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.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at 
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Kevin, I enjoyed your blog on the Affordable Care Act. It’s well done, but I fundamentally disagree with your assertion that “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.” That seems like the American way and almost undeniably sensible. I believe your prescription is totally unworkable and borders on a Utopian view of freedom.
As a historian, you will recall that in the 19th C., fire departments were privately owned companies and made a profit by signing up subscribers, who would get a plaque to put on their house as long as they maintained coverage. The fire department would show up at fires of uncovered houses but only watch them burn and make sure that the fire did not spread to covered houses. We still have private fire companies, but only a few operate on a subscription basis. It’s just a no-brainer in this case of public safety that it would be a moral hazard to enable fool hardy people to take a chance on covering their property and endangering the properties of others.
The great majority of US citizens are deluded if they think they are making a sound business decision by signing up for coverage that only covers catastrophe. Most citizens have the means to pay a little more and be covered for the much more likely scenario of medical expenses that will still put them behind the 8-ball but fall short of catastrophe. If you are a young person and go to the ER complaining of the worse headache you have ever had, you will leave with a bill for about $5,000, as was the case recently for my daughter. She had pretty good insurance from my policy, but it left her on the hook for $2000. A catastrophic policy would not likely have covered a dime. This is the kind of debt that can spiral down into bankruptcy if you don’t have a full time job and/or deeper pockets behind you.
But, I agree that people should nonetheless have the freedom to make the choice to go bare or close to it—uninformed as it may be. The only problem is that I as a taxpayer have to pick up the cost of this choice for millions of people who in effect free load on the system. Because we don’t let people die in the streets or let their houses burn, we are all on the hook for the costs that are not covered by insurance or the available cash of the deluded or deadbeat.
I will agree with your contempt if there were deception or poor assumptions involved in projecting what the actual costs would be for coverage when all is said and done with ACA. I just don’t know enough to now judge. But, it is clear that yours is a self-fulfilling prophecy to the extent that people are presented and encouraged to take unwise and unfair choices. I disapprove of the former but object to the latter. I am all for Freedom—the right to make bad personal choices but not the right to tread on me.
The irony is that idea of the ACA originated with the Heritage Foundation and was based on Milton Friedman economic principles. ACA was intended as a way of avoiding the next stop—a single-payer system run by the government. Now, ACA is being cynically and hypocritically used by politicians as a wedge issue in a culture war. It is totally against our individual and collective interests for ACA to fail. If it does not succeed, we will likely go back to a totally broke and unsustainable condition, which likely will lead to implosion and eventually a single-payer system. By that time, we may be envious of conditions in Canada and UK.
Rather than predict its doom, let’s fix ACA as a non-partisan imperative.
To our health!
-Zan