by Steve Murphy | Posted September 06, 2013
Obamacare is upon us. Uninsured Americans will begin enrollment at health insurance exchanges this October. The floodgates will be open to 57 million uninsured American citizens and legal residents, who will finally have the opportunity to purchase affordable, high quality healthcare coverage. It comes with Obamacare discounts, in the form of subsidies and tax credits, that are quite generous and widely available, even for foreign students and guest workers. They can be obtained by families and individuals with incomes up to four times the federal poverty level; the average amount of the subsidy, just to get things started in 2014, is $5,290 a year.
At last there is manna for our forgotten poor, our reckless youth, our promiscuous women, and our income-challenged aliens. America will no longer deny them healthcare. Their benefits, too numerous to count, are listed in the 2,000-plus pages of the Obamacare law, which, according to ObamacareFacts.com, is chock full of "really impressive and long-overdue reforms." When Obamacare enrollment opens for business, many people, such as Nobel Prize winning economist and New York Times columnist Paul Krugman, expect "unexpected success." To such advocates, come October the biggest Obamacare worry will be crowd control.
But the 2,000 pages of bold promises has become a 20,000-page (and rapidly growing) monstrosity of officious bewilderment, provoking fear, disappointment, and confusion in the hearts of the uninsured, not to mention distrust, despair, and anxiety among taxpayers and business people. An astonishing two-thirds of the uninsured do not know whether they will purchase healthcare insurance by the January 1, 2014 deadline. Many fear that they will have to pay more than they can afford, even after getting their subsidy checks and tax credits. Some, including those who have enthusiastically waited for their chance to get Obamacare, worry that they may not qualify, and be shuttled instead into Medicaid.
Still others are troubled by the prospect of losing their jobs or having their hours reduced. A poll of 603 small businesses found that 19% have laid off workers specifically because of Obamacare; 41% have suspended hiring; 55% believe Obamacare will lead to higher healthcare costs. Businesses, from small to large, are circumventing Obamacare with part-time jobs; in labor-intensive industries, the new work week is 29.5 hours. Even altruistic organizations such as school districts and state and local governments are employing this strategy.
According to the Congressional Budget Office, the number of uninsured people will never fall below 30 million, even by 2023.
Then there is the troubling spate of recent news decrying the Obamacare implementation delays, missteps, unmet milestones, and special treatment (waivers, exemptions, and exceptions) of politically favored groups. Public support is eroding, with 63% of voters believing the Obamacare law must change. Similar dissatisfaction has been expressed regarding the clumsy rollout, with 57% referring to it as "a joke."
Mr. Obama believes that these attitudes have been shaped by his adversaries and by people who do not understand Obamacare — as if the layoffs, work week reductions, benefit cuts, and cost increases (insurance rates and the 18 new Obamacare taxes and penalties) were merely rumors spread by Fox News and angry Republicans. According to Obama, the number one priority of the entire Republican Party is to ensure "that 30 million people don't have healthcare." But according to the Congressional Budget Office, the number of uninsured people will never fall below 30 million, even by 2023 — after ten years and $2.6 trillion of Obamacare. Looks like Obama wins the uninsured contest.
Republicans certainly revel in Obamacare's inherent flaws and design errors (what Obama calls "glitches and bumps"), but after all, they played no role in writing it, and not a single one of them voted for it. Republicans have not caused what one of Obamacare's senior authors, Senate Finance Committee Chairman Max Baucus (D-MT), called a "huge train wreck coming down." The cause of the inevitable wreck is the tricks, gimmicks, and false promises that were stuffed into the bill to get it passed — that, and the Byzantine regulations written by Obamacare lawyers, lobbyists, and bureaucrats who now, in frantic futility, struggle to implement the law.
It is Obamacare itself, at least the grand version sold to the public, that troubles Obama. As he observes its slow, painful, horribly costly implementation, he seems to have come to understand that the public will not see the real version for years (if ever), let alone by October. Consequently, his objective is not to make Obamacare succeed but simply to keep it alive long enough for it to take root (i.e., for the Obamacare insured to become dependent on its handouts). To achieve this, the administration must (a) convince enough people to turn out to enroll in October and (b) ensure that the Obamacare Data Hub will be ready to process them.
Obama has decided that the objective can be effectively accomplished with a $700 million marketing campaign.After all, campaigning is what he does best. And the people he must reach are the same people who voted for him (twice). Bamboozling some of them should be easy, but conscripting the so-called young invincibles, not all of whom voted for him, or anyone, is critical. The premiums paid by the young and healthy are needed to defray the cost of insuring older, higher risk individuals and pay the subsidies for the 30 million heretofore denied health care.
Obama’s marketing blitz will promote the idea that health insurance is necessary, affordable, and "cool" to have. "Don't be left out," reads one pitch. Expect a barrage of ads containing various "guiltless" lures of handouts (similar to the SNAP marketing of food stamps, and hoping for similar success). Although we can expect ads ranging from the most condescending (e.g., wealthy celebrities extolling Obamacare for the poor) to the most shameless (e.g., 21 year-olds fraught with fears of sudden, crippling accidents or early heart disease and cancer), the underlying theme — aimed at the poor, the young, the uneducated, the disengaged — is that health insurance will make you feel good, like a winner. These are exciting times to be temporarily uninsured.
Many states have launched similar campaigns. For example, Minnesota recently announced that Paul Bunyan and Babe the Blue Ox will be the faces of its Obamacare exchange. The equally banal creative director of Minnesota's $9 million Obamacare web-based marketing campaign enthusiastically said that the Paul and Babe angle is "great news for those that are uninsured." He was looking for something "easy to work with" and "unique to Minnesota." Presumably, the coolness will be provided by the campaign's motto, "The Land of 10,000 Reasons to get Health Insurance." (Minnesota may be, as it calls itself, “the land of 10,000 lakes,” as if someone were counting, but Michigan and Wisconsin would challenge the uniqueness claim about the pseudo-mythology of Paul Bunyan.)
We will continue to "find out what's in it,” as Nancy Pelosi said — through more discoveries of unforeseen problems, unintended consequences, and the "bumps and glitches" of moral hazard.
When October arrives, many tens of thousands of “navigators” will be available to guide applicants through the steps in the Obamacare enrollment system. They will be paid $20–$48 per hour; a high school diploma is not required, nor is a criminal background check. The Department of Health and Human Services (HHS) tells us that Navigators must take a 20–30 hour online course (to learn about a 1,200 page law with over 20,000 pages of regulations) and that Americans "can trust that information they are providing is protected." That should quash any quality or privacy concerns.
Integral to the enrollment system looms the Obamacare Data Hub — a colossal database system storing unprecedented reams of applicants' personal information. To determine eligibility and subsidy size, navigators and other government officials will use the hub to evaluate applicant records at various government agencies. These include, for starters, the IRS, the Department of Justice, the Social Security Administration, the Department of Defense, the Veterans Administration, the Department of Homeland Security, the Peace Corps, the states' Medicaid systems, and, of course, the HHS.
The Obama administration is confident that it can persuade the young and healthy. But most who show up to enroll will likely do so under the duress of the Individual Mandate. The Obamacare Data Hub is another story. Although the administration insists that it will be open for business on October 1, it has been plagued by development problems. One difficulty, in particular, stemmed from the Employer Mandate (requiring that employers provide coverage to full-time workers). The complexity involved in verifying people’s income and employment status threatened the timely development of the Hub, which cannot tolerate delays. Thus, the Employer Mandate was delayed for one year. Administration officials gave large employers a one-year break, but they let the Individual Mandate stand, certainly annoying many from the critical target group (the young and healthy) whom they must somehow hornswoggle. Brilliant! And as if to demonstrate the essence of Obamacare, they wrote a new regulation for the delay in the Employer Mandate. Quietly released on a Friday (the Friday following the Fourth of July, no less), the regulation was 606 pages long. (Would a two-year delay be 1,212 pages?)
The massive public relations campaign will have some success. The same team and strategy (targeted messaging) that got Obama reelected should not be underestimated. Obamacare advocates will improve their messaging and they will never miss an opportunity to blame Republicans. They will convince many young invincibles to purchase insurance they don't want and many others to purchase insurance that they still cannot afford, even with their subsidies. So despite Obamacare's growing disfavor, campaign leaders remain optimistic, at least in public. But will the sizzle in their messaging entice enough enrollees to require October crowd control?
The vast majority of the uninsured may stay home. Along with most of the 157 million who already have health insurance, they may be and remain skeptical about the Obamacare PR campaign (a marketing blitz for a product so wonderful that it must be required by law), confused by the complexity of the program (mandates, rules, options, taxes, fees, penalties, waivers, exemptions, exceptions, etc.), and frightened before the vision of a $2.6 trillion house of cards in which we must now reside. Peering in from its rickety porch, we will continue to "find out what's in it,” as Nancy Pelosi said — through more discoveries of unforeseen problems, unintended consequences, and the "bumps and glitches" of moral hazard. What else could be found in a 20,000 page regulatory labyrinth of specious minutia, concocted by unscrupulous lawyers, venal lobbyists, and smug bureaucrats, all of whom possess at once the utmost lack of any practical medical or business experience and the utmost disdain for free-market capitalism?
As October approaches, anxiety over the turnout will shift to the Data Hub. But the Hub will not be ready, at least not to the extent Obama expected. He will worry that it will be unable to process enough applicants for the financial sustainability of his prize legislation. And worry he should. If the American public comprehends the capabilities of his Hub, not to mention what it could become, they will burn the entire operation to the ground, if only to keep the NSA from getting its hands on it.
Steve Murphy is a retired missile defense systems engineer and software developer living on top of Green Mountain in Huntsville AL, where he does a little consulting, plays the stock market and writes — mostly about economics, science, and American life. He can be contacted at email@example.com.
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