Mandate: to delay or not to delay
Here’s a comment I found at the WaPo that I thought worth highlighting [typos corrected]:
One of the strangest things about the President is his inability to back down even when he’s dead wrong. No one is getting fired and his lackeys continue to pretend all is well. It makes sense to simply put off the start of the individual mandate for a year, even six months, but allow people to enroll voluntarily for that time. But he’s so fixated on appearing infallible that he’s making the rollout of Obamacare into the train wreck some of his allies predicted. And since he fought the Republicans on this very point, he had to dig his heels in and take a massive political drubbing while the bad news continues to pile in, even being reported by his fawning press.
I’m not sure which of Obama’s allies predicted the rollout would be a train wreck; perhaps the commenter means “foes.” But still, the point is well-taken. Obama has backed himself into an odd position in which he can’t do what might be sensible and in his own interests in having Obamacare work: delay the mandate.
It is an especially ironic state of affairs, since delaying the mandate was one of the main issues in the shutdown, something the Republicans were asking for and Obama refusing. He would look ridiculous if he were to change his mind on it now, although the press would probably help defend him. But although the “fawning” press is still helping him, even they (as the commenter points out) have been forced by the awesome scope and visibility of the rollout debacle to report on it with a certain amount of candor.
By keeping more or less to the original rollout schedule, with a few minor tweaks, Obama risks compromising the exchange’s enrollment ratio of healthy to unhealthy people that is necessary for the success of Obamacare. Thus he may be precipitating the very disaster he is trying to avoid.
Hubris, nemesis.
The problem with delaying the mandate by a year is that it could well produce precisely the adverse selection debacle that hit New York when they enacted a lot of the same regulations that are in Obamacare (in some ways, more strict than what’s in the Federal law, particularly with respect to community rating), but without an individual mandate (and without subsidies and so forth). The end result has been New Yorkers get to pay far more than people in other states for health insurance, precisely the outcome that would spell doom for the ACA politically.
I’m sure that if the website is still not working by the end of the year they will delay the mandate, probably by just a few months. There’s really not much need to do it now, while we wait to find out if the website can be fixed in time. They’ve already extended the deadline to the end of March (whereas before there was some confusion about whether the deadline was February 15 or not).
The train wreck comment was from Senator Max Baucus back in April.
Rohan:
Yes, I thought of that, but that seemed an isolated and outlier comment rather than “allies,” plural. Were there other Democrats who agreed at the time?
I wonder where the bodies are hidden? And which bodies?
The president’s reaction just isn’t meeting the smell test here.
Because you’re correct in observing that it is manifestly – and obviously – in the administration’s best political interest to extend the mandate period.
And he’d have cover from even the Tea Party members of Congress …and the media would give him, as always, favorable spin (goes without saying lol), as indeed they’re desperate to.
But he’s not.
Sumpin’ ain’t be right heay-ar Muffie.
I’m tellin’you, there is something we’re not seeing.
…something that would make his reluctance to buy the necessary time politically understandable.
He’s apparently blithely tossing aside the only route to political “salvation” of what-he-considers his administration’s premiere accomplishment.
It don’t really add up, eh?
When the shutdown negotiations got to the point where the Republicans were asking for a one year delay for the individual mandate (as Obama himself unilaterally gave to businesses!) I had this Twilight Zone feeling.
The suppressed Machiavellian in me was thinking real life is stranger than fiction. I couldn’t understand why the Republicans would make such a face saving offer to Obama. Why not let the day come and the debacle unfold? There are a lot of liberals who in theory like ObamaCare, but are going to be very unhappy when their insurance costs increase radically due to the imposition of much higher (and unnecessary) insurance requirements across the country.
But then Obama declines!
If I were in Obama’s shoes, I would want the debacle to happen after Nov 2014. Maybe it could be avoided entirely, and the computer interface systems fixed. Maybe he has people assuring him the problems are small and will be fixed within days or weeks.
I have lived in CA for a while now and it doesn’t surprise me that people can believe such things. What is surprising is that one of these delusional people got all the way to the presidency. I much prefer someone more cynical – who didn’t believe and knew what they were saying was nonsense and just for the crowd. Such a cynic would slow the Titanic down and avoid the icebergs vs going full speed ahead. Obama is like a captain on a new Titanic who sincerely believes that it’s unsinkable, that icebergs are not a threat, and orders full speed ahead. A better captain would assure the passengers that yes the ship is unsinkable, and then order the speed reduced and forward lookouts doubled.
Not Obama. Debt, higher taxes, higher entitlements – not a problem. Objections are just politics.
Obama declines for the same reason I already cited: not having the mandate in place for individuals would create an adverse selection debacle, for obvious reasons. I don’t really know why this is so difficult for people to understand, it’s not that complicated.
Delaying the mandate on businesses doesn’t have that problem.
Mitsu:
Who doesn’t understand that? It’s the premise of this post, and most people on the right are well aware of it.
Yes, I know YOU understand it, Neo, I was referring to the last poster’s remarks, which seem to assume Obama gave up an “opportunity” to delay the mandate.
Mitsue, perhaps I’m not understanding your line of reasoning.
But it seems to me that if the new system is implemented sooner – let’s assume it’s actually working – then the rest of the country outside of NY and CA will notice the higher costs being forced upon them due to the higher standards. I doubt that will get them votes.
If it were postponed then those costs and their political repercussions could be delayed or dealt with after the 2014 elections.
Otiose, what the Republicans were proposing wasn’t delaying the entire law, it was just delaying the mandate. Delaying the whole law at this point would be virtually impossible as the regulations have already been in place, insurance companies have already modified their new policies to conform, and so on. So delaying JUST the mandate would be potentially disastrous, because it would make it much more likely that mostly the sick would be signing up for insurance which would cause the dreaded adverse selection debacle that happened in New York, years ago.
And, of course, Obama doesn’t believe that the law, if actually implemented as designed, will result in the disaster that you assume will occur. Yes, there will be some losers and some winners, but he is hoping that the law will, on balance, work. And a crucial element of that is the individual mandate, or tax incentive, which is what it really ended up as (as Roberts pointed out, there were no consequences whatsoever to not getting insurance except for the tax penalty — no criminal penalties, nothing. So it’s not really a “mandate” but rather a tax incentive.) Getting rid of the tax incentive would potentially make premiums much higher in the next round, and Obama doesn’t want that for obvious reasons.
Mitsu,
I agree with you. I suspect Obama believes that the law if implemented as designed will work just fine and as advertised. He probably believes that it will reduce costs and nobody has to lose their current insurance etc. and to the extent it doesn’t it will be because of mistakes – intentional or otherwise – of others.
I also agree with your outline of the disastrous alternatives to delaying or not e.g. the sick signing up as far as the health law itself.
What the Republicans were proposing depends on which Republicans and at what point in time because their public proposals evolved over time.
The law and its mandate delayed or not will have bad effects. The choice facing Obama is which choice has the more manageable political fallout. Given that he’s already delayed the business mandate (and he did that without Congressional approval) and therefore he’s decided he can manage that choice behind the scenes, it would seem likely to me he could delay the individual mandate and attempt to deal with the repercussions (differential numbers of sick vs healthy signing up) behind the scenes and without the Congress publicly getting involved more easily than he could than to keep it in place. With the mandate in place there’s already a growing movement among Democrats to join with Republicans to pass something to delay things but it’s likely other fixes will be added and by ‘fix’ it will likely mean undo one or another parts of the law. For example the medical device tax is going or perhaps it’s gone.
IMO Obama politically has no choice but to get in front of this and delay it and then deal with matters as best he can.
If he fails to get in front he will be encouraging an alliance of Democrats and Republicans against him to fix his law. And, worse if he refuses to take the lead and delay I think it will be much worse come Nov 2014 as Republicans plaster slogans in their advertising everywhere highlighting the pain caused by the new law, AND Democrats (those in danger on the margins) to actually disown the thing (vs talking about fixing it later when it takes effect.
Well, even if I’m going to moderation, I’m going to followup up my previous not-yet-posted comment with this from the DC Trawler:
Michelle Obama’s Princeton classmate is executive at company that built Obamacare website
…as a possible clue to the “what we’re missing” conundrum I earlier postulated.
Maybe the dots are being collected, even if they’re not yet being connected?
Maybe its really as simple as “follow the money”?
…part of the “Chicago Way” after all, is heavy duty graft and corruption.
…makes sense, eh?
If he fails to get in front he will be encouraging an alliance of Democrats and Republicans against him to fix his law.
But isn’t that his MO — leading from behind?
And if that alliance of Democrats and Republicans can make those fixes starting now and continuing through 2014, it might actually help the Democrats next November.
Obama’s ego is what’s keeping him from delaying the individual mandate. But don’t worry: if he finally decides to delay it, the MSM will cheer and say it was the right thing to do because “we’ve always been at war with Eastasia.”
Oh, and whether it’s delayed or not young people won’t be signing up for it. They are not altruistic enough to take a personal hit for Obama’s sake, let alone motivated enough to jump through all the new hoops the ACA requires.
The term “adverse selection” is a euphemism being used to cover up a profound misunderstanding of human nature.
Obama Care can not be mended. The system is designed to bleed money from young healthy people, at jacked up prices, to subsidize the old and the sick. IF you kill the mandate, you kill the Obama Care cash cow.
Don’t mend it, end it.
IMO Cruz and the House majority made a big mistake. The House should have sent the Senate a bill that threw out all exemptions and exceptions to Obamacare. If Obamacare is so wonderful and BHO is so intelligent the supporters should be forced to decide between following what is the law of the land to the letter or admitting its a humongous Rube Goldberg contraption with tens and tens of thousands of regulations and the more Nancy sees what is in it the more the voters will be upset to learn all things promised were half-truths or outright lies.
People get upset when they can’t keep the doctor they like, their premiums go up, and their options in general decline. The only ones who will benefit under the shadow of this behemoth are those who currently can not afford basic coverage and those with existing preconditions. It would have been far simpler and cheaper to just give them vouchers for basic coverage. Of course that would not allow DC to micromanage and tax.
Otiose, there are lots of ways the law could be improved, I’m quite sure we will find out what those are as it rolls out. Delaying the individual mandate for a whole year will definitely not help, in my view, unless it becomes necessary because the Federal exchange never ends up working. We’ll see how that plays out and if it is still broken in two months of course they’ll end up delaying the mandate by at least a little while.
But delaying the employer mandate, as I mentioned before, doesn’t have any systemic impacts that could imperil the whole law. Delaying the individual mandate could, however. That’s the simple reason he did one and not the other, as I said before.
As for political fallout — well, we shall see, won’t we? What Obama hopes and what I think most Democrats, including myself, hope, is that the law will end up working well enough that it will become clear: 1) it’s not the end of civilization, and 2) it’s, on balance, better than things were before. At that point we can finally move on to improving it rather than scrapping it and going back to the awful situation we had before, where millions of Americans had no access to health care, self-employed people with preexisting conditions couldn’t get insurance, tens of thousands more people died every year for lack of access to health care (according to one study), and health care costs continued to spiral out of control (we are spending roughly twice what the typical industrialized nation spends, despite the fact that we have so many uninsured.)
Mitsu,
While the law is not the end of civilization I cannot agree that it is better than what we had before. It imposes a top down system that will inevitably result in some combination of accelerating cost increases or major cutbacks in the quality of health care for a majority of people. What Obama and his supporters did was take the worst elements of the existing system from CA and NY etc and impose it on the rest of the country, instead of focusing on creating bottom up market incentives to bring costs down and finding ways to bring cost effect basic plans to those without.
The essential reason we spend so much in aggregate on health care is that the people who are so enamored of top down government refuse to allow market based solutions to be implemented. Another reason is that those same types insist on using something like health care insurance to distribute services that have nothing to do with insurance in the name usually of social justice or whatever.
I heard O’care dissed heartily on NPR’s Wait, Wait, Don’t Tell Me this afternoon.
I take that as a good sign of understanding getting around.
“It is an especially ironic state of affairs,”
Should read:
“It is an especially iconic state of affairs,”
For this is Wan ‘management’ in its purest form.
———
Mitsu:
The Federal government has long had a track record of spending large on IT projects only to fold its hands: total failure.
The F-22 Raptor took so long to develop because of its software driven controls. THAT’S where all of the money went. The engines and airframes are not miles and miles more complicated than an F-15, just the digital systems. The cost overruns ran to Y E A R S and many, many, billions. Because of the march of digital progress, the F-22 ended up with software far beyond the original conception. The development ran that long.
The F-35 is going through the same s t r e a t c h. Originally, the experts thought that they could port the Ada logic of the F-22 with just a few tweaks. But the software gods won’t let that be.
These two planes are really flying software projects. Neither is as complicated as 0bamacare’s website. It’s data cross-feed structure is in unbounded territory. The President and Congress has taken IT outside the known cyber-universe, entirely.
Those that have looked under the hood have leaked that all of the code to date should be junked and the site built from scratch. That’s not an uncommon situation with IT failure. Cleaning up a horrific structure takes more time and money than starting with a clean sheet.
There is not a chance in this world that the Administration can fix the coding before the election. Even the Secretary in charge admits that she needs two additional years, and she’s an optimist.
In the meantime, millions are being thrown off their insurance plans while no one can get through the website/ nexus — a nexus that is the essential element of its digital marketplace.
0bamacare CAN’T function with pencil and paper.
The only ‘success’ stories turn on the ‘default to Medicare’ crowd. They’re not passing ahead to the insurance marketplace — which is dead — but defaulting to Medicare. That’s a decision point discovered early in the coding. It does not involve data swapping with the insurers at all. For all others, the entire matter is a hairball.
“create an adverse selection debacle”
We passed that mile post decades ago. Wake up and smell the bitter stench of ashes wafting from the ‘center-left’.
Health insurance is based on having lots of healthy young people enroll so that their premiums pay for us old and sick people. Obamacare, by allowing people under 26 to stay on their parents’ policies, by allowing the young to enroll in Medicaid for free, and by banning even waiting periods for pre-existing conditions, makes adverse selection inevitable.
Other parts of the program such as reducing reimbursement for Medicare and Medicaid, reducing the subsidy for Graduate Medical Education, requiring ever-increasing government involvement in medical decisions (“death panels” for the euphemism-challenged) has caused thousands of physicians to refuse Medicaid and Medicare patients, to retire early, and to reduce the number of medical school applicants.
It is quite obvious, except to the deluded, that the goal is not merely to cover the uninsured (which would have required a one-sentence act –“Go down to your local Social Security office and sign up for Medicaid”) , but to reduce US medical care to the mediocre levels of Canada, the UK, or the EU. For example, the UK, where you simply cannot get a hip replacement if you are over 73, or dialysis if you are over 55, where strep throat tests take nine days to come back, or Canada, where you can wait six months just to go on the list of a primary-care physician, where a provincial premier flies to the US for medical care (can anyone imagine a US state governor going to Canada for medical care?).
We spend twice as much as other countries do on healthcare because our healthcare is at least twice as good, probably more than twice. If you go skiing in Vail and smash into a tree, the resort’s on-call or on-staff doctor examines you, sends you to one of the five MRI facilities in town, where they discover you have a brain injury and airlift you to a major teaching hospital in Denver and save your life. Whereas, if you go skiing in Mont Tremblant and run into a tree, there are no on-staff doctors, there are no MRIs, and there is no helicopter ambulance, so, you die.
If the goal were simply to provide health care to the poor, why not simply give subsidies to the hospitals which are already taking care of them — nobody in this country goes without healthcare unless they don’t want it, Mitsu; they just have to wait for a long time in hospital emergency rooms to get it. That’s not a particularly high price to pay, to get the best medical care in the world, is it?
Why the medical device tax, otherwise? Why the tax on having too good a health insurance policy, otherwise?
Of course, the coastal strip elites won’t have to put up with second-rate medical care, they’ll just have themselves exempted, like Congress. It’s only those knuckle-dragging, gun-loving, God-clinging peasants out there in flyover country, right, Mitsu? And who cares about them anyway? After all, they’re not OUR people!
I guess that’s why I’m one of those stupid right-wing nuts that you find so objectionable, because I do care.
Parker: I completely agree with you. The law, any law, should be implemented exactly as Congress passed it. Congress, especially the House, represents the people. The great shining idea was that here, the people make their own laws. What Obama has been doing is re-writing laws by Executive fiat. In plain language, that is what dictators always do.
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Cap’n, I agree with you and Parker–remove all exemptions (and means-test all subsidies). But in a limited way, that’s what the House did in their last proposal. They funded everything but required Congress and the White House to be covered under 0bamacare. And the Dems flatly refused.
The Dems know that slaughter houses are only for livestock and slaves. Not for humans like the Demoncrats.
Also from Parker’s comment, regarding Pelosi: we have to pass it to see what’s in it isn’t a law–it’s a stool sample (stolen from somewhere).
Regarding wait times, France has very short wait times, yet it is single payer. Long wait times are not a necessary consequence of government intervention in the health care system. And Obamacare is nothing like the system in Canada — it’s, as I’ve said before, much closer to the system in Massachusetts.
The adverse selection problem has already occurred in New York, so we have an upper bound for the worst it is likely to get. We’ll see how bad it is once Obamacare has fully rolled out. There may be a need to modify the law.
There’s always a short line at the euthanasia station. Join with Mitsu and I’m sure he’ll lead you down the right path.
The French don’t have a “pure” single-payer system —- approximately 92% of them have supplemental private insurance.
Wonder if that supplemental insurance is what’s responsible for their low wait times, that is, those who have it don’t have to wait as long as those who don’t.
The Progressives don’t really want this program, they consider it a step to the ultimate goal of single payer.
They want it to fail.
IMO there’s a pretty big difference between delaying the mandate a year because the website is buggy versus what the Republicans wanted to do in the shutdown. Suppose a town votes to reduce the speed limit on a road from 45 mph to 35 mph. But the sign printer botches the new signs. So the town can:
1. Take down the old signs, but not put up new ones so people zipping b at 45 mph get tickets.
2. Delay the new limit until the correct signs are printed.
Now compare this to someone who just wants to speed on the road advocating waiting a year because he hopes he can win enough seats in the next election to overturn the hated 35 mph speed limit. (Let’s also note a botched road sign hardly tells us anything about the wisdom of this hypothetical speed limit change on the road)
Now personally I don’t see any reason to delay the mandate because a web site is buggy for a few weeks. First of all, many state run exchanges appear to be running fine, the website has gotten better and problems are likely to be more or less acceptable by mid-November. The phone number and personal brokers have been working fine. You have until April of next year to sign up with the exchanges to avoid the rather minor mandate penalty so this isn’t a situation that screams to me the mandate must be delayed.
Keep in mind the penalty is $95 or 1% of income, whichever is greater. To keep that in perspective, the payroll tax cut that Obama put into place and Republicans let expire despite Democrats pleading for them to extend amounted to over 3% of income for most people.
Mitsu
The problem with delaying the mandate by a year is that it could well produce precisely the adverse selection debacle
I’ve been thinking about this and it seems to me this will take a few years to appear. Consider, no one really knows what type of people are going to sign up for insurance from the exchanges. Insurance companies had to take a guess and offer policies for a premium that was high enough for them to make a profit but also low enough so they wouldn’t give all their business to their competitors. Insurance companies aren’t going to know if they set prices too high or too low until they look at things for a year plus and see what type of costs their customers have. If the mandate does get delayed for a few months, I suspect it’s not going to make any real difference at the beginning since we are in a kind of ‘pre-season’ where everyone’s finding their game (if you’re the type tha tfollows football).
>any real difference at the beginning
Yes, but it would make a real difference a year from now. And that’s not good policy. Delaying the mandate by a year would have to be a last resort.
We already have evidence that regulations such as those in Obamacare + no mandate or tax incentive = skyrocketing premiums (New York). I actually am still worried about this with only a paltry $95 penalty. We shall see.
Actually it will take a full year. At the end of year 1, insurance companies will indeed look at what they charged and what types of people signed up. But unless every single person who isn’t covered by EBI or Medicare/caid/VA signs up they would almost certainly not assume year 2 patients would look exactly like year 1….I think they would need at least 2 full years before it becomes blatant that they massively under or overpriced premiums.