Turning Obamacare into a Frankenmonster

Vulnerable Democrats need to be seen fixing Obamacare. Obama needs them not to.

People dressed as Frankenstein's Monster and Mrs. Frankenstein's Monster stand on the South Lawn of the White House, October 31.
National Journal
Sam Baker
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Sam Baker
Nov. 20, 2013, 5 p.m.

Burdened by the botched rol­lout of his health care law, Pres­id­ent Obama has run out of good op­tions.

He can stick to a policy he fought for and be­lieves in, or he can throw a polit­ic­al life­line to Demo­crats who are pan­icked, furi­ous at the ad­min­is­tra­tion, and do­ing their best to keep the Sen­ate in Demo­crat­ic hands. He can’t do both.

Obama has already tried to thread this needle once, with his “fix” to ad­dress a wave of can­celed in­sur­ance plans — or, more ac­cur­ately, to ad­dress the bad pub­li­city sur­round­ing can­celed in­sur­ance plans. His an­nounce­ment gave Demo­crats some breath­ing room, but it frus­trated al­lies who are more com­mit­ted to the Af­ford­able Care Act’s policies than to the party that passed them.

If Con­gres­sion­al Demo­crats keep fret­ting and Obama keeps cav­ing, the al­lies say, the party risks tinker­ing its way in­to a polit­ic­al and policy dis­aster: a mal­func­tion­ing law full of half-meas­ures that neither de­liv­ers on its prom­ises nor provides any­thing for em­battled Demo­crats to rally around.

“I’m con­cerned that the polit­ic­al dif­fi­culties of the mo­ment are go­ing to un­der­mine the ba­sic found­a­tion on which the stat­ute is built,” said Tim Jost, a Wash­ing­ton & Lee Uni­versity law pro­fess­or and a strong sup­port­er of the health care law.

Obama’s own polit­ic­al leg­acy is on the line with health care. He needs the law to work in the long run, and even in­noc­u­ous-seem­ing polit­ic­al con­ces­sions now can cre­ate big­ger prob­lems down the road. Even a change as minor as ex­tend­ing the law’s en­roll­ment win­dow, as Sen. Jeanne Shaheen, D-N.H., has pro­posed, could have un­in­ten­ded con­sequences. It’s the defined en­roll­ment peri­od that stops healthy people from tak­ing their chances without in­sur­ance and sign­ing up on their way to the emer­gency room if they need it.

“Our start­ing point has to be that any­thing you do right now makes the policy worse,” said Jonath­an Gruber, a health care eco­nom­ist at MIT who helped design the law. “I think the policy will work if we leave it alone.”

That’s an in­creas­ingly hard sell, though, for con­gres­sion­al Demo­crats who have already fol­lowed Obama this far down the road, only to end up with a broken web­site and a ra­ging con­tro­versy over can­celed in­sur­ance plans.

Demo­crats es­sen­tially gave up years ago try­ing to re­verse the law’s stub­bornly am­bi­val­ent polling, say­ing the law would work once it was in place and everything would be fine. But that strategy hinged on the White House im­ple­ment­ing the law well, and in­stead the ad­min­is­tra­tion de­livered a bungled web­site whose high-pro­file fail­ure made the in­ev­it­able stor­ies about plan can­cel­la­tions worse.

Now, neg­at­ive per­cep­tions are be­ing ce­men­ted and rank-and-file law­makers want to show their con­stitu­ents either an im­prove­ment or a vote in fa­vor of an im­prove­ment. A de­tailed ex­plan­a­tion of the best ways to struc­ture an in­sur­ance mar­ket won’t cut it.

Obama tried to de­liv­er, but Demo­crats left their op­tions open even after he an­nounced his ad­min­is­trat­ive “fix” for can­celed plans, with in-cycle Sen­ate Demo­crat Mary Landrieu, D-La., say­ing le­gis­la­tion was needed to make the change stick.

Policy-minded sup­port­ers of the health care law are un­happy too and wor­ried about Obama’s will­ing­ness to wade in­to the is­sue. The way Obama ad­dressed the is­sue was the “least bad thing you could do,” Gruber said, but go­ing any fur­ther — as many con­gres­sion­al Demo­crats want to do — would only fur­ther per­petu­ate the two-tiered sys­tem that Obama­care is try­ing to equal­ize.

On its face, the tradeoff un­der­ly­ing the Af­ford­able Care Act seems simple: Guar­an­tee cov­er­age to sick people, and bring healthy people in­to the sys­tem to off­set the cost. The ex­e­cu­tion of that bal­ance, though, is com­plic­ated. It re­lies on a web of spe­cif­ic policies that work to­geth­er. Many of those spe­cif­ic tools — such as push­ing healthy people off of their in­ex­pens­ive plans — are un­pop­u­lar on their own.

But pulling on any one of those threads — and there are no few­er than four Demo­crat­ic plans that would do just that — could up­set the law’s built-in ef­forts to get people covered and avoid ma­jor premi­um hikes next year. Let­ting more people keep old health care plans would up­set that bal­ance. So would delay­ing the in­di­vidu­al man­date, as Sen. Joe Manchin, D-W. Va., has pro­posed. Even Shaheen’s in­noc­u­ous-look­ing pro­pos­al to ex­tend the win­dow to buy cov­er­age is mak­ing in­sur­ance com­pan­ies nervous.

All of those bills would chip away, to some ex­tent, at policies de­signed to push young, healthy people in­to Obama­care’s mar­ket­places. And get­ting young people to sign up is the key to the law’s ul­ti­mate suc­cess.

“I would really hope that there would be some forti­tude in the face of all this “¦ I can un­der­stand that they’re nervous, but I hope they can keep a longer per­spect­ive on things,” Jost said.

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