Columns » Ernest Dumas

Obamacare will help people, not politicians



It was predictable that the rollout of the new insurance markets under Obamacare would be troubled, maybe even nightmarish. In fact, that was exactly what was predicted when Republicans first proposed mandatory market-oriented insurance — 40 years ago in the case of employer-sponsored insurance and 25 years ago in the case of an individual mandate.

But who would have predicted that President Obama, the putative father of the giant reform law, would contribute so directly to the troubles? Republicans, not the president, were supposed to throw the monkey wrenches. (They tried.)

The troubles, if you have been on a ship in the Indian Ocean, were the baffling glitches in the Internet portal where people were to go between Oct. 1 and April 1 to sign up for a good insurance plan but which crashed within minutes of opening when more than 4 million people tried to get on the site, and then the cancellation of tens of thousands of individual plans by insurance companies before new protections for policyholders take effect.

Obama contributed to the troubles by first giving a one-year bye to the relative handful of large employers affected by the law's requirement that they offer health insurance to their workers or pay a tax and then by seeking to also give some leeway perhaps for a year — if insurance companies and state regulators will go along — to individuals whose policies are being canceled at the first of the year.

The president was driven to the second cave-in when the policy cancellations made him out to be naïve, deceptive or a liar — your pick, according to your degree of dislike of him — because he had promised that people could keep their health insurance if they liked it. He should have added, "unless the insurance companies want to cancel your policy rather than give you the protections required by Obamacare."

"Coverage that can't be taken away" was the big promise of Obamacare, but most of the existing individual plans allowed companies to take coverage away or not to provide it at all, which is why they were relatively cheap. The companies canceled them, expecting people to enroll in plans they were offering in the new exchanges.

Obama could have tried to justify his promises by claiming that he had not imagined that people liked insurance that provided little coverage, but at least he was man enough not to make the claim. An apology was required and given. Going further, as President Clinton publicly goaded him to do, would undermine the basic principles of the law and add to the chaos. But that is what he did.

Nevertheless, the Patient Protection and Affordable Care Act will struggle along and achieve its biggest goal, near universal coverage with wide protections for nearly all patients, by the beginning of 2017, when the drafters expected it to reach full compliance and when the penalty will be strong enough to drive young people into insurance. But the president and Congress that wrote it will be robbed of the political victory of a successful rollout.

But back to those predictions. They go to the heart of the century-long battle for universal insurance. When Republicans rolled out ambitious plans to insure nearly everyone by mandating that people purchase private plans with government subsidies provided through tax credits, Democrats favoring a government plan denounced them as being virtually impossible to administer on a national scale and as posing a risk of sharing confidential tax information with the insurance and medical industries. They would prove to have a point.

The father of the insurance mandate was President Richard Nixon, who laid out a plan to Congress in 1974 that required every employer in America to insure its full-time workers with managed-care plans and pay 70 percent of the premiums, with taxpayer help for small businesses. Sen. Edward M. Kennedy, still championing a single-payer system, stymied it, which he would describe 40 years later as a terrible mistake.

Then, the Heritage Foundation, the conservative think tank favored by President Reagan, came up with an elaborate plan in 1988 that would require not employers but individuals to be responsible for insuring themselves and to penalize those who didn't. Obamacare would take elements of both the employer and individual mandates.

In the big clash of 1993-94, Bill and Hillary Clinton banked on the employer mandate and Republicans and a few Democrats rallied under the individual mandate. Half the Republican caucus in the Senate sponsored a bill that would have subsidized premiums for people earning up to 230 percent of the poverty line. (It is 400 percent in Obamacare.)

The insurance and medical industries and even the U.S. Chamber of Commerce supported the employer mandate when the battle started but fled behind the lines when stopping the Clintons became the target and the battle got nasty. When the whole effort collapsed, polls showed that 70 percent of people favored the Clinton plan when it was described to them but only 35 percent were positive when the Clintons were identified with the plan. That also would be true of Obamacare.

But the division should be traced to 1986, when Congress and President Reagan crafted the Emergency Medical Treatment and Active Labor Act, which said hospitals had to treat everyone, even immigrants, who came in the door, establishing a sort of universal insurance. It created the free-rider problem. People crowd into emergency rooms, knowing it will be free if they like, and hospitals shift the cost of the uncompensated care to paying patients through private insurance plans, Medicare and Medicaid.

After cementing coverage protection for everyone, ending free riders and cost shifting was the big selling point of Obamacare. The president has to be careful about how far he goes in undermining his own goals.

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