Republicans Caving As ObamaCare Implodes

Boehner’s days are numbered:

Robert Costa

Per Sen sources, Boehner has agreed to take up the Senate’s plan and allow it to pass with Dem votes.

6:49 AM – 16 Oct 2013

Basically he is giving the Democrats the vote they wanted and capitulated. These Republicans have no spine…cowards one and all. As DrJohn laid out yesterday, if the debt limit is not raised the whole country WILL NOT burn. There will be no default. It’s all a scare tactic that the MSM and the Democrats are using and the RINO’s are willing to just bend over and take it.

Shame.

Meanwhile ObamaCare visitors are plunging:

The number of visitors to the federal government’s HealthCare.gov Web site plummeted 88 percent between Oct. 1 and Oct. 13, according to a new analysis of America’s online use, while less than half of 1 percent of the site’s visitors successfully enrolled for health insurance the first week.

…Based on a sample of two million users — or 1 percent of all online users in the U.S. — which Millward Brown Digital has permission to track, it suggests that the rush of traffic administration officials cited as the cause of the site’s problems trailed off within a matter of days.

Of the 9.4 million unique visitors to the site during the launch’s first week, according to the analysis, roughly a third attempted to register, and a third of that number — 1.01 million — completed registration. Ultimately, roughly 36,000 Americans signed up for an insurance plan online, the report said.

This comes as the inevitable sticker shock has arrived:

The Tribune‘s Peter Frost found that a typical user in the system — a 33-year-old single father in this case — would see his premiums “more than double” from the current average of $233 a month. But if the single dad wants his premiums to remain in range, he’ll need to sign up for an annual deductible of $12,700. The average deductible before ObamaCare for this consumer would have been $3,500.

Nor is that an isolated example, although it’s on the far end of the spectrum. In order to keep prices low, 21 of the 22 approved plans on the Illinois state exchange have deductibles of more than $4,000 for individuals, and $8,000 for families. Frost notes that the average employer-based coverage puts the individual deductible at $1,100.

Consider what this means to the consumer. First, the government forces Americans to buy comprehensive insurance when many don’t need it. At $466 a month, the single father in the example above will spend about $5,600 a year on comprehensive insurance, which would far outstrip the medical expenses for most 33-year-old single men, who might expect only a wellness check and perhaps a couple of acute visits to a clinic for urgent care a year. At retail costs, even with labs, that’s going to run less than a thousand dollars a year at most.

Now, though, his insurance won’t even cover that much. Before Illinois consumers see any benefit at all from their insurance policies, they will have to spend more than $4,000 each year out of their own pocket — and without the benefit of health-savings accounts (HSAs) to use untaxed income for that purpose. That means that some consumers will spend much more each year over and above their newly inflated premiums, making it less and less likely that they will ever see any benefits from their mandated insurance policies other than avoiding the small fine from the IRS for noncompliance.

This will only get worse. Megan McArdle’s article describing why this rollout was a disaster and why the law is unworkable is a must read in its entirety. There is a lot in it including questioning why the HHS decided to be the lead contractor on building the entire system itself:

I’m a longtime critic of federal contracting rules, which prevent some corruption at ruinous expense in money, quality and speed. But federal contracting rules are not what made the administration delay writing the rules and specifications necessary to build the system until 2013. Nor to delay the deadline for states to declare whether they’d be building an exchange, in the desperate hope that a few more governors might decide — in February 2013! — to build a state system after all. Any state that decided to start such a project at that late date would have had little hope of building anything that worked, but presumably angry voters would be calling the governor instead of HHS.

Federal contracting codes, so far as I am aware, do not emit intoxicating gases that might have caused senior HHS officials to decide that it was a good idea to take on the role of lead contractor — a decision equivalent to someone who has never even hung a picture deciding that they should become their own general contractor and build a house. Nor can those rules explain their lunatic response when they were told that the system was not working — “failure was not an option.”

Nor can you really blame the Republicans — an argument that makes sense only if you don’t examine it very closely. It starts by assuming (but never stating) that the administration passed a law that didn’t work as written, and then posits a civic duty for the opposition not to oppose laws that they oppose, but instead to help the majority party turn an unworkable law into something more to said party’s liking. This is absurd. Moreover, it’s not even a very good explanation for most of these problems. Maybe CMS turned lead contractor because they couldn’t get more funds to hire private help, but lack of funds does not explain why HHS took so long to write regulations and specifications, keeping insurers at loose ends until as late as this summer, and preventing their biggest contractor from writing code until spring. It does not explain why officials decided to launch a system that was so badly behind schedule, or to keep insisting, against all evidence, that it wasn’t broken. What explains this long train of poor decision-making is some combination of bureaucratic inertia, a desire to hide what they were doing from voters who might not like it and a terrifying insouciance about how easy it might be to build a system of this size and complexity.

My best guess is that by the time HHS officials realized that they hadn’t left enough time, the only possibilities were: 1. Ask Republicans for a delay; or 2. Launch a not-very-well-built-or-tested system upon an unsuspecting public. No. 1 would have been unpleasant for several reasons. Obviously, it would have been a huge political black eye. Republicans would probably have responded by joyously agreeing to a delay — of a year or more, which would either mean launching right before the 2014 elections or possibly never launching at all. Administration officials weren’t going to put the president’s signature achievement at risk that way.

After all, if they launched a nonfunctioning system, at least the state exchanges would hopefully work, and if enough people in the states signed up, it would be too late for Republicans to demand a rollback. They’d get the system working in a few weeks, and then everything would be fine. I’m guessing that even at the end, the senior officials didn’t realize just how bad this was.

And as many of us predicted, ObamaCare may implode all on its own:

If the exchanges don’t get fixed soon, they could destroy Obamacare — and possibly, the rest of the private insurance market. The reason that the exchanges were so important was that they were needed to attract young, healthy people into the insurance system. The worry was that if insurance is hard to buy — if you have to do your own comparison shopping and then call the insurance company, and fax in some paperwork and two years of tax returns — that the young and the healthy simply won’t do it. Sick people and old people who were getting huge subsidies — and maybe the ability to buy insurance on the private market for the first time in a long while — would overcome any obstacles, because if you’re spending $15,000 a year on health care, it’s worth a lot of your time to make sure that you have insurance. But if your biggest annual health-care expense is contact lens solution, you may just decide to skip it and pay the fine.

The administration estimates that it needs 2.7 million young healthy people on the exchange, out of the 7 million total expected to apply in the first year. If the pool is too skewed — if it’s mostly old and sick people on the exchanges — then insurers will lose money, and next year, they’ll sharply increase premiums. The healthiest people will drop out, because insurance is no longer such a good deal for them. Rinse and repeat and you have effectively destroyed the market for individual insurance policies. It’s called the “death spiral,” and the exchanges, like the mandate, were designed to keep it from happening.

Without the exchanges, the death spiral seems almost assured. The amount of work required to find a policy, figure out your subsidy, buy coverage and file the paperwork will be very high. And it’s unlikely that folks who can’t even be bothered to go to ehealthinsurance.com right now will do it. The Affordable Care Act made the task of signing up young healthy people on the exchanges even harder with its much-loved requirement that companies allow kids to stay on their parents’ policies until they’re 26, which took millions of potential buyers out of the pool. The ones who are left are going to be disproportionately poorer and less well educated than the middle-class offspring who can get cheap insurance through mom and dad. There’s a reason that virtually every person you’ve seen written up in an article as they tried to get insurance at a community center or clinic is some combination of over 55, retired or afflicted with a serious chronic condition.

Once the death spiral happens, it’s very difficult to recover from. That’s why if the exchanges don’t work soon, we need to hit the reset button and try again next year. This will be very, very difficult: Insurers are already selling policies under the new regulations, and those regulations have driven up costs for existing buyers. People who have been counting on being able to buy insurance through the exchanges will have to spend another year without. And of course, it will be politically embarrassing. But it will be even more politically embarrassing to get to December and find out that we have commanded millions of Americans to buy insurance on a system that doesn’t work. And it is not a good bargain to cover some people now, but in doing so, to make insurance unaffordable for millions more in a few years. If we can’t launch the system correctly, then we need to wait until we can.

Which is all the more reason the Republicans should of fought harder to defund this horrible horrible law. At least fight to delay it. But no, when the Democrats didn’t blink our leadership folded like spineless jellyfish.

Curt

See author page