ObamaCare is “smart government at work”

posted at 12:01 pm on July 10, 2013 by Ed Morrissey

That’s the theme of my column for The Week today, but before we get there, Investors Business Daily has a great example of the problem.  Earlier this week, Barack Obama tried to make the case that activist government is smart governance, but the administration’s biggest legislative victory proves the opposite.  After more than three years of preparation, the Affordable Care Act’s implementation is being hamstrung by these kinds of hurdles — at least according to the White House:

But the very next day, AP reported that a “computer system problem” has caused his administration to delay yet another piece of ObamaCare for at least a year.

The delay stems from a conflict between the law’s premium penalties for smokers and its restrictions on insurance rates. While ObamaCare forbids insurance companies from adjusting rates based on health status, it does let insurers impose a significant premium penalty on smokers.

At the same time, the law forbids insurance companies from charging older people more than three times what they charge younger people. The problem is that the premiums for an older smoker can end up more than three times that of a young smoker once you include the penalties.

Late last month, Obama’s tech-savvy regulators quietly told insurance companies that they simply couldn’t figure out how to get their computers to square the two.

“The system currently cannot process a premium for a 65-year-old smoker that is more than three times the premium of a 21-year-old smoker,” it explained.

And a fix could take at least a year.

Meanwhile, the administration tacitly admitted last week that its promise of real-time verification of a consumer’s eligibility to buy subsidized coverage at an ObamaCare exchange wasn’t exactly panning out.

Under ObamaCare, only those who don’t have access to “affordable” insurance at work can buy coverage in an exchange, and only those below certain income levels are eligible for tax subsidies.

Rather than a high-tech instant check, the administration told states they could simply take the applicants’ word for it when it comes to their employer-provided coverage, as well as their “projected annual household income,” without the need for “further verification.”

The smoker penalties are a relatively minor issue.  Taxpayer subsidies go to the heart of the law.  That’s how the administration and Democrats sold ObamaCare in the first place as a cost-neutral benefit to the working and middle class.  They claimed that the subsidies would allow only those who needed assistance to buy their own health insurance in state exchanges, balanced by the fines imposed on businesses for not providing health coverage and taxes paid by everyone else.  Now the administration proposes to allow anyone to claim subsidies without any check on those claims, which will create a Mack truck-sized opening for fraud, abuse, and waste.

If the Obama administration couldn’t get its own legislative priority in shape for on-time implementation in three-plus years, what does that say about its performance in other areas?  And why not delay the individual mandate until this verification system is ready to protect taxpayers against waste, fraud, and abuse? To do so would be to stiff supporters of their long-awaited subsidies just before the midterm elections, that’s why:

The individual mandate will get a waiver of its own, one likely to cost taxpayers billions in unneeded subsidies. The ACA offers public assistance to taxpayers at certain income levels to make the mandated health insurance more affordable, predicated on proof of income levels and insurance requirements. The law requires the exchanges to verify those income levels, but at least for the first year, the White House wants to waive verification. Instead, taxpayer subsidies will get assigned on an honor system.

Bear in mind that the IRS, which knows practically every detail of taxpayer income, will have the role of enforcer in this mandate. Why, then, does the administration need a delay in verification when taxpayer money is on the line? They have had more than three years to develop a system that communicates between state exchanges and the IRS to expedite verification so that qualifying applicants can get the necessary subsidies to buy the required insurance. National Journal provided a handy chart to explain the complexity involved as a way to defend the delay.

Interestingly, the White House didn’t go as far on the individual mandate as it did for businesses. If the administration can’t handle the verification process for the individual mandate, why not delay the imposition of it along with the employer mandate until 2015? Perhaps they don’t want the political headache of suspending the subsidies they’ve promised for more than three years to a significant chunk of the electorate right before the 2014 midterm elections. Instead, they seem more than happy to open the system up to at least a full year of potential fraud and abuse in a system that’s supposed to reduce both through greater governmental intervention.

This series of retreats after three years of preparation make it clear that the law’s critics were correct. The ACA creates far too much complexity for government to handle, even a government that made this the crowning achievement of its administration. The Obama administration’s serial admissions of incompetence on the rollout of its signature legislation not only calls into question the future of the health-insurance industry under the provisions of ObamaCare, but also the competency of the administration on tasks with lower priorities for the White House.

These delays and choices are entirely driven by midterm politics — which is another danger of activist government. It’s one reason that the founders chose to limit the power of the federal government, a decision that seems wiser with each passing day. To paraphrase Thomas Jefferson, that government which governs least governs smartest.

Speaking of smart, Ramesh Ponnuru offered an intelligent take earlier this week on ObamaCare’s six big problems, none of which have to do with Republican “sabotage,” as some of its defenders have now taken to claiming.  I take that back — one of the problems does address that point:

Fourth, the administration is not following previous norms about how to build public support for a new program. Instead, it has adopted a whatever-it-takes mentality to overcome the opposition. It will use force or stealth as needed to get its way. The delay in the employer mandate should quiet business opposition until after the 2014 election; the IRS decision should keep non-cooperating states from opting out of exchanges.

Unlike most previous social-policy milestones, this law was jammed through Congress over the opposition of all Republicans, some Democrats and most of the public. The financial crisis had delivered the Democrats such large majorities in 2008 that they could accomplish longstanding ideological goals that had nothing to do with that crisis. Nor did Obama himself have a mandate for the law, having campaigned against some of its most controversial features — for instance, the individual mandate and the new taxes on health insurance — during his 2008 presidential run.

Fifth, the law’s problems aren’t simply the result of Republican sabotage, as many of its supporters say. It is an odd defense of a law — especially one that most people oppose — to say that it would work well if only the country were uniformly behind it. And last week’s delay undermines this defense. The administration simply flinched from the economic consequences of the law; Republicans had nothing to do with it.

Sixth, opposition to Obamacare is reasonable. Democrats have been portraying any disagreement with the law as pathological, a break from the standard practice in which the losing side of a legislative debate reconciles itself to defeat and works with the winners. But the law is itself a break from standard practices in several respects, it remains unpopular, and the administration has now effectively conceded that it’s seriously flawed and not set in stone.

The administration flinched from both the economic and the political consequences of the bill, which are tightly intertwined.  That’s no one’s fault but this administration’s, and the Democrats in Congress that shoved it down the throats of American voters who have always been opposed to it, and are now as opposed than ever.


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Come on – this is too easy – “Smart Government” is an oxymoron.

dentarthurdent on July 10, 2013 at 12:04 PM

Ed, here’s a perfect word picture on Obamacare: TRAINWRECK.

conservative pilgrim on July 10, 2013 at 12:04 PM

The smoker penalties are a relatively minor issue.

Oh really? Per the equal protection clause…?

Let’s debate who else should pay higher premiums.

jetboy… Oh jetboy…

Akzed on July 10, 2013 at 12:06 PM

Ohh, riiight, Obama be smrurt. Smrurt govinmen. Riiight. Smrurt.

Lourdes on July 10, 2013 at 12:09 PM

Maybe it’ll fix itself if they just throw another few hundred billion more at it. That’s the Democrat solution to everything, isn’t it?

This thing needs to be scrapped, but there is no way Democrats will allow that to happen no matter any claims to being ‘unhappy’ with it at this point.

Liam on July 10, 2013 at 12:10 PM

Low IQ liberals are obsessed about using the word “smart” in very dumb policy they create…

mnjg on July 10, 2013 at 12:11 PM

No Worries,Hopey will make it smarter’er!!

canopfor on July 10, 2013 at 12:15 PM

They shoved it down our throats.
We should regurgitate it.
House, please defund this turd.

freedomfirst on July 10, 2013 at 12:16 PM

The bottom line is Obama figured out he was leading his little 2014 lambs to the slaughter….

supersport667 on July 10, 2013 at 12:17 PM

Low IQ liberals are obsessed about using the word “smart” in very dumb policy they create…

mnjg on July 10, 2013 at 12:11 PM

Same as how they use “common sense” for every gun control and other anti-freedom scheme they devise….

dentarthurdent on July 10, 2013 at 12:17 PM

Now that all have had the proper time to read this monster, there seems to be a collective “Oh Shit” moment before us.

Wasn’t it just a few weeks ago that all the ACA supporters were telling us ” It.Is.The.Law” ?

If they cannot follow the law, as they have written it, what confidence to they deserve from us ?

Jabberwock on July 10, 2013 at 12:18 PM

I’m reminded of a time about 20 years ago when I was a systems analyst and statistician for the GCRC (General Clinical Research Centers.) Part of our job was to provide statistical support for medical research projects funded by the NIH. There were a lot of statistical software packages on the market such as SAS, Stata, BMP, Minitab, etc. but the government had funded its own program called Prophet which was going to be tailored to the needs of the medical researchers.

That piece of software was the biggest piece of **** ever. It was difficult to use, inaccurate and about 2 years behind the curve. It was still offering a command-line interface when other software packages had moved onto menu systems and graphical interfaces. No researcher ever seriously used it to my knowledge. Why bother when the private market provided something much better?

Yet, every year at the annual conference we had to still through yet another presentation of the wonders of Prophet.

The basic problem is that there was no incentive for the makers of Prophet to do anything better. They had their captive audience and they sure didn’t have to compete with SAS or BMP to stay alive.

Hence the software problems with ObamaCare’s implementation. Besides the horrendous nightmare of trying to manage all of this data, there is no real penalty for failure. If this were the private market, heads would be rolling right now and probably the whole shebang would be looking to go out of business as investors take a powder.

There’s no penalty for failure and so they fail.

PackerBronco on July 10, 2013 at 12:20 PM

They shoved it down our throats.
We should regurgitate it.
House, please defund this turd.

freedomfirst on July 10, 2013 at 12:16 PM

…or shove it back down their throats. Make the leftists who created this live by it in its entirety. No delays, no exceptions. Follow the law.

Like my wife tells my kids, “your choices have consequences”. Teaching accountability that leftists clearly don’t understand.

freedomfirst on July 10, 2013 at 12:22 PM

I’m reminded of a time about 20 years ago when I was a systems analyst and statistician for the GCRC (General Clinical Research Centers.) Part of our job was to provide statistical support for medical research projects funded by the NIH. There were a lot of statistical software packages on the market such as SAS, Stata, BMP, Minitab, etc. but the government had funded its own program called Prophet which was going to be tailored to the needs of the medical researchers.

That piece of software was the biggest piece of **** ever. It was difficult to use, inaccurate and about 2 years behind the curve. It was still offering a command-line interface when other software packages had moved onto menu systems and graphical interfaces. No researcher ever seriously used it to my knowledge. Why bother when the private market provided something much better?

Yet, every year at the annual conference we had to still through yet another presentation of the wonders of Prophet.

The basic problem is that there was no incentive for the makers of Prophet to do anything better. They had their captive audience and they sure didn’t have to compete with SAS or BMP to stay alive.

Hence the software problems with ObamaCare’s implementation. Besides the horrendous nightmare of trying to manage all of this data, there is no real penalty for failure. If this were the private market, heads would be rolling right now and probably the whole shebang would be looking to go out of business as investors take a powder.

There’s no penalty for failure and so they fail.

PackerBronco on July 10, 2013 at 12:20 PM

It reminds me of some of the crap programs needed to order military supplies, that was only 7 years ago but they reminded me of freaking lotus and early word programs before microsoft came in the nineties.

rob verdi on July 10, 2013 at 12:24 PM

Maybe it’ll fix itself if they just throw another few hundred billion more at it. That’s the Democrat solution to everything, isn’t it?

Liam on July 10, 2013 at 12:10 PM

It’s the big government solution.

Basic rule of bureaucracy: Government grows through failure.

If something doesn’t work, it’s because it wasn’t funded well enough, or didn’t have enough control, wasn’t big enough, etc. etc.

By contrast, businesses become leaner and more innovative through failure and the fear of failure. That’s because if a business fails, the people involved LOSE EVERYTHING.

Bambi thinks that because Google is a success and He is as smart as the people who run Google (so HE thinks), he can make government as efficient and as smart as Google.

Never happened and never will.

PackerBronco on July 10, 2013 at 12:25 PM

“at work”???

I thought he ordered it to go on a smoke break for a year.

faraway on July 10, 2013 at 12:28 PM

Obamacare is elitist arrogance, hubris, and a lust for power and control at work.

Our self-anointed rulers don’t think We the People are capable of making decisions on our own and feel that they are better equipped to make those decisions for us. They are not and cannot ever be.

This is what makes my blood boil more than anything. I don’t want smarter or better managed government; I want small, limited government that will leave me the Heck alone.

I’m sick f hearing Obama spew his BS about the “delivery if government services”. Government shouldn’t deliver any services. None.

Just go away!

Charlemagne on July 10, 2013 at 12:32 PM

Heh. Check out the new Drudge headline.

a capella on July 10, 2013 at 12:38 PM

Yeah, Obamacare is great!! Very SMART TOO!!

Wanna see another example of SMART proposals by
the BLITHERING IDIOT PARTY (formerly known as the Democrat party)

Check this out:

http://thehill.com/blogs/floor-action/house/309829-dems-propose-historical-park-on-the-moon

ToddPA on July 10, 2013 at 12:41 PM

Check this out:

http://thehill.com/blogs/floor-action/house/309829-dems-propose-historical-park-on-the-moon

ToddPA on July 10, 2013 at 12:41 PM

Adds whole new meaning to say Democrat spending ideas are out of this world.

Liam on July 10, 2013 at 12:44 PM

Hence the software problems with ObamaCare’s implementation. Besides the horrendous nightmare of trying to manage all of this data, there is no real penalty for failure. If this were the private market, heads would be rolling right now and probably the whole shebang would be looking to go out of business as investors take a powder.

There’s no penalty for failure and so they fail.

PackerBronco on July 10, 2013 at 12:20 PM

I was in the DoD software business in the late 80s and early 90s – when DoD (or at least the Air Force) MANDATED the use of Ada for ALL computer systems. Total failure and HUGE waste of money forcing everyone to use a programming language designed for a specific purpose, for other systems that should not have used that particular language.

dentarthurdent on July 10, 2013 at 12:45 PM

“I am so smart. S-m-r-t.”

http://www.youtube.com/watch?v=DhrfhjLd9e4

Fallon on July 10, 2013 at 12:51 PM

You can bet that his new “smart government” IT plans will be outsourced to his campaign donors, like Google.

Not only will Google spy on us, we will be paying them to do it.

PattyJ on July 10, 2013 at 12:52 PM

Check this out:

http://thehill.com/blogs/floor-action/house/309829-dems-propose-historical-park-on-the-moon

ToddPA on July 10, 2013 at 12:41 PM

If we put a park up there, won’t it make the moon wobble or, maybe, become so overly populated that it will tip over and capsize?

Fallon on July 10, 2013 at 12:56 PM

http://thehill.com/blogs/floor-action/house/309829-dems-propose-historical-park-on-the-moon ToddPA on July 10, 2013 at 12:41 PM

Ever seen The Secret War of Lisa Simpson Simpsons episode where the kids are watching a movie in class, and the narrator says, “The moon belongs to America…”?

Akzed on July 10, 2013 at 1:04 PM

Moron involved in oxymoron, news at 11….

hillsoftx on July 10, 2013 at 1:23 PM

“I’d give myself a solid B+ for rolling out my HellCare legislation.”
B. Heusein 0bama

Affirmative action in, affirmative action out (AAIAAO).

jukin3 on July 10, 2013 at 1:40 PM

NO REPUBLICAN VOTED FOR THIS LAW.

antisocial on July 10, 2013 at 1:49 PM

Just had to pass it in order t find out hat was in it…and what did Congress do?

Yep.

So…who is dumber?

The smartest dang guy in the whole danged entire United States…

Or the collection of truly stupid people who elected him…

Or the members of Congress who decided that reading a bill before it is passed into law is just too much trouble [not like it is not part of their job or something]…

One of the key points which will make or break an election campaign in 2016 is establishing how quickly after being elected a particular candidate can repeal all of Obamacare. All of it.

Or, showing how soon a new Department of Justice will be handing down indictments for a slew of members of the Obama Administration…from the top empty chair on down…fraud, racketeering, money laundering, conspiracy and a host of other charges.

coldwarrior on July 10, 2013 at 1:56 PM

My robust and confident inner-cynic maintains that after a billion dollars of government propaganda on the airwaves supporting this POS legislation, people will LOVE it. The polls will support it and Democrats will finally be able to pass single payer….as a cost savings from where we will be by then.

When the majority of the nation doesn’t care or lacks the fundamental skills required to analyze complex issues, the most emotional and humanitarian argument always wins.

hisfrogness on July 10, 2013 at 2:57 PM

Well, Nancy P., we’ve found out what’s in it. How do you feel about it now?

RebeccaH on July 10, 2013 at 3:32 PM

The administration simply flinched from the economic consequences of the law; Republicans had nothing to do with it.

Of course the Republicans had something to do with it. They would take over the Senate in 2015 and repeal it if too many people lost their employer-paid health insurance before November 2014.

Then, there’s all those dirty, rotten, nasty, no-good, foot-dragging Republican Governors who haven’t set up the state insurance exchanges and let the Administration do it. You know, the kind of Governor who listens to his/her voters, who now govern 60% of the states (still a 53% majority of Obama’s 57 states).

But the Republicans do have a good argument even before Obamacare is fully implemented. Obama is handing out all the goodies to the cheaters before the election, but delaying the mandate until after the election, trying to hide the pain from those who will suffer.
We (Republicans) didn’t vote for it, and we know now what’s in it, and YOU won’t like it. We told you so!!! If the Democrats put it off, vote for us in 2014, and we’ll get rid of it for good.

Steve Z on July 10, 2013 at 4:20 PM