4
Doomed From the Start Why Obamacare's Disastrous Rollout is No Surprise Kimberly J. Morgan  KIMBERLY J. MORGA N is Associate Professor of Political Science and  International Affairs at George Washington University.  It would be an understatement to say that this month’s rollout of the Affordable Care Act, U.S. President Barack Obama’s initiative to ensure that all Americans have access to health insurance, has not gone according to  plan. On October 1, the online insurance marketplaces that are the lynchpin of Obamacare (as the law has colloquially become known) were opened for  business -- but it quickly became clear that they are not functioning properly. Computer malfunctions have prevented enrollment, consumers are frustrated, and politicians and pundits are attacking Obama for the resultant “ train wreck  [1].” The problems are all the more embarrassing given that publicly funded health-insurance programs are commonplace in most other countries. But the fact that the White House is having trouble implementing Obamacare also should not come as a particular surprise. It is no t that the Obama administration is especially incompetent. Rather, the program it is charged with executing is a complex public-private hybrid that has no real precedent elsewhere in the world. The blend is purely American: Policymakers in the United States have a history of jerry-rigging complicated programs of this sort precisely because they have little faith in government. The result is a self-fulfilling prophecy that fuels only deeper public cynicism about the welfare state. Among the advanced industrialized countries there is no real parallel to Obamacare. In part, that is because most countries established universal health insurance long ago, some fairly gradually. By contrast, the United States is abruptly expanding coverage to millions -- probably around seven million people will be purchasing insurance coverage through the new exchanges by 2014. Even the closest precedents fall far short of this. In the mid-1990s, Switzerland boosted health-insurance coverage to try to reach the four percent of the population that was not yet covered. But that was in a

Doomed From the Start

Embed Size (px)

Citation preview

7/27/2019 Doomed From the Start

http://slidepdf.com/reader/full/doomed-from-the-start 1/4

Doomed From the Start

Why Obamacare's Disastrous Rollout is No Surprise

Kimberly J. Morgan KIMBERLY J. MORGAN is Associate Professor of Political Science and 

 International Affairs at George Washington University. 

It would be an understatement to say that this month’s rollout of the

Affordable Care Act, U.S. President Barack Obama’s initiative to ensure that

all Americans have access to health insurance, has not gone according to

 plan. On October 1, the online insurance marketplaces that are the lynchpin

of Obamacare (as the law has colloquially become known) were opened for 

 business -- but it quickly became clear that they are not functioning properly.Computer malfunctions have prevented enrollment, consumers are frustrated,

and politicians and pundits are attacking Obama for the resultant “ train

wreck  [1].” The problems are all the more embarrassing given that publicly

funded health-insurance programs are commonplace in most other countries.

But the fact that the White House is having trouble implementing Obamacare

also should not come as a particular surprise. It is not that the Obamaadministration is especially incompetent. Rather, the program it is charged

with executing is a complex public-private hybrid that has no real precedentelsewhere in the world. The blend is purely American: Policymakers in the

United States have a history of jerry-rigging complicated programs of this

sort precisely because they have little faith in government. The result is a

self-fulfilling prophecy that fuels only deeper public cynicism about the

welfare state.

Among the advanced industrialized countries there is no real parallel to

Obamacare. In part, that is because most countries established universal

health insurance long ago, some fairly gradually. By contrast, the UnitedStates is abruptly expanding coverage to millions -- probably around seven

million people will be purchasing insurance coverage through the new

exchanges by 2014. Even the closest precedents fall far short of this. In the

mid-1990s, Switzerland boosted health-insurance coverage to try to reach thefour percent of the population that was not yet covered. But that was in a

7/27/2019 Doomed From the Start

http://slidepdf.com/reader/full/doomed-from-the-start 2/4

country whose entire population was seven million. In 2006, the Netherlands

adopted a health-care system in which individuals could choose their coverage from competing health plans. Yet, unlike in the United States,

virtually all individuals and their families were already covered, and the vast

majority opted to keep the plan they had.

The real source of Obamacare’s current problems lies in the law’s

complexity. A straightforward way to assure coverage would have been to

extend an existing, well-worn program to more people. This is how most

other countries guarantee health insurance. In the British National HealthService, there is little that beneficiaries need to do in order to receive health

insurance, as all residents are automatically entitled. Other countries rely on

 private intermediaries that provide insurance -- nonprofit insurance funds in

Germany or Switzerland, for example, or a mix of proprietary and nonprofitinsurers in the Netherlands. Even in those instances, benefits packages and

entitlements are highly standardized, making these health-care systems

relatively uncomplicated from the standpoint of beneficiaries.

In the United States, political antipathy to government programs precludes

this kind of straightforward administrative solution. Faced with such hostility,

 policymakers regularly rig up complex public-private, and often federal-state,

arrangements that are opaque to the public, difficult to administer, and

inefficient in their operation -- what Andrea Louise Campbell, a professor of  political science at the Massachusetts Institute of Technology, and I describe

as aRube Goldberg welfare state [2] -- because of the complicated way inwhich it achieves even basic tasks -- and what the political scientist Steven

Teles aptly labels a “kludgeocracy [3].” 

The Affordable Care Act’s health-insurance exchanges exemplify the

labyrinthine quality of U.S. social policy. The first hurdle for consumers is

figuring out if they are eligible for the new benefits: Although anyone lacking

insurance can shop for it on the new health-insurance marketplaces, onlythose with incomes in a certain range are eligible for subsidies. The subsidies

vary by income. Those already enrolled in a government health program such

as Medicare do not need to buy coverage on the exchanges, a source of 

confusion for  some seniors [4] who assumed they needed to shop for a new

 plan, perhaps because they (understandably) mixed up the exchanges with the

7/27/2019 Doomed From the Start

http://slidepdf.com/reader/full/doomed-from-the-start 3/4

open enrollment period for the marketized versions of Medicare -- the

Medicare Advantage and the Part D drug plan.

The new health-insurance exchanges are also meant to help people find out if 

their incomes are low enough to qualify for Medicaid, in which case they willget their insurance in a different fashion -- through the Medicaid program run

 by the state where they reside. Yet because the Supreme Court overturned the

Affordable Care Act’s mandate that states expand Medicaid, about half of the

state governments are refusing to do so. That means that eligibility standards

vary widely across the country. Thus, two people with the same poverty-lineincome in Arkansas and neighboring Mississippi will not be eligible for the

same health program: In Arkansas, the person will go on Medicaid, whereas

in Mississippi the person may choose to buy a plan on the health-insurance

exchange but would receive no subsidy for it.

The information systems underpinning the insurance marketplaces have to

mesh multiple government and private databases in order to determineeligibility, entitlement to benefits, and available plans. It is not surprising,

then, that the system has broken down in numerous instances. It also requires

considerable coordination between the federal government and the 50 states,

which are allowed to set up their own health-care exchanges. So far, only 17

states, including the District of Columbia, chose to manage their own

exchanges, while seven others entered into varying forms of federal-state partnerships. Another 27 states left it up to the federal government to set up

the exchange, and it is the federal marketplace, which has received a veryhigh volume of visitors, that has had the most operational difficulties.

The burdens of implementing Obamacare were dumped on a federal agency -

- the Centers for Medicare and Medicaid Services -- that already oversees

enormous national programs on a limited budget. Although the agency

received some funding increases, it operates with less than one-tenth the

number of federal employees of the Social Security Administration. Thosewho are fearful that the agency would gain too much influence over U.S.

health care systematically starved it of resources [5]. Thus, much of its work 

is outsourced to private contractors, whose performance is highly variable, as

the current problems in the health-insurance exchanges reveal [6].

7/27/2019 Doomed From the Start

http://slidepdf.com/reader/full/doomed-from-the-start 4/4

The larger irony here is that administering a complex public-private health-

care system often requires more government, not less. Yet the very sameimpulse that created this system also impairs the government agencies that

could effectively oversee it. The programs, as a result, are messy and

confusing. It should be no surprise that trust in government is so low.Obamacare’s early dif ficulties may provide an easy target for politicians, but

those politicians have only to look into the mirror to see who bears

responsibility.