7/27/2019 Doomed From the Start
http://slidepdf.com/reader/full/doomed-from-the-start 1/4
Doomed From the Start
Why Obamacare's Disastrous Rollout is No Surprise
Kimberly J. Morgan KIMBERLY J. MORGAN is Associate Professor of Political Science and
International Affairs at George Washington University.
It would be an understatement to say that this month’s rollout of the
Affordable Care Act, U.S. President Barack Obama’s 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
7/27/2019 Doomed From the Start
http://slidepdf.com/reader/full/doomed-from-the-start 2/4
country whose entire population was seven million. In 2006, the Netherlands
adopted a health-care system in which individuals could choose their coverage 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 Obamacare’s current problems lies in the law’s
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 residents are 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 of political 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 Act’s 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 for some seniors [4] who assumed they needed to shop for a new
plan, perhaps because they (understandably) mixed up the exchanges with the
7/27/2019 Doomed From the Start
http://slidepdf.com/reader/full/doomed-from-the-start 3/4
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 Act’s 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-state partnerships. 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 systematically starved 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 exchanges reveal [6].
7/27/2019 Doomed From the Start
http://slidepdf.com/reader/full/doomed-from-the-start 4/4
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.Obamacare’s early dif ficulties may provide an easy target for politicians, but
those politicians have only to look into the mirror to see who bears
responsibility.