I wrote this comment to Dan Mitchell’s post, “Question of the Week: Will Obamacare Collapse?”
I think the Affordable Care Act will collapse because our government bureaucracy has finally found a law so complex and convoluted that they cannot translate it into workable government programs. Although I would enjoy a dramatic "Release the Kraken" collapse of the Affordable Care Act I am afraid we are destined to endure a "Erma Bombeck" type collapse. One day we will look at our newly planted garden and realize that the green stuff growing out there is just weeds and that may be we should restrict our future experiments in gardening to the vegetable section of the grocery store. The Affordable Care Act is just a bunch of weeds in our health care garden and no amount of weeding by our government bureaucracy is going to make it work better than our existing health care system. Ultimately the law fell prey to the main instigators of economic entropy, Murphy’s law and the Peter Principle. So let me count the ways the Affordable Care Act has failed us.
1. A remark by Juan Williams reminded me that there is an easy alternative to the Affordable Care Act. As a healthy person who purchases their health insurance through the individual market, I was better off with the health insurance I got before the Affordable Care Act. I can safely say that I would be much better off if the Affordable Care Act quietly disappeared. So I am quietly rooting for Team Murphy to triumph.
2. Although many people complain about the Individual Mandate there are very few people who can explain how this arbitrary method of cost shifting is better than the existing system. The problem is how does society pay for the health care of those who are uninsured and chronically ill. The Affordable Care Act solution is spread these costs over the smallest insurance group market, the individual health insurance market. In comparison the existing system is far more equitable since it spreads the costs over a larger population. When we realize that we are sacrificing one of our freedoms so that we can implement a less equitable cost sharing method, we come to the inevitable conclusion that the person who crafted this part of the law was in over their head. Way to go Peter!
3. The big question in 2014 is what will a bronze level plan cost? Will it cost closer to the individual market rate of $5,000 for a family or the large group rate of $15,000? There are several unions having a panic attack right now because they think it will be closer to $5,000. Businesses look at this price as a golden opportunity to dump their employees into the exchanges and get out of the health insurance business. I realize the long term goal for businesses was to get out of the health insurance business but I do not think the unions or businesses expected it to happen this quickly. This is as close to a "Release the Kraken" moment we are going to get. Chalk this one up to Team Murphy!
4. The employer mandate has been delayed for at least one year and Ezra Klein is arguing that the employer mandate shouldn’t be delayed, it should be repealed. If there is no employer mandate, the Affordable Care Act becomes an even a bigger mess to implement. One of the reasons some businesses were lobbying for Medicaid expansion was to reduce the size of their employer mandate penalty. I suspect they are no longer interested in Medicaid expansion. Good luck with that Medicaid expansion. Chalk this one up to Team Murphy!
5. So let’s not forget this Heritage Foundation list.
1. The CLASS Act: ABANDONED, THEN REPEALED
One Democrat famously called this new long-term care entitlement “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of”””and so it proved. In the fall of 2011, the Department of Health and Human Services (HHS) admitted CLASS could not be implemented in a fiscally sound manner””and Congress eventually repealed the program outright.
2. Exchanges: MISSED DEADLINES
Most states resisted Obamacare’s call to create insurance exchanges, choosing to let Washington create a federally run exchange instead. However, a Government Accountability Office report released last month noted that “critical” activities to create a federal exchange have not been completed, and the missed deadlines “suggest a potential for challenges going forward.”
3. HHS mandate: DELAYED; UNDER LEGAL CHALLENGE
Last year, the Administration announced a partial delay for Obamacare’s anti-conscience mandate. However, many employers have filed legal actions against the mandate, which forces them to fund products they find morally objectionable or pay massive fines.
>>> Get the latest on Hobby Lobby’s case against the HHS mandate
4. Small business plan choice: DELAYED
The Administration announced in April that workers will not be able to choose plans from different health insurers in the small business exchanges next year””a delay that liberal blogger Joe Klein called “a really bad sign” of “Obamacare incompetence.”
5. Child-only plans: UNINTENDED CONSEQUENCES
A drafting error in Obamacare has actually led to less access to care for children with pre-existing conditions. A 2011 report found that in 17 states, insurers are no longer selling child-only health insurance plans, because they fear that individuals will apply for coverage only after being diagnosed with a costly illness.
6. Basic health plan: DELAYED
This government-run plan for states, created as part of Obamacare, has also been delayed, prompting one Democrat to criticize the Administration for failing to “live up” to the law and implement it as written.
7. High-risk pools: UNDERPERFORMING; FUNDING LOW
This program for individuals with pre-existing conditions faced higher costs and lower enrollment than advertised. Though it was originally projected to cover up to 700,000 individuals, only about 110,000 have enrolled””yet the Administration had to halt new enrollment and take other radical measures to prevent the $5 billion program from running out of money.
8. Early retiree reinsurance: BROKE
The $5 billion in funding for this program was intended to last until 2014””but the program’s money ran out in 2011, two years ahead of schedule.
9. Waivers: UNINTENDED CONSEQUENCES
After the law passed, HHS discovered that some of its new mandates would raise costs so much that employers would drop coverage rather than face skyrocketing premiums. Instead, the Administration announced a series of temporary waivers””and more than half the recipients of those waivers were members of union health insurance plans.
10. Co-ops: DEFUNDED
Congress blocked additional funding to this Obamacare program in January, and with good reason: In one case, a new health insurance co-op was called “fatally flawed” by Vermont’s state insurance commissioner.
11. “Employee free choice”: REPEALED
This provision, which would have allowed certain workers to use contributions from their employers to buy exchange health plans, was repealed in April 2011, as businesses considered it too complex and unworkable.
12. Medicaid expansion: REJECTED BY MANY STATES