Doomed From the Start

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    Doomed From the Start

    Why Obamacare's Disastrous Rollout is No Surprise

    Kimberly J. MorganKIMBERLY J. MORGAN is Associate Professor of Political Science and

    International Affairs at George Washington University.

    It would be an understatement to say that this months rollout of the

    Affordable Care Act, U.S. President Barack Obamas initiative to ensure that

    all Americans have access to health insurance, has not gone according to

    plan. On October 1, the online insurance marketplaces that are the lynchpin

    of Obamacare (as the law has colloquially become known) were opened for

    business -- but it quickly became clear that they are not functioning properly.Computer malfunctions have prevented enrollment, consumers are frustrated,

    and politicians and pundits are attacking Obama for the resultant train

    wreck[1]. The problems are all the more embarrassing given that publicly

    funded health-insurance programs are commonplace in most other countries.

    But the fact that the White House is having trouble implementing Obamacare

    also should not come as a particular surprise. It is not that the Obamaadministration is especially incompetent. Rather, the program it is charged

    with executing is a complex public-private hybrid that has no real precedentelsewhere in the world. The blend is purely American: Policymakers in the

    United States have a history of jerry-rigging complicated programs of this

    sort precisely because they have little faith in government. The result is a

    self-fulfilling prophecy that fuels only deeper public cynicism about the

    welfare state.

    Among the advanced industrialized countries there is no real parallel to

    Obamacare. In part, that is because most countries established universal

    health insurance long ago, some fairly gradually. By contrast, the UnitedStates is abruptly expanding coverage to millions -- probably around seven

    million people will be purchasing insurance coverage through the new

    exchanges by 2014. Even the closest precedents fall far short of this. In the

    mid-1990s, Switzerland boosted health-insurance coverage to try to reach thefour percent of the population that was not yet covered. But that was in a

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    country whose entire population was seven million. In 2006, the Netherlands

    adopted a health-care system in which individuals could choose theircoverage from competing health plans. Yet, unlike in the United States,

    virtually all individuals and their families were already covered, and the vast

    majority opted to keep the plan they had.

    The real source of Obamacares current problems lies in the laws

    complexity. A straightforward way to assure coverage would have been to

    extend an existing, well-worn program to more people. This is how most

    other countries guarantee health insurance. In the British National HealthService, there is little that beneficiaries need to do in order to receive health

    insurance, as all residentsare automatically entitled. Other countries rely on

    private intermediaries that provide insurance -- nonprofit insurance funds in

    Germany or Switzerland, for example, or a mix of proprietary and nonprofitinsurers in the Netherlands. Even in those instances, benefits packages and

    entitlements are highly standardized, making these health-care systems

    relatively uncomplicated from the standpoint of beneficiaries.

    In the United States, political antipathy to government programs precludes

    this kind of straightforward administrative solution. Faced with such hostility,

    policymakers regularly rig up complex public-private, and often federal-state,

    arrangements that are opaque to the public, difficult to administer, and

    inefficient in their operation -- what Andrea Louise Campbell, a professor ofpolitical science at the Massachusetts Institute of Technology, and I describe

    as aRube Goldberg welfare state[2] -- because of the complicated way inwhich it achieves even basic tasks -- and what the political scientist Steven

    Teles aptly labels a kludgeocracy[3].

    The Affordable Care Acts health-insurance exchanges exemplify the

    labyrinthine quality of U.S. social policy. The first hurdle for consumers is

    figuring out if they are eligible for the new benefits: Although anyone lacking

    insurance can shop for it on the new health-insurance marketplaces, onlythose with incomes in a certain range are eligible for subsidies. The subsidies

    vary by income. Those already enrolled in a government health program such

    as Medicare do not need to buy coverage on the exchanges, a source of

    confusion forsome seniors[4] who assumed they needed to shop for a new

    plan, perhaps because they (understandably) mixed up the exchanges with the

    http://global.oup.com/academic/product/the-delegated-welfare-state-9780199730346;jsessionid=67F39CDE5BCF18090CF6CB0ACBFE2AD8?cc=us&lang=en&http://global.oup.com/academic/product/the-delegated-welfare-state-9780199730346;jsessionid=67F39CDE5BCF18090CF6CB0ACBFE2AD8?cc=us&lang=en&http://newamerica.net/publications/policy/kludgeocracy_the_american_way_of_policyhttp://newamerica.net/publications/policy/kludgeocracy_the_american_way_of_policyhttp://www.kaiserhealthnews.org/Stories/2013/August/26/Medicare-seniors-do-not-need-to-shop-on-the-exchange.aspxhttp://www.kaiserhealthnews.org/Stories/2013/August/26/Medicare-seniors-do-not-need-to-shop-on-the-exchange.aspxhttp://www.kaiserhealthnews.org/Stories/2013/August/26/Medicare-seniors-do-not-need-to-shop-on-the-exchange.aspxhttp://www.kaiserhealthnews.org/Stories/2013/August/26/Medicare-seniors-do-not-need-to-shop-on-the-exchange.aspxhttp://newamerica.net/publications/policy/kludgeocracy_the_american_way_of_policyhttp://global.oup.com/academic/product/the-delegated-welfare-state-9780199730346;jsessionid=67F39CDE5BCF18090CF6CB0ACBFE2AD8?cc=us&lang=en&
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    open enrollment period for the marketized versions of Medicare -- the

    Medicare Advantage and the Part D drug plan.

    The new health-insurance exchanges are also meant to help people find out if

    their incomes are low enough to qualify for Medicaid, in which case they willget their insurance in a different fashion -- through the Medicaid program run

    by the state where they reside. Yet because the Supreme Court overturned the

    Affordable Care Acts mandate that states expand Medicaid, about half of the

    state governments are refusing to do so. That means that eligibility standards

    vary widely across the country. Thus, two people with the same poverty-lineincome in Arkansas and neighboring Mississippi will not be eligible for the

    same health program: In Arkansas, the person will go on Medicaid, whereas

    in Mississippi the person may choose to buy a plan on the health-insurance

    exchange but would receive no subsidy for it.

    The information systems underpinning the insurance marketplaces have to

    mesh multiple government and private databases in order to determineeligibility, entitlement to benefits, and available plans. It is not surprising,

    then, that the system has broken down in numerous instances. It also requires

    considerable coordination between the federal government and the 50 states,

    which are allowed to set up their own health-care exchanges. So far, only 17

    states, including the District of Columbia, chose to manage their own

    exchanges, while seven others entered into varying forms of federal-statepartnerships. Another 27 states left it up to the federal government to set up

    the exchange, and it is the federal marketplace, which has received a veryhigh volume of visitors, that has had the most operational difficulties.

    The burdens of implementing Obamacare were dumped on a federal agency -

    - the Centers for Medicare and Medicaid Services -- that already oversees

    enormous national programs on a limited budget. Although the agency

    received some funding increases, it operates with less than one-tenth the

    number of federal employees of the Social Security Administration. Thosewho are fearful that the agency would gain too much influence over U.S.

    health care systematicallystarved it of resources[5]. Thus, much of its work

    is outsourced to private contractors, whose performance is highly variable, as

    the current problems in the health-insurance exchangesreveal[6].

    http://content.healthaffairs.org/content/28/4/w688.fullhttp://content.healthaffairs.org/content/28/4/w688.fullhttp://content.healthaffairs.org/content/28/4/w688.fullhttp://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/http://content.healthaffairs.org/content/28/4/w688.full
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    The larger irony here is that administering a complex public-private health-

    care system often requires more government, not less. Yet the very sameimpulse that created this system also impairs the government agencies that

    could effectively oversee it. The programs, as a result, are messy and

    confusing. It should be no surprise that trust in government is so low.Obamacares early difficulties may provide an easy target for politicians, but

    those politicians have only to look into the mirror to see who bears

    responsibility.