Wonkbook: Obamacare’s October surprise

September 30, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

(Photo by Jonathan Alcorn/Reuters)
(Photo by Jonathan Alcorn/Reuters)

Here's how today's Wonkbook was supposed to start: We're about 16 hours from open enrollment in Obamacare going live. The law, which has dominated American politics for three years even as it's been an abstraction to most Americans, is about to become very real.

But here's how it actually has to start: We're about 16 hours away from a government shutdown. That's more than enough time for the House and Senate to both pass a bill averting a shutdown. But the odds of that happening are increasingly remote -- and that's because Obamacare is set to begin in 16 hours.

On Saturday, Speaker Boehner agreed to load the continuing resolution with a one-year delay of Obamacare, a repeal of the medical-device tax, and a "conscience clause" assuring health-care providers they don't need to offer birth control if they don't want to. They wrote a bill, in other words, that the Senate can't accept. His right flank was ecstatic.

"Chants of 'Vote! Vote! Vote!' echoed through the room," report Robert Costa and Jonathan Strong. "Standing in the back, Boehner’s deputies watched the scene and smiled. 'People went bonkers,' says Representative Matt Salmon of Arizona. Representative John Culberson of Texas was so enthused that he yelled, 'Let’s roll!' after hearing Boehner’s remarks. Culberson later told reporters he was alluding to the cry of United 93 passenger Todd Beamer."

All this for a bill that House Republicans know the Senate will reject.

So the federal government will probably shut down tonight. And, at about the same moment, Obamacare will go live, as the shutdown does little to impede the law.

There's a silver lining in this for Obamacare, as well as a real danger.

The Obama administration has been a bit afraid of October 1st. After all, no major product launches without a hitch, and Obamacare is more major, and facing more politicized scrutiny, than almost any product the federal government has ever launched. The fear was that things would go wrong on October 1st and the press, looking for dramatic stories of Obamacare glitches, would swarm the anecdotes, giving the public the impression that the law was a failure even as most of it was working fine and the bugs were being quickly fixed.

But with a government shutdown and a looming debt-ceiling crisis obsessing the media and the country, the media simply has less bandwidth to cover the rollout of the health-care law. That gives the administration, as well as the states, a bit more breathing room to find and fix bugs in the early days without seeing the law declared a failure.

The downside for the law is that less focus on Obamacare means fewer people hearing that the insurance marketplaces have gone live, and thus fewer people knowing they should go and sign up for coverage. The Obama administration, some of the states, and a consortium of outside actors all have plans to promote the law through paid media in the coming weeks and months, but the launch could've earned them a lot of valuable free media.

But all of this speaks to why the Republican Party is so frightened. Until now, Obamacare has been an abstraction. You can repeal an abstraction. Tomorrow, it becomes a reality. And reality is a lot harder to repeal.

Wonkbook's Number of the Day: 67 percent and 50 percent. As of late Friday, Obamacare's exchange software only gets the amount of subsidies an insurance applicant qualifies for two-thirds of the time. But, hey, that's up from half the time as of earlier this week.

Wonkbook's Quotation of the Day: You've got to check out the interview Wonkblog's own Lydia DePillis did with World Fuel Services chairman Paul Stebbins: "The thing that got the business community catalyzed is you cannot have this reckless, nihilistic, fundamentalist, ideologically driven governance. That ultimately, advocacy can't trump governance."

Wonkbook's Graphs of the Day: Way back in 2011, The Commonwealth Fund put together these great chart books (see here and here) on health care systems in developed countries.

Wonkbook's Top 5 Stories: 1) Obamacare's insurance exchanges launch; 2) David Vitter to the rescue?; 3) Justice Dept. sues N.C.; 4) the Janet Yellen rollout begins; and 5) gun accidents are common.

1) Top story: Obamacare's October surprises

Health insurance exchanges left an incredible amount of work for the very last minute. "“I have no idea what this thing’s going to look like on Oct. 1,” Mr. King said one afternoon last week as dozens of tense-looking programmers, scattered through the exchange offices outside Portland, rushed to finish testing and fix problems. “We could crash and burn and have to close it down.”...At the state’s exchange here, known as Cover Oregon, posters urge the staff to “Keep Calm and Go Live.” Last week, 180 staff members and consultants were proofing some 500,000 lines of computer code, 1,500 Web site pages and 5,000 possible premium rates that will vary depending on where people live, how old they are, how much money they make and which insurance company and plan they choose. A downstairs conference room had taken on the look of a modern-day sweatshop, with long tables lined with workers tapping away on laptops. Even the bike storage room had been converted to a testing room." Abby Goodnough in The New York Times.

...Obamacare, caught by the thorn bush. "Nonprofit groups and brokers that will help enroll consumers in the marketplaces, known as exchanges, say they haven't yet had a chance to preview the systems. Technical problems have limited certification for some nonprofit workers involved. And some of these groups say they haven't fully staffed up for the influx...The exchange software that determines whether people get the subsidies was returning accurate determinations about two-thirds of the time late Friday, up from less than 50% earlier in the week, one person familiar with the development said." Christopher Weaver, Timothy W. Martin, and Louise Radnofsky in The Wall Street Journal.

@ezraklein: How much less focus will there be on initial Obamacare glitches this week because of shutdown/debt ceiling coverage?

Atul Gawande in The New Yorker on Obamacare's launch. "Conservatives keep hoping that they can drive the system to collapse. That won’t happen. Enough people, states, and health-care interests are committed to making it work, just as the Massachusetts version has for the past seven years. And people now have a straightforward way to resist the forces of obstruction: sign up for coverage, if they don’t have it, and help others do so as well."

Obamacare's open questions. "While some people desperate for coverage will need no persuading to sign up, for others the decision will amount to a series of complicated calculations that would challenge an accounting whiz, let alone an ordinary human: Are the new plans less expensive or more generous than existing ones? How do premiums and out-of-pocket costs compare? Are the networks of doctors and hospitals the most desirable? Who qualifies for how much of a subsidy, and what is the tax penalty for a miscalculation?" Katie Thomas and Reed Abelson in The New York Times.

@mattyglesias: GOP on ObamaCare: It doesn’t contain enough cost control measures and the cost control measures it contains should all be repealed.

All the ways to get out of Obamacare. "Have you been unable to pay a medical bill in the last two calendar years? Did you get a shut-off notice from a utility company? Did you experience substantial property damage from fire, flooding, or other natural or man-made disaster? Did you have to shell out unexpectedly on travel to go take care of your elderly mom, who got sick? Has your mortgage company moved to foreclose against you? If you can answer yes to any one of these questions in 2014 and do not have health insurance for at least nine months of that year, then you may be eligible for an exemption from the fee for remaining uninsured under the individual mandate...[I]f you look at the fee exemptions already available to individuals, it's clear that the individual mandate system is full of loopholes for people experiencing hardships and irregularities in their lives. So full, in fact, it seems to have accounted for a broad sweep of the possible things that might actually make it hard for someone to pay the fee for staying uninsured." Garance Franke-Ruta in The Atlantic.

Let's keep in mind that, no, you won't be able to deem Obamacare a success or failure on the first day. "The first weeks and months will be closely watched, but many policy experts say don't speed to judgment on how well they are working. While people can enroll for insurance until the end of March, real assessments of these marketplaces will take months if not years...A better test, he said, is how many people keep paying premiums month after month. "I would wait a while before one judged this," Capretta says. He predicts many people will drop out after paying a few months of premiums and realizing the cost of the insurance." Jordan Rau in Kaiser Health News. 

What polls show about Obamacare. "A day before the new health care exchanges open across the country, a new report shows that the more people understand it, the more they’re inclined to participate. But while most people are aware of the law’s requirement to buy insurance or face a penalty, a much smaller number have any understanding of the insurance exchanges opening on Tuesday or of the financial aid available to help people buy insurance. The findings, by The Commonwealth Fund, indicate that the Obama administration still has a long way to go to make the law’s complicated provisions clear to prospective buyers." The New York Times.

Interview: Kentucky Gov. Steve BeshearKaiser Health News.

U.S. to unveil new insurance options. "The Obama administration plans on Monday to announce scores of new health insurance options to be offered to consumers around the country by the Blue Cross and Blue Shield Association and the United States Office of Personnel Management, the agency that arranges health benefits for federal employees, according to administration officials...The options are part of a multistate insurance program...Federal officials said they had signed a contract with the Blue Cross and Blue Shield Association to offer health insurance next year in the marketplaces, or exchanges, of 30 states and the District of Columbia." Robert Pear in The New York Times.

Insurers balk at paying for intensive psychiatric care. "[T]he rules underlying mental health coverage in general — for both private insurers and the new health care exchanges — are still unclear, mental-health patient advocates say, leaving patients and families to grind through the process as best they can...Unlike some physical ailments for which there are reams of studies suggesting a relatively clear standard of care, there is often little accepted medical evidence to support the range of treatments for many mental illnesses, like schizophrenia and severe depression...[W]hen patients need months of residential care, for example, or meetings with a therapist several times a week, insurers balk. The insurance executives say that the medical benefits of such treatments are not clear and that the industry is essentially being asked to write a blank check." Reed Abelson in The New York Times.

LASZEWSKI: What to know when you're expecting to launch Obamacare. "What happens on the first day, for good or bad, will constitute only a tiny percentage of the open enrollment period. Consumers will likely visit the new websites many times before they make any decisions, and that is exactly as it should be...I will suggest that if the local press wants to be helpful they will waste less time asking how things went the first day and more time doing stories on the quality of the various health plans in their local communities––particularly over provider access, which will be the only major product differentiator between health insurance companies." Bob Laszewski on his blog.

Music recommendations interlude: Wilco, "Handshake Drugs."

Top opinion

AARON: Ignore the debt ceiling. "Failure to raise the debt will force the president to break a law — the only question is which one. The Constitution requires the president to spend what Congress has instructed him to spend, to raise only those taxes Congress has authorized him to impose and to borrow no more than Congress authorizes. If President Obama spends what the law orders him to spend and collects the taxes Congress has authorized him to collect, then he must borrow more than Congress has authorized him to borrow. If the debt ceiling is not raised, he will have to violate one of these constitutional imperatives. Which should he choose?...Professors Neil H. Buchanan and Michael C. Dorf, who parsed the arguments in the Columbia Law Review in 2012, concluded that all options were bad, but that disregarding the debt ceiling was least bad from a legal standpoint." Henry J. Aaron in The New York Times.

KRUGMAN: Rebels without a clue. "This may be the way the world ends — not with a bang but with a temper tantrum...Ironically, considering who got us into our economic mess, the most plausible answer is that Wall Street will come to the rescue — that the big money will tell Republican leaders that they have to put an end to the nonsense." Paul Krugman in The New York Times.

LUCE: Republicans' lost cause. "There is no need to watch Gone with the Wind to grasp the American south’s taste for lost causes. Just watch Congress...[A]s Obamacare’s socialist, secular machine gradually mows down what remains of civil society, diehards can comfort themselves they were brave enough to lie in its path. It will be a glorious defeat." Edward Luce in The Financial Times.

SAMUELSON: The spoils society. "[F]or the nation, the relevant question is whether productive behavior (generating economic growth) is losing ground to predatory behavior (grabbing existing wealth and income). There are good reasons to think it is...The smaller the gains, the more people will fight over existing income and wealth, because — as has been said — that’s where the money is" Robert J. Samuelson in The Washington Post.

Late-night comedy interlude: SNL takes on Obamacare, Ted Cruz, and Breaking Bad.

2) Can David Vitter stop the shutdown?

Boehner's newest backup. "Behind the scenes, Speaker John Boehner and his allies are finalizing their strategy for the eleventh hour: a last-minute CR play. Here’s how it could unfold, according to sources familiar with the leadership’s closed-door deliberations...The leadership is mulling several options. At the top of the list is a revised CR that includes the Vitter amendment, authored by Senator David Vitter (R., La.), which would eliminate Obamacare subsidies for congressional staffers and members." Robert Costa in National Review Online.

U.S. government nears shutdown. "The U.S. government moved to within hours of its first shutdown since 1996, as House Republicans redoubled their drive early Sunday to delay the new health care law and Senate Democrats stood firm against changing the law as a condition of funding federal departments. The standoff left little prospect that Congress could reach agreement on terms for funding the government by midnight Monday, when the current fiscal year expires. A shutdown would leave essential services operating but prompt federal agencies to suspend many functions and furlough hundreds of thousands of workers." Janet Hook, Kristina Peterson, and Siobhan Hughes in The Wall Street Journal.

...And nobody is doing anything about it. "Unlike other budget crises of the past three years, this one was unfolding in slow motion. The halls of the Capitol were dark Sunday. There were no negotiations, and neither the House nor the Senate was in session...Senators are hardly rushing back to Washington. They are not due at the Capitol until lunchtime Monday, when Reid will move to table the House amendments. That exercise requires a simple majority and can be accomplished solely with Democratic votes." Lori Montgomery and David A. Fahrenthold in The Washington Post.

House passes its continuing resolution. "House Republicans forced through a short-term government funding bill that delays Obamacare and permanently repeals a tax on medical devices, setting up their most dramatic face-off ever with President Barack Obama and Senate Democrats. The vote to delay Obamacare was 231-192, with two Republicans voting against the bill, while two Democrats supported it...The House also passed a bill to fund U.S. troops in case of a shutdown. The chamber further adopted a “conscience clause” that postpones until 2015 an Obamacare requirement that employers cover birth control as part of their health-insurance packages. Their funding resolution keeps government open until Dec. 15 at a level of $986 billion." John Bresnahan and Jake Sherman in Politico.

Economists collectively headdesk in reaction to U.S. budget policy. "A prolonged government shutdown — followed by a potential default on the federal debt — would have economic ripple effects far beyond Washington, upending financial markets, sending the unemployment rate higher and slowing already tepid growth, according to a wide range of economists. A shutdown of a few days might do little damage, but economists, lawmakers and analysts are increasingly bracing for a shutdown that could last a week or more, given the distance between Republicans and Democrats. Such an outcome would suck money out of the economy and spread anxiety among consumers and businesses in a way that is likely to hold back economic activity." Zachary A. Goldfarb in The Washington Post.

...Here's how the shutdown and standoff hurts the economy. "One barometer of risk tied to U.S. government debt has surged. Despite few signs of distress in the stock market, economists warn that months of rolling brinkmanship will cloud the outlook even without a government default...[C]onfidence among U.S. consumers fell to a five-month low this month, according to a gauge by the University of Michigan released Friday. Business confidence has dipped as well. A survey by the Business Roundtable, a trade group for big-company CEOs, found half of top executives said the budget fights were crimping their hiring plans." Brenda Cronin and Sudeep Reddy in The Wall Street Journal.

...Chances are Wall Street won't like shutdown risk or default risk. "[T]he current battle — and the looming threat of a government shutdown on Tuesday — is beginning to cause greater unease than past political disputes and may rattle markets when they reopen on Monday. In trading in Asia early Monday, the markets were down, with the Nikkei index of Japanese stocks around 2 percent lower." Nathaniel Popper in The New York Times.

Federal agencies put forward contingency plans for increasingly-certain shutdown. "Senior Pentagon officials said on Friday that the more than 1.3 million active military personnel would remain on duty during a shutdown but would probably not receive their paychecks until a spending agreement was reached...About half of the Defense Department’s approximately 800,000 civilian employees would be furloughed without pay.The Department of Homeland Security, which comprises organizations like the Secret Service, Customs and Border Protection and the Federal Emergency Management Agency, would have to furlough roughly 14 percent of its employees, far lower than many other cabinet-level agencies." Michael S. Schmidt, Thom Shanker, Andrew Simmons in The New York Times.

‘Shame on us’: How businesses brought the debt limit mess onto themselves. "'We have a higher duty of care to engage this issue. It is grossly reckless to watch the long term business trajectory of the U.S. to be at such risk. And we are part of the pathology that got us here. We've all had our K Street lobbyists who are part of the problem...The business community is fundamentally pragmatic. There's a sense of, 'can't we get in a room and just fix this thing.' Now, the problem with that is that CEOs are kind of naive.'" Lydia DePillis in The Washington Post.

Government shutdown: GOP tries to counter narrative. "With time running out before the government closes for the first time since 1996, congressional Republicans are rallying around the same message: A shutdown won’t be our fault. It was preemptive damage control as the GOP tried to counter the narrative that the House essentially voted early Sunday to close the federal government when they amended a Senate-passed continuing resolution to include several Obamacare-related provisions. Sen. Ted Cruz said it is Senate Majority Leader Harry Reid who is being obstructionist for refusing to advance the House legislation." Ginger Gibson and Seung Min Kim in Politico.

Obama and Paul Ryan have chosen to stay invisible in this budget clash. "Each is the architect of his party's budget priorities, yet both President Barack Obama and Republican Rep. Paul Ryan have largely removed themselves from talks in Washington's latest standoff for reasons that help explain why the country has moved to the brink of a government shutdown...For the moment, though, beyond public statements, Mr. Obama has played no inside role in the unfolding drama. And Mr. Ryan has been almost entirely silent...Mr. Ryan, meanwhile, has seemed uncomfortable with a tactic of stripping funding from the health law. He has been quietly telling fellow Republicans to pick their battles." Peter Nicholas and Damian Paletta in The Wall Street Journal.

All ridiculous prohibitions come to an end interlude: You will soon be allowed to use electronic devices on a plane in all phases of flight.

3) Justice Dept. goes all-in against North Carolina

The Justice Department will sue North Carolina over voting law, and they're going after everything. "The Justice Department will sue North Carolina on Monday over the state’s new voting law, according to a person briefed on the department’s plans, the latest move by the Obama administration to counter a U.S. Supreme Court ruling that officials have said threatens the voting rights of minorities...Justice will challenge four provisions of North Carolina’s voting law, according to the person briefed on the plans. They include the strict voter-ID requirements, which critics say do not provide adequate protection for voters who lack the required ID. The suit will also challenge the elimination of the first seven days of early voting, the elimination of same-day voter registration during the early-voting period and the prohibition on counting provisional ballots cast by voters in their home county but outside their home voting precinct. The department will also ask that North Carolina again be required to get clearance in advance of any changes to its voting laws." Holly Yeager in The Washington Post.

Fight is on over efforts to tighten voting rules; critics see it as a violation of Voting Rights Act. "Emboldened by the Supreme Court decision that struck down part of the Voting Rights Act, a growing number of Republican-led states are moving aggressively to tighten voting rules. Lawsuits by the Obama administration and voting rights activists say those efforts disproportionately affect minorities. At least five Southern states, no longer required to ask Washington’s permission before changing election procedures, are adopting voter-identification laws or toughening existing requirements." Michael J. Mishak in The Washington Post.

NYT does great documentaries interlude: "Hers to Lose," about the final days of Christine Quinn's ill-fated run for mayor of NYC.

4) The Janet Yellen rollout begins

What Would Janet Yellen Do? "Her record gives a clear idea of the policies she would pursue as chair. That history shows she is not the simplistic monetary policy “dove” that Wall Street sometimes imagines. Rather it shows one of the Fed’s shrewder analysts of the economy, a fierce defender of its dual mandate on unemployment and inflation, and a consistent advocate for greater transparency and communication...When the crisis did come, Ms Yellen’s response reflected a thread that runs through her Fed career: conviction that the central bank can and should try to stabilise the real economy – in particular, unemployment – as well as just inflation." Robin Harding in The Financial Times.

This is not your father's economy, and it's really much harder for young people than it once was. "The on-ramp to adulthood is delayed and harder to reach for young people today, a reality that is changing the country's society and economy, according to a new report. More demanding job requirements, coupled with the pressures of the recession, have delayed the transition to adulthood for young people in the past decade and earned them the title of "the new lost generation," according to the report from the Georgetown University Center on Education and the Workforce, published Monday...Through analyzing about three decades of census data—from 1980 to 2012—the study found that on average, young workers are now 30 years old when they first earn a median-wage income of about $42,000, a marker of financial independence, up from 26 years old in 1980." Caroline Porter in The Wall Street Journal.

Explainer: Economic data coming your way this weekAmrita Jayakumar in The Washington Post.

In one of the most surprising economic stories Wonkbook has read all year, apparently the U.S. textile industry is making a comeback. "The American textile and apparel industries, like manufacturing as a whole, are experiencing a nascent turnaround as apparel and textile companies demand higher quality, more reliable scheduling and fewer safety problems than they encounter overseas. Accidents like the factory collapse in Bangladesh earlier this year, which killed more than 1,000 workers, have reinforced the push for domestic production. But because the industries were decimated over the last two decades — 77 percent of the American work force has been lost since 1990 as companies moved jobs abroad — manufacturers are now scrambling to find workers to fill the specialized jobs that have not been taken over by machines. Wages for cut-and-sew jobs, the core of the apparel industry’s remaining work force, have been rising fast — increasing 13.2 percent on an inflation-adjusted basis from 2007 to 2012." Stephanie Clifford in The New York Times.

Mother Earth interlude: You have to see this amazing film on glaciers.

5) Are gun accidents way more common than we think?

The hidden toll of guns on children. "Children shot accidentally — usually by other children — are collateral casualties of the accessibility of guns in America, their deaths all the more devastating for being eminently preventable...A New York Times review of hundreds of child firearm deaths found that accidental shootings occurred roughly twice as often as the records indicate, because of idiosyncrasies in how such deaths are classified by the authorities...As a result, scores of accidental killings are not reflected in the official statistics that have framed the debate over how to protect children from guns." Michael Luo and Mike McIntire in The New York Times.

Reading material interlude: The worst sentence we read today.

Wonkblog Roundup

SNL takes on Obamacare, Ted Cruz, and Breaking Bad. Ezra Klein.

‘Shame on us’: How businesses brought the debt limit mess onto themselves. Lydia DePillis. 

Et Cetera

Your Monday-morning longread: Inside the nation's biggest experiment with school choiceStephanie Banchero in The Wall Street Journal.

The important story you'd have otherwise missed: Leak of al-Qaeda plot undermined U.S. intelEric Schmitt and Michael S. Schmidt in The New York Times.

Lawyers Olson and Boies want Virginia as same-sex marriage test caseRobert Barnes in The Washington Post.

As Congress fights over the budget, agencies go on their ‘use it or lose it’ shopping spreesDavid A. Fahrenthold in The Washington Post.

Republicans and Democrats are treating the 2012 election like a mandate. They’re both wrongJohn Sides in The Washington Post.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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Ezra Klein | September 29, 2013