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To Delay or Not to Delay

By Kim Bellard, October 15, 2013

It’s fair to say that the implementation of the Affordable Care Act – ACA or, as it is most commonly come to be called, Obamacare -- has not gone exactly smoothly. 

The Administration had weathered several earlier storms as it moved forwards with various aspects of implementation – e.g., coverage for contraception, the delay in options through the exchanges for employees of small businesses, and the delay in the employer mandate, to name a few -- and I’ve touched upon some of these previously (see, for example, Sebelius Says or Tell Me the Good News Again from earlier this year).  The recent snafus with, the consumer portal for the 36 state exchanges run by the federal government, may prove to be the proverbial straw that breaks the camel’s back.

The portal went live October 1, as planned, but that was pretty much all that went according to plan (see Clive Riddle’s earlier post).  Consumers complained – and continue to complain -- about long waits, pages not loading, inability to create accounts, and even numerous typos or grammatical errors.  User-interface experts were baffled at the portal’s requirement that users create accounts before being able to research their health insurance options, especially since the account creation process proved to be one of the most problematic. 

Some reports indicate that the federal government spent over $600m on the site – over 6 times the budgeted amount – and other reports fault HHS for their late start, reliance on multiple vendors, and lack of effective oversight over the huge IT project.  One IT company which did not work on the portal but which does claim to focus on building software for government blames the mess on the federal procurement process, which they say rewards companies who are good at the procurement process rather than at the desired task itself.  They may have something there.

Coming as it did just as the federal government shut down due to Congress and the President not able to agree on spending limits, to many the portal fiasco symbolized the federal government’s inability to do anything right.  It shouldn’t surprise anyone that recent polls suggest only 5% of the American public approve of the job the government is doing.   All this distrust has given new ammunition to critics of Obamacare.  House Republicans were already waging a battle to “defund” Obamacare, and the problem with was like throwing them red meat. 

The defund battle seems to have quieted -- for the moment -- but this notion of delaying the individual mandate has gained some currency.  CNN anchor Wolf Blitzer, who is generally seen as keeping a neutral perspective, surprised many observers by saying the problems with supported the Republicans’ desire to delay the law for another year.  After all, CBO estimated that such a delay would save the federal government some $36b between 2014 and 2018, due to fewer people covered through Medicaid/CHIP and to lower expenditures on subsidies. 

I even saw Jon Stewart skewer Secretary Sebelius on The Daily Show about the topic.   Despite declaring herself a “recovering Insurance Commissioner,” Sebelius seemed totally unable to articulate why delaying the individual mandate wasn’t the same as delaying the employer mandate. 

Normally I think Mr. Stewart is smart, as well as extremely funny, but this is a case where he misses the point (as Stephen Stromberg has ably pointed out in The Washington Post).  I’m already dubious that the penalties for not buying coverage are strong enough to overcome fiscal and other inertia from most of the uninsured – especially the highly desired young and healthy ones – but delaying the mandate begs the question.  The mandate itself is not the point: assuring access to coverage is. 

Let’s say we delay the mandate, but keep the requirements that insurance companies must accept all comers, regardless of health condition.  We can ask people in New York or New Jersey what to expect, as those states required guaranteed issue with no mandate in the individual markets many years ago, only to see a virtual collapse in their individual markets, with limited options and the most expensive coverage in the nation.  Replicating that nationally would be a disaster.

Or we could delay both the mandate and the guaranteed issue provisions, continuing the nation disgrace of millions of Americans not able to qualify for or afford coverage.  After all, the supposed interim step offered by Obamacare – high risk pools – have long ago run out of money.  All those millions of Americans who want coverage, and who are among those overloading, would have to wait at least another year for an opportunity to get coverage, continuing to hope that they won’t be hit with significant medical expenses and fearing that such a delay would prove to be indefinite.

The many critics of Obamacare must forget that addressing the very real need of those uninsured Americans is the main purpose behind ACA. 

In case anyone is worried I’m too sympathetic to the Administration, let me repeat that I think ACA is a badly designed, poorly written, and fiscally scary pierce of partisan legislation.  The problems with it are more than just the “glitches” the Administration would have us believe, although they may not (yet) quite qualify as the “train wreck” that critics are so fond of characterizing it as. 

ACA doesn’t address costs or structural reform in any meaningful way, it has (inadvertently, due to the Supreme Court ruling on state flexibility) perpetuated or even accentuated the uneven access to coverage for our poorest citizens (e.g., see a recent New York Times analysis), and it will be the death of employer-based coverage.  That latter may not be a bad thing, long term, but whose bright idea was it to apply the health insurance tax to only to insured plans, thus further spurring the shift to self-insurance or to dropping coverage?  That “recovering” Insurance Commission doesn’t seem to have learned much from her stint.

Much as I hate to admit it, I think the critics who fear that once consumers start getting subsidies there will be no going back have a valid point.  I’m just not convinced that is an excuse to wreck the law.  Instead of debating whether we should delay or defund, shouldn’t we be trying to fix and improve ACA?  Those millions of Americans without coverage deserve at least that.

Frankly, I don’t understand why more of the people who are desperately waiting to obtain affordable coverage aren’t beseeching their Congressmen not to screw up what they were hoping was going to be their big chance.  Maybe they can’t get through to them because they’re still stuck at, or maybe no one is answering the phones or emails in Congress because the staff has all been furloughed.  Surely it’s not that Congress doesn’t care about them…is it?

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