Obamacare gets close to liftoff
Like it or not, here comes Obamacare.
In two weeks — Oct. 1 — the rubber will start to meet the road in the laborious and sometimes frustrating effort to implement President Barack Obama's signature national health care legislation.
That's the first day when individuals who are uninsured will have the opportunity to sign up for health coverage and apply for subsidies to pay for it under the Affordable Care Act, aka Obamacare.
Exchange coverage will become effective Jan. 1, 2014, and supporters of the legislation expect that the proposed extension will cover millions of new people.
What the legislation's supporters expect and what they will ultimately experience, however, will go a long way to determining the effectiveness of Obama's proudest legislative achievement.
Here's the rub: to be successful, the legislation needs to attract many thousands of healthy young people who will be charged higher rates than their risks would normally indicate to generate the income needed to charge lower-than-market rates to high-risk older people.
Under Obamacare, young people will subsidize older people — that's the only way to carry out the program that eliminates pre-existing conditions from consideration in pricing. If the young don't show up, Obamacare will be swamped with millions of dollars, perhaps billions, in unanticipated costs.
Obamacare, of course, anticipated that issue. That's why it compels all individuals to sign up — no one has a choice about making this purchase. Indeed, the constitutionality of the government's order to individuals to purchase health insurance was one of the biggest issues resolved by the U.S. Supreme Court when it affirmed Obamacare by a 5-4 vote.
Those individuals who do not purchase health insurance will be punished by the government in the form of a fine, called a tax under the law, to be paid each year on their income taxes.
The tax, however, will cost younger people considerably less than health insurance under Obamacare.
Under the traditional rules of economics, individuals generally are expected to act in their own financial interests. Obamacare turns that premise upside down by expecting, at least in the case of the individual mandate, healthy young people to act in what the legislation perceives to be the greater good, buying the insurance when paying the proposed fine would be cheaper.
Public opinion polls indicate that the public has little to no understanding of the Obamacare legislation, which is no great surprise considering the bill was in excess of 2,000 pages.
A recent Wall Street Journal/NBC News poll indicates that 70 percent of the public either doesn't understand or only understands a small part of the legislation's goals. Just 31 percent of respondents thought passing it was a good idea, compared to 44 percent who thought it was a bad idea and 25 percent who have no opinion.
That lack of enthusiasm probably is driven, in part, by negative publicity surrounding the implementation problems posed by Obamacare.
The bill's employer mandate requiring companies to provide health insurance for all full-time employees drew so many complaints about implementation problems that Obama unilaterally delayed the original effective date, Jan. 1, 2014, by a year to 2015.
Union leaders, traditional allies of Democratic presidents, also are getting increasingly antsy as they learn that Obamacare provisions could jeopardize their members' so-called "Cadillac" coverage.
Terrence Sullivan, president of the Laborers' International Union of North America, recently said Obamacare and its unintended consequences must be "fixed, fixed, fixed."
"If the Affordable Care Act is not fixed, and it destroys the health and welfare funds that we have fought for and stand for, then I believe it needs to be repealed," Sullivan said earlier this month at an AFL-CIO convention in Los Angeles, Calif.
Hiccups, of course, are to be expected anytime the government implements a massive new social entitlement program.
With the obvious exception of the employer mandate, President Obama and his team appear unbothered by the challenges they face as this sweeping legislation gets ever-closer to becoming a reality.