Why Obamacare Can’t Fail

Every time the health care reform law misses a target, the White House furnishes a new one.

Health and Human Services Secretary Kathleen Sebelius (L) leaves after the House Energy and Commerce Committee hearing about the troubled launch of the Healthcare.gov website October 30, 2013.
National Journal
Sam Baker
Jan. 5, 2014, 8 a.m.

The stand­ard of suc­cess for the Af­ford­able Care Act keeps get­ting weak­er.

Wheth­er in en­roll­ment num­bers, fed­er­al sav­ings, or the work­ings of its web­site, the White House has re­peatedly lowered the bar for the law when it has missed ex­pect­a­tions, re­pla­cing ini­tial stand­ards with ones that are lower, squish­i­er, or nonex­ist­ent.

Just a few months ago, Health and Hu­man Ser­vices Sec­ret­ary Kath­leen Se­beli­us said suc­cess would en­tail cov­er­ing 7 mil­lion people this year. Now, the White House has dis­owned that stand­ard for en­roll­ment — and it hasn’t come up with a new one.

Pres­id­ent Obama touted Health­Care.gov, the main portal to shop for cov­er­age, as the “Amazon” or “Ex­pe­dia” of health in­sur­ance. Now the ad­min­is­tra­tion is call­ing it a win for the site to be “func­tion­al for the vast ma­jor­ity of users,” and even that stand­ard has been watered down since its de­but.

And when the law passed, it was ex­pec­ted to re­duce the fed­er­al de­fi­cit by about $210 bil­lion over a dec­ade. Now the pro­jec­ted sav­ings are about half that, largely be­cause one big pro­gram proved un­work­able.

At this point, the White House’s defin­i­tion of suc­cess seems to ba­sic­ally boil down to “not fail­ure” — a stand­ard that falls far short for a law that used up so much polit­ic­al cap­it­al and was sold with such grand prom­ises.

At this point, when asked to define suc­cess for 2014, White House of­fi­cials of­ten an­swer by not­ing that the worst-case scen­ario for the health care law is un­likely to hap­pen. But that “non-fail­ure” stand­ard falls far short of the high ex­pect­a­tions Demo­crats once had for the law, and of the prom­ises they made to sell it.

“They are mas­ters at mov­ing the goal­posts, and they have done that a lot. They’ll move the goal­posts again,” said Douglas Holtz-Eakin, a con­ser­vat­ive eco­nom­ist and former Con­gres­sion­al Budget Of­fice dir­ect­or who now leads the Amer­ic­an Ac­tion For­um.

Most re­cently, the White House has been look­ing to dis­tance it­self from the ex­pect­a­tion that it would en­roll about 7 mil­lion people in the first year of Obama­care cov­er­age. The es­tim­ate came from the CBO, and the ad­min­is­tra­tion de­scribed it in pre-launch memos as a “tar­get” for 2014. “I think suc­cess looks like at least 7 mil­lion people hav­ing signed up by the end of March 2014,” Se­beli­us said in Septem­ber.

But HHS’s abil­ity to hit that mark is in ques­tion be­cause of the rocky Health­Care.gov rol­lout, and the ad­min­is­tra­tion now says 7 mil­lion wasn’t its goal, or even its es­tim­ate.

“That was CBO’s pro­jec­tion, not ours. I’m not aware that we put a nu­mer­ic­al pro­jec­tion on what we hope to see by March 31st,” White House spokes­man Jay Car­ney said last week.

(When the White House says the law will ul­ti­mately cov­er 25 mil­lion people, or that it will re­duce the de­fi­cit — two points it is still fond of mak­ing — those pre­dic­tions are also based on CBO es­tim­ates.)

Re­gard­less of the White House’s defin­i­tion, policy ex­perts — even con­ser­vat­ives — agree that Obama­care will sur­vive 2014 even if it doesn’t hit 7 mil­lion people.

The total num­ber of people en­rolled, across all 50 states, is a polit­ic­al met­ric as much as a policy one. Each state is its own risk pool, and each in­surer with­in each state will base its premi­ums on the people who sign up for its plans. So, al­though a crit­ic­al mass of people need to sign up in each state, the law’s sur­viv­al likely de­pends more on the mix of healthy versus old and sick en­rollees in each state.

The law also has enough built-in checks, bal­ances, and safety nets that the worst-case scen­ario — a “death spir­al” in which rising premi­ums be­get few­er cus­tom­ers, which be­gets even high­er premi­ums, and so on — seems highly un­likely.

And Demo­crats aren’t alone is dis­tort­ing the law’s re­cord of suc­cess or fail­ure. Re­pub­lic­ans have been call­ing the law a fail­ure since well be­fore any of its pro­vi­sions took ef­fect, in­clud­ing blam­ing it for health care real­it­ies that ex­is­ted long be­fore Obama­care was born.

Demo­crats knew Re­pub­lic­ans would call the health care law and the Health­Care.gov launch a dis­aster no mat­ter what happened, and the GOP’s dooms­day pre­dic­tions got Demo­crats off the hook from set­ting any ex­pect­a­tions of their own — and Demo­crats have taken full ad­vant­age of the lowered ex­pect­a­tions.

But that doesn’t erase the high bar they set in 2010, when Obama and con­gres­sion­al Demo­crats put their polit­ic­al fu­tures on the line to get health care passed. Obama said in a 2010 speech about health care that “we can do great things, and that here and now we will meet his­tory’s test.”

The point of passing the Af­ford­able Care Act was to cov­er some 30 mil­lion un­in­sured Amer­ic­ans, and pro­gress to­ward that over-arch­ing goal will be meas­ured by how many people ac­tu­ally get covered each year.

But past that, the White House won’t get in­to spe­cif­ics. Asked for a 2014 en­roll­ment goal, a White House of­fi­cial said the goal was to have a “ro­bust in­sur­ance mar­ket with a good mix of people” and to en­roll “as many people as pos­sible.”

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