Monday, October 28, 2013

The Website Is Only a Component of Obamacare; Problems With the Website Don’t Mean that “Obamacare Is a Failure”

Ever since the federal government’s site went online on October 1, we’ve heard about problems that people are having accessing the site. The sorts of problems being described are inexcusable; there is no reason that the website couldn’t have been designed properly and tested thoroughly before going “live” on October 1. To paraphrase an old cliché: “If we can put a man on the moon…”.

However, there is one thing that is absolutely critical to note about the problems with The website is not Obamacare! Rather, is the tool designed to implement one component of Obamacare. But as with so many other things related to the Affordable Care Act, those who oppose it have continued their pattern of lying about the law in order to stoke public fear and anger. So, I found myself feeling the need to remind people what the Affordable Care Act (Obamacare) does, the point of the insurance exchanges, and why problems with the website are not evidence of a “failure of Obamacare”.

First, as opponents of the ACA like to remind us, the bill that was passed into law was a thousand plus pages. Ooh, scary. But the point is that the law includes many, many provisions other than the exchanges. Provisions which are designed to, you know, help people. For example:

  • The Affordable Care Act provides that insurance companies cannot deny coverage because of a pre-existing condition. Problems with have nothing to do with implementation of this prohibition.
  • The Affordable Care Act provides that young adults can stay on their parents’ insurance plan until they are 26. Problems with have nothing to do with implementation of this requirement.
  • The Affordable Care Act provides that insurance companies cannot cap insurance benefits with lifetime caps. Problems with have nothing to do with implementation of this prohibition.
  • The Affordable Care Act provides that insurance companies cannot terminate coverage when a beneficiary becomes ill. Problems with have nothing to with implementation of this prohibition.
  • The Affordable Care Act provides that insurance companies must include certain preventive treatment and screenings (such as mammograms) within insurance coverage and without payment of a co-pay or deductible. Problems with have nothing to do with implementation of these requirements.
  • The Affordable Care Act provides that insurance companies that spend too much of the income earned from premiums on costs other than payment of benefits must provide a refund to those that they insure. Problems with have nothing to do with implementation of these requirements.
  • The Affordable Care Act gives states the ability to expand Medicaid rolls dramatically, with the cost of that expansion being paid 100% by the federal government for several years (after which the federal government will pay 90% of that cost). Problems with have nothing to do with the decision of some states (like Indiana) to refuse to expand Medicaid.

Get the idea?

But there’s actually much, much more at work here, too.

One of the memes that we hear repeatedly from those who oppose Obamacare goes something like this: “If Obamacare [or the exchanges] are so good, why doesn’t ______ [insert “President Obama” or “Congress” or the name of any other public official] get insurance through Obamacare?” The problem is that this criticism completely ignores the very purpose of the exchanges. The insurance exchange (or the exchanges operated by the states; more on that in a minute…) aren’t intended to replace existing employer-provided healthcare; rather, the exchanges are designed to provide affordable access to health insurance to those who don’t have employer-provided care and who previously could not afford to purchase individual coverage. Due to economies of scale and increased bargaining power, employers (especially large employers) have been able to get coverage for employees at much less expensive rates than most individuals could obtain when shopping for just themselves or their families. Think of it as the difference between buying wholesale versus retail.

The purpose of the exchanges was to provide a “one stop shopping” site for those seeking to purchase insurance and, due to the nature of the exchange, to use market forces to drive down premiums. Where one individual couldn’t negotiate a lower price from an individual insurer, the hope is that hundreds of thousands (or millions) of shoppers choosing between plans that must provide certain benefit levels will be able to act as a giant group for which the insurance companies will lower premiums when in active and evident competition with one another. In other words, the exchanges exist, not to provide insurance to those receiving it from their employer, but to help the millions of uninsured Americans access affordable health insurance. And the US government, like most other large employers, provides health insurance for its employees. So there is no reason for President Obama or Congress to give up what they have an purchase insurance on an exchange; they are not the intended recipients of the benefits of the Affordable Care Act.

Don’t forget that a critical component of Obamacare is to provide subsidies to allow people to purchase health insurance. So when you hear discussion of what premiums may be for insurance coverage purchased through an exchange, be sure that the premium number that you are hearing includes the calculation of any available subsidy. If the subsidy isn’t included in the discussion, then you’re not really comparing proverbial apples.

There is something else that is critical to remember about the purpose and functioning of the exchanges. Recall that the Affordable Care Act gave states the right to set up their own exchanges. Some did. California, New York, and especially Kentucky (in addition to other states) set up their own exchanges and, by all accounts, are having a quite successful implementation of the exchanges in their states. But many states, like Indiana, chose not to create their own exchanges and, rather, elected to allow the federal government to be responsible for the exchanges for their states. Thus, Indiana could have set up an exchange; it could have been specifically tailored to the needs of Hoosiers. Perhaps it would have functioned as well as the exchange that Kentucky created. But the federal government had to create an exchange for all of the states that didn’t set up their own exchange. Hmm. I wonder which is more difficult: An exchange for a single state or an exchange for dozens of states, each with different insurers?

And let’s not forget that the Republicans made every effort to stop the implementation of Obamacare. Let’s say, just for the sake of argument, that the Supreme Court had ruled Obamacare unconstitutional in 2012. Can’t you hear the screams of outrage from Republicans if the Obama administration had spent significant sums of money creating the exchanges or website for a law that was declared unconstitutional. Similarly, if Mitt Romney had won in 2012 and followed through with his promise to repeal Obamacare, there would have been similar screams of outrage from Republicans about money spent toward the implementation of Obamacare. Keep this in mind when you hear Republicans talking about the administration having three years to create the exchanges. Not really.

I also want to touch briefly on some of the really bad analogies that have been drawn with regard to the rollout of and the suggestion that it is a sign of the failure of Obamacare. I’ve seen the rollout compared to the Iraq war and to the Bush administration’s response to Hurricane Katrina. Heck, in response to one of my posts on Twitter, someone made the comparison to a nuclear attack on the United States: “The current #Obamacare situation is more like someone programmed our launch codes wrong & enemy missiles will B here in 5”. Seriously. Let me offer the following response: The failure of a website, designed to allow people to purchase health insurance is not akin to a war or to a failed government response to a natural disaster that led to the deaths of thousands. And it certainly is not analogous to a nuclear missile strike. But those are the analogies that opponents of Obamacare have to stoop to in order to continue their efforts to mislead and frighten.

Think of it this way: We didn’t abandon space exploration when three astronauts died in a fire on Apollo 1; we didn’t surrender to the Confederacy after losing the first few battles of the Civil War; and most importantly, we didn’t abandon President Bush’s Medicare Part D program when its initial rollout was plagued with problems. But those programs weren’t the signature legislative achievement of President Obama. A Democrat. A black Democrat.

I think that the problems with are terrible and I don’t know how the system could have been designed and implemented so poorly. But is not Obamcare. It is merely a component of Obamacare; it is a component of Obamacare that will be fixed (maybe soon, maybe not, but it will be fixed). In the meantime, all of the other components of Obamacare are functioning and are helping people. And even the exchanges are working in states that adopted their own (and at the federal level for those who choose to register via phone or paper, apparently). One problem in one part of the law does not evidence that the entire law is a failure.

But don’t let truth stand in the way of a good scare tactic; after all, Halloween is just a few days away.

If you hear someone tell you that “Obamacare is a failure”, tell them why they’re wrong. And tell them why. See how they respond.

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