underlying project. They’re also launching into a highly politicized partisan crossfire in which many people have a huge vested interested in blowing problems out of proportion.

Assuming that the glitches work themselves out without creating any lasting drag on the law, however, the next major test will be the January 1st deadline, when the individual mandate will go into effect and the coverage will officially start. At that time, the big question for Obamacare care will be whether enough young people sign up for coverage to keep premiums low. The latest Gallup poll on coverage found that 65 percent of uninsured Americans currently plan to sign up for insurance under the ACA, while only 25 percent definitely stated they will instead pay the fine. Those seem like pretty good numbers for Obamacare, but a lot rides on the age breakdown. If young people are highly overrepresented in the 25 percent, we could still see premium rates rise.

Past January 1st, one possible outcome is that support for the ACA will continue to drop, in which case serious reforms to the law may become practically unavoidable. A leading candidate for reform would be dropping the employer mandate permanently, something some on the left already favor. If this happens, the law would probably function better on some key metrics (for instance, it will depress wages and job growth less), but it will cost tax payers a lot more.

If tinkering with law in this way isn’t enough to build public confidence in it, the conversation could shift in one of two directions: toward a repeal and a Republican alternative, or toward further consolidation and a single payer-still system, under the logic that the ACA only failed because it didn’t go far enough. Of course, if support climbs after January 1st, we’ll be in a totally different place. Politically, the GOP will have suffered a defeat that will weaken it for many years to come, and any serious alterations to the law will be unlikely.

Whether public opinion continues to plummet or starts to rise will largely hinge on one issue: cost. Expanding access is an essential piece of health care reform, but if in the end you’ve expanded access to a system that’s going bankrupt, even the newest initiates are likely to think they got a raw deal. If premiums continue to climb—or climb at higher rates—expect the movement for serious reform or repeal to gain even more steam.

Ultimately, however, either the ACA’s success or its failure could be used as a rationale for the single payer system. If it succeeds, we need more of it; if we fail, it’s because it didn’t go far enough. This is all the more reason for Republicans to be at the ready with a serious health care plan that their wonks, party leaders and public intellectuals can support. With such a plan (and with some success in the 2014 midterm elections), the GOP could make a plausible push for repeal if, as seem likely, the continuing cost crisis erodes support for the ACA. Without it, they’ve essentially ceded the field to the single-payer advocates.

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  • Anthony

    “The absence of such a credit, sadly, is not a coincidence. As I’ve noted before, a lot of Congressional Republicans are resistant to the more plausible conservative proposals
    on health care precisely because they don’t want to find the money
    required to make any of them work — in some cases because they prefer
    the comforting illusion that the current system represents some sort of
    free market ideal that would be wrecked if we started providing tax
    credits to the currently-uninsured, and in other cases because they’re
    all-too-aware that some of that money would have to come from caps and
    cuts that affect groups that currently vote Republican.”- Ross Douthat

    So basically the message of the current GOP – as opposed to Professor Mead, who has proposed some good ideas and laudably continues to “think big” on this issue – is our voters, i.e., old white people, already have medicare and we aren’t interested in helping in the poor or struggling young people.

    • Andrew Allison

      I think you have this exactly backwards, and that the issue is how the young and healthy will feel about paying for the care of the older and less healthy who can’t currently obtain or afford insurance. ACA is absolutely irrelevant to those on Medicare.

      • Clayton Holbrook

        I believe the issue Anthony points to is many of the same people that are against Obamacare would be hesitant to deny themselves Medicare benefits. This is just outright irresponsible hypocrisy.

        To further the point, I bet many of the same people are all about their Social Security which they “paid for all their lives”, aren’t sympathetic to younger folks who collect unemployment and food stamps in this crap economy. Talk about backwards…

        • Andrew Allison

          With respect, I suggest that you are as confused as Anthony. Medicare (of which, in the interest of full disclosure, I am a beneficiary) is completely unrelated to ACA. Rightly or wrongly, Medicare is pre-paid insurance.

          As to your second point, I wrote, “the issue is how the young and healthy will feel about paying for the care of the older and less healthy who can’t currently obtain or afford insurance.” which is pretty much what you wrote in your last sentence.

          • Clayton Holbrook

            I hear ya Andrew. I understand that Medicare is unrelated to the ACA in a policy sense. But as a gov’t priority if you’re against the spirit of gov’t provision of healthcare, it’s a little strange that the Repubs seem to be so against Obamacare but unwilling to deal with the medium to longer term debt driver that is Medicare.

            Medicare is pre-paid in a sense. But on avg, beneficiaries collect 3-5 times what they paid into it. The difference is passed on to younger workers to cover.

          • Andrew Allison

            Not quite. First off, ACA is not, ostensibly, about the government provision of health care: it is NOT (its fundamental flaw IMHO) government provided, but government mandated: there’s a huge difference.
            Finally, as I wrote, “Rightly or wrongly, Medicare is pre-paid insurance.” The discussion about whether it should be means tested or otherwise limited is unrelated to the ACA debate.

  • Pete

    “ObamaCare has launched. Now what?”

    Now work must be done to repeal this monstrosity disguised as affordable health care.

  • wigwag

    The chances that the “Affordable Care Act” will be substantially revised or revoked are remarkably small. The chances that a Republican alternative will be enacted in the next decade or so, are even less. If there is any revision at all, it will surely be the enactment of a single payer system
    For the GOP to revoke or substantially revise the new health insurance law one of two things has to happen; they need to win the Presidency or they need a veto proof majority. Perhaps Professor Mead would like to tell us what he thinks the chances are that the GOP will achieve either in the foreseeable future.
    There is no Republican who has any chance of beating Hillary Clinton if she run; it is highly doubtful that any Republican could defeat Joe Biden either.
    The GOP has irrevocably antagonized Latino voters; the number of these voters is going up by the minute. Asian voters and the small number of Jewish voters are also lost for good to the GOP. If Hillary runs the gender gap will be of astronomic proportions; if Biden runs it will be merely enormous as it was for Obama. To make matters worse, the GOP is hemorrhaging young voters as well.
    Superimposed on all of this is the fact that with their current antics the Tea Party crazies in the House are antagonizing the one group that they can’t afford to anger; the GOP donor class.
    The GOP donor class isn’t the Texas energy set that it used to be. Far and away, the most important GOP bundlers are hedge fund and other finance types who live on Fifth Avenue or Park Avenue in New York or Greenwich, CT. They are moderate and they don’t want the Government shut down or a default.
    The GOP’s current behavior is antagonizing its donor class and this could have negative consequences for the next GOP Presidential nominee. Most of the big GOP donors know Hillary and Bill on a first name basis and despite their ideological differences, they like each other. Then there’s the fact that the spouses and girlfriends of every Republican-leaning hedge fund guru on Wall Street will be lobbying for their significant others to support Hillary. Where is the GOP nominee supposed to get the $1 billion it will take to mount a credible race?
    The only GOP nominee who might give Biden or Clinton a run for their money is Chris Christie and we already know how the Tea Party nut jobs feel about him.
    How exactly does Professor Mead expect the GOP to implement whatever ideas it has about health care with Hillary Clinton or Joe Biden sitting in the White House? Even if the Republicans control both the House and the Senate in 2016 (a very unlikely scenario) does he really expect the GOP will have enough votes to overturn a Presidential veto of major alterations to the Affordable Care Act?
    If the GOP really wants Obamacare to go away they need to give up on their failed strategy, and the lunatics running the GOP nuthouse need to be replaced by serious adults. To dump Obamacare the GOP needs to win the White House.
    To win the White House they need to pass the Democratic immigration reform bill and find a way to stop alienating tens of millions of American women.
    As long as Latinos hate the GOP and women find the GOP disgusting, the chance that the Republicans will get to try out their ideas on health insurance reform is near zero.
    That is, assuming they have any ideas on health insurance reform. Their last big idea came from Mitt Romney. Obama and the Democrats implemented it.

    • Anthony

      WigWag, hello. Roger Simon gives underscoring to your point (we live in a time when outright buffoonery passes for statesmanship).

      • wigwag

        I think you are right, Anthony, the buffoons rule the roost. The sad part is that it doesn’t have to be this way; the GOP is filled with capable leaders, especially at the State level. Chris Christie comes to mind as does Rick Snyder. Mitch Daniels would have been an extraordinary president; unfortunately he knew he couldn’t win because he would need to adopt far right prescriptions that he didn’t believe in and are political arsenic just to appease the GOP crazies.

        Instead of showcasing the Party’s talent, instead the GOP trots out dolts like Bobby Jindal and Scott Walker, raving lunatics like the House GOP back benchers or craven cowards like the House GOP leaders.

        One awful consequence of this is that it gives license to the Democrats to move further left while still seeming far more reasonable than there Republican colleagues.

        For the sake of the country I really hope that some Republican will emerge who can deliver a much needed Sister Souljah moment to his GOP colleagues.

        • Anthony

          Good brief.

    • Hubbub

      I must agree; the die is cast. We are doomed to have some kind of government-assisted health care system, and, we can count on it getting less and less practical and efficient as time passes. We will not – cannot – return to the old hodge-podge care of yesterday.

      Already the new system is not equal care for all, for it offers different tiers of care depending on one’s economic resources – much like the old less formal system – bronze, silver, gold, for now, but probably in years ahead we can add nickel, lead, and aluminum to the choices. And which tier will still reap the greatest personal benefit is self evident.

      Just another government welfare con game passed off as citizen welcare.

  • Andrew Allison

    Given that the ACA mandates much more extensive benefits than offered by current policies, it is inconceivable that the cost will not increase dramatically. The only question is who will pay.

    The first victims, namely those who are being shifted to part-time employment as a result of the employer mandate, are already apparent. A more insidious cost is the long-term effect of the mismatch between premium revenue and costs on the availability and quality of health care.

  • Anthony

    “Ultimately, however, either the ACA’s success or failure could be used as rationale for single payer system.” WRM, health care both selling thereof and covering thereto is interconnected web of interests; to unravel (dismantle) goes beyond ACA’s launching and success or failure.

  • gracepmc

    Apparently it is acceptable that this law does not apply to all. There are carve outs, special classes, exemptions, waivers to this “law of the land”. I’m talking to you “this is a tax” John Roberts. A tax unfairly applied. A law? A tax? Special snowflakes. And then there are those who think it ‘s free.

  • JDogg Snook

    Now what? Well, I’ll keep my employer-provided HDHP/HSA, a bit unlikely it’ll go away anytime soon. We’ll continue to use in-network/”low” cost providers, and pay for out-of-network “upgrades” for what we deem important matters. We have found better doctors and less annoying billers with the latter.

    Other folks? Well, alot being converted to part timers. More will be “dumped” into exchanges I think, far more. Not the 150k professional types, mind you, where health care is ~10% of their comp, but the ~50k types.

    What then? Well, it seems a bifurcated health care system. The higher paid professionals will keep their employer provided (and high quality/flexible) plans, while everyone else will be in exchanges, with less flexibility (as previous noted by WRM) to keep costs down.

    Seems like yet another force “hollowing out” the middle class, whose health benefits are about to be downgraded.

    Guess we’ll wait and see though.

  • charlesrwilliams

    How can any insurance company price a product where the cost depends on the mix of customers who buy it and the mix is unpredictable? What happens when an insurance company goes broke because too many diabetics and not enough 25 year olds sign up?

    Suppose I had a good job and just lost that job. What is my income for purposes of setting the Obamacare subsidies? Last year’s income? YTD income? This week’s income? My forecasted income for 2014? How can the number be determined or even verified?

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