As the health care exchange rollout debacle continues, we are frequently asked for comment or thoughts. This is a process that it is going to go on for an extended period of time. We were among those at the start of the reform law debate who said it was unworkable, both in design and in execution. But this is no time for “I told you so” or Schadenfreude on the part of opponents. The consequences are too serious to too many Americans. It is more apparent than ever that those who supported and voted for this law had no idea what was in the bill, how it worked, what the potential unintended consequences were or even what the intended consequences–like people losing their existing plans–might be. They recklessly plunged ahead with a law that would and has upended American health care. Now many want to backtrack, but it really is too late for that. In regard to the information technology efforts required, for the exchanges and for the other aspects of the law, anyone who has studied the history of government IT and government health IT would know that a disaster was looming. The government is not capable of on-time, reasonably priced, working software development. The best thing would be to just let a private entity design and build the system with no requirements, input or interference from government employees. Notwithstanding the billions of dollars already sunk into the effort, that would still be the best and fastest approach to getting a secure, effective set of exchange software.
But, as we have note before, the software is not the biggest problem. The design of the law was to completely transform existing coverage; you can only do that by forcing tens of millions of Americans to lose their existing health plans. And that transformation involved mandated elements of coverage that inevitably force the policies to cost far more than they did before, while worsening the overall set of benefits by increasing deductibles and copays. Again, any one who has had any involvement in the design and pricing of health insurance policies knew this was going to happen. They were ignored. We have only seen the tip of the iceberg in regard to coverage changes and the forced relocation of Americans to insurance camps they didn’t choose and don’t want. And because of this, I strongly predict that young and healthy people will not enroll and we will see even more pricing pressures or bankruptcy of health plans next year and in following years. All because a few elitist ideologues with no experience think they know what is best for a country of 300 million individuals. The solution here is also complex, but basically involves allowing a far broader range of plans with far fewer mandated benefits to be offered on the exchanges and to be counted as acceptable coverage. People should be given the widest range of choices possible, including allowing healthy and young people to purchase very stripped down policies with basically catastrophic coverage. Pricing ranges should be widened; there is no rational justification for forcing one group to pay the health costs of another. In particular, people who have and continue to engage in unhealthy behaviors should pay for the consequences of those behaviors.
Finally, the dire public finance consequences of the current reform law are becoming obvious. Medicaid enrollments will be way up, because these people have the incentive to get their “free” coverage and because people are lying, and in some cases being encouraged to lie, to demonstrate Medicaid eligibility. The same is true for subsidy eligibility for commercial coverage and in both cases their is no effective verification method or even effort. The Administration simply has no interest in trying to ensure that only those who should get Medicaid or subsidies get them. So the expenditures are going to be greater than projected for the federal government and ultimately the states, and the revenues are going to be far less. It was unsustainable to begin with; it will quickly become more so. The only good thing out of this mess is that the American people will be reminded of the virtue of their long-standing skepticism regarding big government and those who created this mess are likely to pay the political price for it. That is small comfort for the millions of Americans who are seeing dramatic change in their health care and health care coverage.