Despite the shockingly poor quality of Dave Ramsey‘s critique of the Affordable Care Act, there is currently a lot of bad to say about the law. I don’t want to give a distorted impression of my views of it, so lets look at the problems we’re seeing.
As I explained in the previous post, the law is supposed to function by offsetting the cost of community ratings (that is, forcing insurers to accept everyone regardless of health) with the addition of healthy customers through the mandate. And in pure theory it should work fine. In practice, it will depend heavily on how many healthy people actually sign up. For example, concerns that the tax penalty won’t be enough to encourage people to buy insurance are valid. The hard number the Obama administration has estimated is 2.7 million younger, healthier people.
There was always the possibility that they wouldn’t hit that number. But the disastrous launch of healthcare.gov has made that more likely. We’re nowhere near hopeless now, there’s still time to turn it around. But since the law depends on certain people signing up there’s a possibility that negative expectations can become a self-fulfilling prophecy.
As for the web site. There are two sides to this. On the one hand, this is arguably the most ambitious web site launch I’ve ever heard of. The fact that they tried to launch such a large and complex site fully featured is extremely unusual, and there’s not much precedent for a system like this getting the kind of traffic it opened up to. So problems were absolutely expected. On the other hand, it’s clear that the problems are much more extensive and serious than that accounts for. While the site I run at my day job is nothing like healthcare.gov, it has enough in common with it that hearing reports about the nature of the problems, like purchases being completed with inaccurate data getting to the insurer, make my skin crawl. The only silver lining on this front is that reports of how quickly the problems are clearing up are conflicted, and there is a possibility that it will be really working in the next month or so. If that happens, it’s very realistic to think that damage control could mostly recover anything lost so far.
The other problem is that even though the ACA is now off the ground, it’s still very hard to tell how it will actually effect people. There’s no question that Obama’s campaign promise that people would be able to keep their old plans was completely wrong, since the ACA changed minimum standards. And that means that for people who were trying to get by with the minimum coverage rates are going to go up. We’ll have to wait and see if subsidies cancel that, allowing people who couldn’t afford a rate increase to break even or better. That was the plan, but with the site not working yet a lot of people are in limbo waiting to see what they’ll actually pay. This is one of the areas I think Republicans could really have had a positive effect if they had chosen to be part of the process writing the law.
This isn’t to say I’ve changed my mind. I still expect the law to succeed. I still think it will be a net positive after the dust has settled. But it has flaws and I don’t want to minimize those, and I don’t want to dismiss the possibility that I’ve been wrong. There are a lot of real concerns here, and it’s not going to be a smooth ride.