Thursday, October 24, 2013

Obamacare web site problems nothing compared to what will happen when they're fixed.

Though this should come as no surprise to those paying attention with the exception of Obamacare's most blind defenders, based on the early returns on Obamacare enrollments, many of the predictions of  failure including those made by both Howard Dean and Warren Buffet back in 2010, are becoming reality. And it has nothing to do with web site glitches.

The glitches and problems with the web site are actually, for the moment  a blessing for Democrats and Obama himself, serving as a temporary smoke screen to the real problems which will soon become evident and which were inherent in the law itself, a law for those not aware, that was primarily written by the insurance industry itself ( see the PBS documentary on Frontline) after Obama gave in to their demands and dropped the public option. Which is going to make Obamacare, not the signature accomplishment of his presidency as his supporters like to trumpet, but his signature failure.

These failures which at their core are rooted in the dropping by Obama of the public option in a compromise   to the insurance companies,  virtually guaranteed its failure from the beginning as both Howard Dean and Warren Buffet warned as far back as 2010. And was clear to many  Democrats who had wanted the public option. Remember that immediately after Obamacare passed the senate, when Democratic senator Tom Harkin, a public option supporter, was asked how he felt about passing the bill his answer was "it's better than nothing ". If asked the same question today he might not be so generous.

Obamacare's  failure has nothing to do with the criticism leveled by Republicans, most of which are patently dishonest, motivated by politics,and based on distortion and flat out lying.  Republicans would prefer no real healthcare reform at all, and in fact it was blatant lies about the public option,  ( "pulling the plug on grandma" to name one) that Obama and the news media were both too weak and inept to refute which partially led to Obama's eventual sell out to the health insurance lobby in  the kind of mealy-mouthed compromise Obama always engages in believing he is giving something  both sides will accept and then ends up with nothing of real value. Unfortunately for the country and the Democratic agenda, Obama's idea of wisdom  has been to actually split the baby,  giving a legislative half to each side in the hopes that everyone will be satisfied,  then can't understand when everyone but his most blind supporters are disgusted.  There is no better example of this than Obamacare.

What was needed and what would have been real reform was the public healthcare option (before her own capitulation to Obama and betrayal of her conscience Nancy Pelosi called the public option "the centerpiece of healthcare reform")  which had the votes in a Democratically controlled congress to pass, was backed by the American people in poll after poll by large majorities and would have given Americans the choice of leaving their insurance companies for a government run program similar to Medicare.  Obamacare is just the opposite and is predicated on trying to force 32 million uninsured people to run to the insurance companies to purchase policies despite the fact that these same insurance companies were part of the problem in the first place.

What will soon be apparent once the glitches with the web sites are fixed is that Obamacare will not get remotely close to the 32 million needed to make the program work.  And that will have nothing to do with the web site but what people see on the web site once they get there.

As Robert F. Frank pointed out in the business section of the NY Times, for Obamacare to succeed, all 32 million young, healthy uninsured people need to buy into the program and purchase insurance. All of them.  One look at the proposed premiums for the bottom tier plans designed to attract those 32 million and anyone not blinded by wishful thinking could have seen that  Obamacare was going to fail.

 The cost alone of these low end policies are producing sticker shock when people see them. It gets worse when people see what the insurance companies are actually offering for these premiums. That's when they get the second shock.

Many uninsured are finding that the bronze or lowest end policies are being priced in the range of $300 a month and up on average and that they come with $6,000  yearly deductibles to be paid out of pocket before they get full coverage. Until then they pay  40% in co-pays until the $6,000 out of pocket is reached in addition to the monthly premiums.And again, this is for the bottom tier polices for a single person, not a family. Costs to a family are higher.

It doesn't take a Warren Buffet to figure out that young, healthy uninsured Americans who are largely uninsured because they cant afford health insurance in the first place are not going to be flocking to buy these policies for the privilege of having a health insurance card in their wallets that requires another $6,000 out of pocket before their expenses are fully covered and includes co-pays of 40% of all initial costs until that  $6,000 is reached. What most of them will do is what they have been doing -- live without insurance and go to an emergency room if they need medical care where the law says they have to be treated whether they have insurance or not.

The returns so far on Obamacare  bear this out and spell disaster. It's not about glitches on the web site. The percentage of people who get to the site who are filling out applications is minisucle -- as of this writing approximately 6 million hits resulting in 750,000 applications,or a little better than 10% of those visiting the site. And remember, applications are not enrollments -- they are only people filling out a required general application before they are even able to see what's being offered and does not obligate an applicant to choose a plan. And so far most aren't.

The percentage of people actually enrolling in a plan compared to those who have filled out applications is even smaller. According to the latest figures ( obviously subject to change) there have been approximately 168,000  actual enrollments from almost 750,000 applications or about 2% of those who apply actually enroll. There is no reason to think these percentages will change  substantially when the glitches are fixed and volume increases because the more people that get to the web site and see what is being offered and for how much,  the more people will get the bad news.

While the White House is so far refusing to release figures showing actual enrollments,(that will come in mid-November) the estimates are based on state run exchanges as well as data from and estimates from health insurance industry experts and companies processing enrollments. Based on the numbers and the need for all 32 million young healthy uninsured people to purchase policies for Obamacare to work, it's not going to work.

Yes it's early but not that early since enrollment has to occur before the end of December to avoid the $95 penalty for not having insurance,  and so far the actual number of enrollments is about 0.01%  of what is needed.

A healthcare industry analyst has said that he believes that so far, most of those who are actually signing up are not the young, healthy target market, but older and sicker people and people signing up for expanded Medicaid. 

Based on what the insurance companies are charging for low end policies and what is being offered for the money, it's no wonder healthy young people who couldn't afford insurance in the first place are so far saying thanks but no thanks. There may be some anecdotal exceptions but not enough to matter. One college student who works part time out in the midwest wrote that he purchased a policy for $70 a month which included his government subsidy ( that's still $840 a year for a college student working part time) but didn't say what he was getting for his money. And maybe he didn't check.

Low end policies costing $300 a month and up are the average for single people making $40,000 a year and less but higher or lower depending on where you live ($611 in New York City, $218 in parts of upstate Rochester NY, $337 in other parts of Rochester)  on top of $6,000 deductibles, 40% co-pays and the best hospitals and doctors excluded  from the policy's networks. It's everything one would have expected from the insurance companies who authored this debacle of a law and everything the public option which Obama dropped, was designed to fix and replace.

Democrats are already starting to bail out with ten Democrats in the senate calling for a delay in the deadline for enrollment and a year's delay in the $95 penalty. But a delay isnt the answer. An overhaul is. 

Congressional Democrats should start getting out in front of what is going to be a mammoth failure, and start running on the idea of  having supported a public option in the first place,  promoting the idea of a Democratic congress in 2014 passing the public option to make this work. If that sounds like its throwing Obama and Obamacare under the bus, it might be. But its not like he doesn't deserve it and hasn't done the same to almost everyone else. And is the right thing to do in terms of policy.

For the moment the problems with the web site are buying time,  obscuring and delaying and to a great extent, providing temporary cover for the failure to come. While Democrats and Democratic strategists have not exactly demonstrated great skill strategically over the last 15 years in the world of politics and messaging, especially in a crisis, and even more so in standing up to Republicans, Democrats need to take advantage of the time they are being given, get out from under Obamacare, lay the groundwork for a public option as an alternative for a Democratic congress in 2014, and not let the failures of Obama and Nancy Pelosi who went along with this mess be their own.

Obama has said a number of times in response to the problems with Obamacare, "don't destroy it, fix it." The best way, maybe the only way to fix it is to do what Howard Dean said to do --  junk it. And replace it with a public option.

UPDATE: To underscore the impending failure of Obamacare, the New York Times, on  Oct.24,2013, published an article showing how Obamacare is already failing in the rural areas of the country. In Orange County Indiana, a silver policy, the second cheapest on the exchanges, for a single man, age 50, costs $487.11 per month with all the aforementioned deductibles. In Baker County Ga. the same plan is $644.05 per month. The same plan in metropolitan Atlanta is $320.06, half the cost in the rural areas but still significant for people who couldn't afford insurance in the first place because of their incomes, and burdened with high deductibles, out of pockets and with the best doctors and hospitals excluded from the plans' networks.

In Wyoming there is still only a single insurer because most insurance companies don't see enough profit  potential in a state with a population of 620,000 and have abandoned Wyoming as a market. So the idea of the exchanges bringing down the high costs of premiums because of competition is not just a myth there, it's non-existent.

Which underscores the reason for and need for the public option -- leaving healthcare  and it's costs to the health insurance industry as Obamacare does, was the problem in the first place.  And Obsmacare does nothing to fix it. Instead of a government run public option where the government is NOT in it for a profit and would make no decisions based on profit and would have provided full healthcare coverage to people for as little as $100 a month,the benefits of  Obamacare go more to the insurance companies who wrote the law than people and are designed to achieve the same goal as always -- profit. Which in the end may result in Obamacare  being remembered for being The Unaffordable Care Act.


Anonymous said...

I wouldn't be surprised if someone in the administration concocted all the website problems to delay reaction to the high deductibles and copays. Not sure if Obama could think up such a strategy, himself, but he'd go along (such as with the "fainting" pregnant woman.

Why did Nancy Pelosi back down? All I can think of is that she didn't mak enough effort to see the future (or the industry swooped in and paid her off.)

Anonymous said...

I've noticed you always have something to say, but you never offer up any solutions. If your brain was so big you'd come up with solutions rather than bitch from the sidelines, hence the the word--pinhead.

Marc Rubin said...

Actually it's you who are the pinhead though admittedly in your case that's an insult to pinheads. You clearly have less than a 3rd grade reading level and no reading comprehension.

I mention the solution clearly and repeatedly and it's obvious to anyone who isn't a pinhead. The solution I state is the public option . It's stated clearly 5 times in the last four paragraphs alone showing that you're not only a pinhead but an embarrassingly pathetic one . Ask your babysitter to read the column out loud and explain it to you. Then consider joining pinheads anonymous. You're already halfway there.