Tuesday, October 1, 2013

And So It Begins...How Will It End?

From the time Japan bombed Pearl Harbor until the United States landed troops on Okinawa in World War II took 1,211 days.

From the time Obamacare was passed into law on March 23, 2010, 1,288 days have passed.

Japan ultimately surrendered unconditionally to the United States 1,347 days after they attacked Pearl Harbor.

When Obamacare is scheduled to take effect on January 1, 2014 there will have been 1,380 days for the federal and state governments to get ready for the implementation of Obamacare.

However, despite a longer period to prepare for Obamacare taking effect than it took for the United States to win World War II, it appears that the Obamacare exchanges are woefully unprepared for the launch.

We have already witnessed scores of waivers, delays and exemptions including:

  • delay of the employer mandate for one year
  • waiver of the requirement that new insurance marketplaces verify consumers' income and health insurance status
  • special waiver given to Congress and their staff to be allowed  to purchase their health care in the exchanges with federal subsidies which is not provided for in the law
  • the cap on out-of-pocket costs required in the legislation has been delayed for one a year
  • the small business exchange which was supposed to allow small businesses to purchase coverage for their employees has been delayed

Here is how The New York Times described the state of the exchanges as Opening Day for Obamacare is upon us.  You have to wonder if The New York Times is reporting it this way, how bad is it really?

Tuesday is the long-awaited kickoff for President Obama’s signature health care law, when millions of Americans can start signing up for new insurance options. Yet across the country, officials are issuing warnings that despite fevered efforts, their new insurance exchanges — online markets where people can shop for health plans and see if they qualify for federal subsidies — will not be fully operational for weeks or even months.
You can't get much more sympathetic to Obamacare than states like Maryland and Oregon.  Democratic blue through and through.  You can't blame Republican intransigence for any problems in states like this. However, here is what The Times says about the readiness of these two states.
In an indication of the difficulty of the job, some of the states with delays, like Oregon and Maryland, have been preparing for many months and have political leaders who strongly support the law.
What is going on in the 30 states that have declined to operate their exchanges and turned it over to the federal government?

“It makes you wonder about the exchanges that actually have been at this a shorter period of time,” said Jon Kingsdale, a managing director at Wakely Consulting Group, who is advising several state-run exchanges. “Do they even know what their problems are?”
Of course, it is not for lack of money. Billions of taxpayer dollars have gone into the effort.
Although the exchanges have been able to tap billions of federal start-up dollars and hire companies like Accenture, Oracle and Xerox to help with the work, their task has been highly complex and their time frame tight.
The web portals for the exchanges have to be able to share information in real time with insurance companies, state agencies and the federal government, which has built a “data hub” through which it can verify the income and citizenship of people applying for subsidies or Medicaid. Each portal has to undergo rigorous testing to ensure, for example, that data will flow properly, that the portal is secure and that it can handle heavy volume. Much of the testing is still going on.
Much of the testing is going on days before this is supposed to go live?  If I had done this with the benefits programs I used to administer I would have not lasted long in my job.

I wrote this six months ago in "Obamacare Is Still Dangerous For Democrats" and I still hold the same views.

The first question I have is whether the health insurance exchanges will be ready and will function as intended?  I believe there is a good chance that the entire process could be chaotic and confusing for the public.  
The fact is that the information technology challenge to establish the exchanges is considerable.  This challenge has become even more pronounced since so many states have decided to forego establishing their own exchange and have delegated that responsibility to the federal government.
If Obamacare gets off to a rough start with the public due to chaos and confusion with the health exchanges this could signal deep problems for the program going forward.  It is hard to recover from poor first impressions, especially if media attention picks up on it.   A compliant Obama-friendly media is not likely to play up any problems, however, if they jump on the bandwagon if things go poorly it will be difficult to turn around the public's perception of the program.

This truly looks like a potential train wreck but a lot will depend on how the problems are played in the media. Will the media cover for the problems or not? This will be an important indicator to watch.

It is also important to remember that, unlike other major social programs such as Social Security and Medicare, there is a different dynamic in play here than when those programs were implemented.  In those programs everyone was in the same situation.  You had a broad-based tax applied to most everyone and everyone would eventually benefit at some point.  That is not the case with Obamacare.  Everyone is not in this together.  There are winners but there are also a lot of losers.  How much noise do the losers make compared to the winners.  Will the system work as promised?  If the noise level and bad PR starts, do the Democrats continue to stand together.  Or do they start looking nervously at 2014?

The future of Obamacare will not be decided in the next few days.  It will ultimately be decided in the court of public opinion over the next few years.  When the public really sees it in operation, will they embrace it?  We have been told since its passage by the President and the Democrats that the public would come to love Obamacare.  We have yet to see that yet after nearly 1,300 days.  Watch closely over the coming months to see how the narrative on Obamacare plays out.

Laws that do not have public backing do not survive over the long term.   Both parties have left little question where they stand on the issue.  The question I am interested in seeing is whether both parties will still be standing in the same way on the issue come the 2014 elections.

And so it begins...how will it end?

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