Commentary Magazine


ObamaCare Has Another Bad Week

The issue on which President Obama is currently fixated on silencing dissent (the debate is “over”) is ObamaCare. This is understandable: the public still hates the law, and for good reason. Obama’s because-I-said-so routine has not, unsurprisingly, fooled the many Americans who had their doctors and health care taken away from them into forgetting the basic cruelty of the president’s health-care reform. But the hope of ObamaCare supporters was that the worst was behind them. Unfortunately for them, the bad news just keeps on coming.

Last week, the Washington Post editorial board declared that “ObamaCare’s critics have had a bad week.” They have not replicated that again this week. The truth is that there is plenty of bad news for the suffocating regulatory beast that is the ACA, but two stories this week stood out. The first was what may herald the next wave of insurance cancellations. The Obama administration is considering largely banning what’s known as “fixed indemnity insurance.” Peter Suderman reported a few days ago:

Fixed indemnity coverage is a form of limited, low-cost insurance that pays out a flat rate in response to certain prescribed events—say $75 for a doctor’s visit or $15 for a prescription—regardless of the cost. Because the coverage payouts aren’t variable, and because some major medical costs aren’t covered at all, monthly premiums are often quite low, meaning that it offers a way for people to have some coverage at relatively affordable rates.

It may not be an option for much longer. The proposed regulation would essentially outlaw standalone indemnity policies, making it illegal to sell them except as an addendum to the more robust, more expensive plans that meet the law’s minimum essential benefits requirements.  Under the proposed rules, indemnity insurance sold by itself would be classified in such a way that it has to meet all the requirements for “major medical coverage.”

It’s as if regulators suddenly decided that anyone selling scooters had to make sure those scooters were as powerful (and thus expensive) as motorcycles. Otherwise, scooters could only be sold as sidecars to people who already owned motorcycles.

Suderman notes that this would be at cross-purposes with the idea that ObamaCare seeks to increase the ranks of the insured, since such plans could be purchased along with the mandate penalty to at least have some insurance. But, as he points out in answering his own question, ObamaCare is about controlling what kind of insurance plans the government’s confused bureaucrats want you to have. ObamaCare, then, seems likely to continue to kick the insured off their plans and leave many more without coverage. This was by design, but the Obama administration hoped to avoid this kind of story getting much attention. Given the outcry over the last round of millions of cancellation notices, that seems unlikely.

The second story hit yesterday, but needs a brief bit of background. Last year Sarah Kliff, at the time writing for the Washington Post but who has since joined, wrote a piece headlined “Oregon may be the White House’s favorite health exchange,” touting the Cover Oregon ObamaCare exchange’s potential for proving the overall reform law’s worth. The federal government sunk $250 million into it to ensure it would thrive. Instead, it has been a complete disaster, and now the Washington Post explains:

The Obama administration is poised to take over Oregon’s broken health insurance exchange, according to officials familiar with the decision who say that it reflects federal officials’ conclusion that several state-run marketplaces may be too dysfunctional to fix.

In public, the board overseeing Cover Oregon is scheduled to vote Friday whether to join the federal insurance marketplace that sells health plans in most of the country under the Affordable Care Act. Behind the scenes, the officials say, federal and Oregon officials already have agreed that closing down the state marketplace is the best path to rescue what has been the country’s only one to fail so spectacularly that no resident has been able to sign up for coverage online since it opened early last fall.

Unfixable, “fail so spectacularly”–these are not descriptions the White House was hoping to hear. But that’s the reality, and not just for Oregon. As the Post notes, the utter failure in Oregon is directing attention to other “faltering exchanges” in places like Massachusetts and Maryland. Beyond the obvious speciousness of the ObamaCare promises, this also shows the fallacy of one of the ObamaCare defenders’ treasured tropes.

As the New York Times wrote last month, the disparity in state exchanges led to the spin that “Obamacare looks less like a sweeping federal overhaul than a collection of individual ventures playing out unevenly, state to state, in the laboratories of democracy.” It’s easy to see the attraction in this claim, but it’s also delusional, as both of this week’s stories make clear.

Were the states left to experiment with the needs and preferences of their residents, the administration wouldn’t be on a steady march to eliminate the very insurance plans these residents chose. And the failure of the Oregon exchange, and the looming disasters in other exchanges, demonstrate the ObamaCare problems that persist across state lines and the taxpayer dollars the federal government sinks into hopeless programs in a futile attempt to stave off collapse before taking them over outright.

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