Saturday, December 14, 2013

Not Enough Carrot, Not Enough Stick

The Washington Post editorial board has weighed in on the Act Previously Known as Obamacare. Today's editorial, "Two Problems That Could Undermine the Affordable Care Act," can be summed up in six words:
  1. Not enough carrot
  2. Not enough stick
The article begins with an admission that "enrollment is lagging."
To work well, the law’s new insurance marketplaces need millions to sign up and enough healthy people paying into the system to offset the medical costs of the sick. But this week the Department of Health and Human Services admitted that enrollment is lagging. 
Calling this enrollment "lagging" libels laggards everywhere. We still don't have meaningful numbers of people who have searched for a plan on, found a plan, selected that plan, and sent their full first month's premium into the provider. We do know that the numbers are so far short of the Administration's definition of "success" (seven million people by March 31st) that we're reduced to hoping they are somewhere above "epic fail" (less Americans insured on Jan. 1st than before the law kicked in, including Medicaid signups).

In early November, after the website's first disastrous month, our President went before the cameras to explain, "Now, this is like having a really good product in the store and the cash registers don't work and there aren't enough parking spots and nobody can get through the door." By early December, Secretary Sebelius testified to the  effect that the doors now work and the parking lot is  open. The administration official who is actually in charge of the website, Henry Chao, admitted that the "cash registers" aren't just "not working"--they haven't been built yet. That's why nobody is using the number of paid-up, covered customers (the only number that might actually measure "success"). That's why what the Post calls "lagging" enrollment merely refers to the number of people who have put a product in their cart--whether they have paid or not.

If the product was good but the price was bad, people might put it in their cart while they dug around the couch for extra change. If the product was bad but the alternatives were nonexistent, people might put it in their cart while they search for something else. But if the product was good and the price was good and the cash register (or good-enough-for-government-work equivalent) actually worked, we'd see enrollment catching up to at least the number of people who lost their policies--five million and more.

Enrollment is so far below that mark that the only people who actually do know the numbers are begging insurance companies to cover people who haven't paid (yet). This product just isn't selling.

So--there isn't enough carrot. Which brings us to the Post's second criticism--there's not enough stick, either.

The "stick" (Penalty? Tax? Mandate? Suggestion? Ask a lawyer, accountant, or mystic--the answer depends on the problem Obama is trying to solve today!) is $95 or 1% of income for every unininsured person. That's $95 for the "young invincibles," the bungee-jumping, keg-standing party animals who got a free ride on their parents' policy until they turned 26 and now have to choose between actually paying premiums ("I thought Obamacare was free?!") and paying $95. Is that enough of a "stick" to get them to sign up?

Not yet.

The Post may be exactly right in its diagnosis, but what is its prescription? More gain? More pain? Given the irreconcilable differences between Republicans and Democrats between now and the 2014 elections, America may be doomed to suffer the worst of both worlds. That's why I think the Federal Health Union Act of 2014 is worth pursuing. Maybe I can get the Post to endorse it!

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