Quotes of the day

Obamacare just got real.

Sure, there were some new rules and benefits over the last few years, but that was just a warmup. Starting today, all of the big pieces of the Affordable Care Act — the biggest domestic achievement of Barack Obama’s presidency and one of the most far-reaching changes in American social policy in decades — go into effect. And Americans will start to see, for better or worse, how the law really works…

The first specific hurdle the health care law has to clear, starting today, is the beginning of private health and Medicaid coverage for millions of Americans. It has to start smoothly, without a lot of horror stories of people showing up at doctors’ offices without coverage or being confused by what’s actually covered…

[Democrats are] hopeful that, between people’s ability to renew directly with their insurers, a better and faster federal website to enroll others, extensions of old health plans in some states through Obama’s administrative fix, and slimmer “catastrophic” health plans for people who can’t get those extensions, they’ve given people plenty of options to replace their coverage. But they’ll be watching closely, just in case.


More than 2 million people have signed up so far for health coverage under Obamacare, officials said Tuesday in trying to put the best face forward before the controversial health care reforms fully kick in with the start of 2014…

“Starting tomorrow, being a woman will no longer be a pre-existing condition,” Sebelius said on a conference call with journalists…

Anticipating possible problems in the enrollment system, Sebelius also advised in her blog post that “if you thought you enrolled in health coverage but aren’t showing up in the system, call your insurance company directly.”


Obtaining that coverage was an aggravating process. Maxine, a part-time worker at Jo-Ann Fabric and Craft Stores, first saw her existing insurance plan cancelled earlier this year because it didn’t comply with the Affordable Care Act. Then, when she turned to the government website to shop for an alternative, she faced technical glitches at every turn.

After nearly 80 hours online and more than a dozen hours on the phone, an enrollment application that never made it to the insurer, and a stinging case of premium sticker-shock, Baumgartner says the first payment to Anthem of Indiana is finally in the mail…

The Baumgartners are among the millions of Americans who are for the first time receiving government help to pay the bill. Their $699 monthly premium for a mid-tier “silver plan” was offset by a $595 a month tax subsidy, leaving a balance of just $104 out of pocket.

That amount is still about four times what they paid last year for coverage, Baumgartner said, but the new plan is loaded with added benefits.


HHS officials still won’t disclose how many of the 2.1 million they claim enrolled through the federal healthcare.gov website or one of the state-based exchanges actually paid for coverage

Later in the call, CNN’s Jim Acosta asked Bataille if she could at least say with confidence that a “very high percentage” of those 2.1 million had paid.

Instead of answering in the affirmative, Bataille said, “We are confident that those consumers have selected a plan and know what the next steps are for them in terms of securing coverage.”…

During the call, Bataille also declined to provide a demographic breakdown of those who have selected a plan so far or say how many of the 2.1 million signing up for insurance were previously uninsured.


In Washington and Nevada, only about 50 percent of enrollees have made their first premium payments. Those are the only states that provide the breakdown.

“The biggest risk now is people thinking that by picking a plan, that they’re insured, when in fact final step is paying the premium,” Larry Levitt, a senior vice president with the Kaiser Family Foundation, told The Hill. “I haven’t seen good numbers on how many people are paying premiums, so that to me is the uncertainty.”…

Joe Antos of the conservative American Enterprise Institute predicted the flood of applications would be too much for the administration and the insurers to handle before the newly covered head out to exercise their plans.

“There’s no way the insurance industry could hire enough people to process all that paperwork if the data was coming in correctly, and it’s not,” he said. “I think most people who think they have coverage will find some difficulty early in January.”


Beginning Wednesday, the Affordable Care Act imposes an annual fee on health insurers. The fee is projected to bring in $8 billion next year and roughly $100 billion over the next decade, making it one of the biggest under the law…

On Tuesday, America’s Health Insurance Plans President Karen Ignagni warned that the fee will end up hitting consumers in the form of higher premiums

An industry-commissioned study by consultant Oliver Wyman estimated that rates will rise in 2014 by up to 2.3 percent for that reason alone. By 2023, the study said, rates could be rising annually by up to 3.7 percent because of the tax.


Experts say the Obama administration faces a tall order in hitting the 7 million enrollees the Congressional Budget Office projected would sign up for ObamaCare in 2014.

The administration hasn’t released a breakdown of who is enrolling, but preliminary data coming out of the state-run exchanges indicates a large number of high-risk consumers.

“I don’t see how they could have the balanced risk pool that they need,” said Joe Antos of the conservative American Enterprise Institute. “The younger people with lower incomes already have education loans, car loans, and such, and these are people who, even with a generous subsidy, it’s still going to cost them money out of their pockets.”

Antos and John Holahan, a fellow at the nonpartisan Urban Institute, both said the final enrollment number for 2014 is likely be closer to 4 million or 5 million.


The heart of the issue, many of these people say, is that Obama and his inner circle had scant executive experience prior to arriving in the West Wing, and dim appreciation of the myriad ways the federal bureaucracy can frustrate an ambitious president. And above all, they had little apparent interest in the kind of organizational and motivational concepts that typically are the preoccupation of the most celebrated modern managers…

“There’s enormous value placed, within the White House, upon winning and then getting legislation passed, and there’s less and less value placed upon executing the law itself,” said former presidential adviser David Gergen, now director of the Center for Public Leadership at Harvard’s Kennedy School. “This is not their asset. They are much, much better at campaigning and at the public microphones than they are in governing and in management.”…

To listen to Obama discuss the rollout through the fall, he was still figuring out some of the finer points, too. If he had known healthcare.gov wasn’t going to work by its launch date, he said in mid-November, “I wouldn’t be going out saying, boy, this is going to be great.”

“In management circles, that’s an indictment,” said the longtime consultant. “How could you not know? And if no one told you, you’re still culpable for that too.”


It may be that 2014 is an even rougher year for the ACA than 2013 was, and I think that will be the crucial reason Republicans regain control of the Senate in the midterm elections. Here’s why.

First, some of Obamacare’s least popular provisions go into effect in 2014. This includes a new $60 billion tax on health insurers, which will be levied relative to premiums collected and directly passed on to consumers. And, of course, Obamacare’s requirement that individuals secure health insurance coverage (or pay a tax penalty) kicks in during the coming year as well.

Second, millions of Americans who buy their coverage on the individual market or get it through small employers will be shocked by just how much their premiums go up in 2014. The young and healthy will be especially susceptible to this rate shock, and this in turn will further drive them away from purchasing coverage in future years. Given skyrocketing premiums, the economic incentives for many of these “young invincibles” are aligned against buying coverage in the coming years. But these are also the people that the ACA most needs to be enrolled through its health insurance exchanges to offset the comparatively higher risk and costs associated with insuring the sick and old. These dynamics may lead to even higher premiums in the coming years.

Third, not only will millions of Americans on the individual and small group markets who like their plans be unable to keep them in 2014, but many will experience what it’s like to be unable to continue seeing the doctors they know and trust. As health insurers face pressure to keep costs down while providing the richer package of benefits that Obamacare mandates, many are limiting their networks of doctors and other health-care providers. A cancer survivor’s opinion article in the Wall Street Journal illustrated the horrible situation that Obamacare will place some Americans in: Being forced to choose between doctors that have been critical to their care or, in some cases, not having access to any of their existing health-care providers.


Market orders are complex and organic; political orders are relatively crude and artificial. Obamacare, to take the year’s most dramatic example, is an attempt to impose a simpleton order on a much more sophisticated order, like trying to make microchips with cookie cutters. Such attempts generally end badly, succeeding only in bringing chaos out of order. Friedrich Hayek described the process in The Road to Serfdom: The plan never pans out the way it was expected to, and the planners are obliged by political necessity to take ever more arbitrary and authoritarian steps in order to give the appearance of success to an enterprise that cannot in fact achieve its goals. Even in a democratic society — perhaps especially in such a society — the effects are corrosive, undermining the rule of law, liberal institutions, and the mutual trust that enables meaningful social cooperation. Therefore the question of incompetence vs. malice is not entirely a question of A or B…

The Obama administration has achieved a special distinction here: Investors are faced with considerable uncertainty vis-à-vis how it might interpret rules as compared with the Bush or Clinton administrations — and also about how it might interpret rules as compared with the Obama administration the day before yesterday. Now you see a mandate, now you don’t…

Perhaps 2014 will be the year in which we learn the value of predictability. Who can say?



Via RCP.