Mark McClellan ran Medicare Part D. Here’s his advice for the Obama administration.

November 27, 2013

In the months before Obamacare officially launched, the White House health-care team talked often about everything they were doing to make sure Obamacare didn't become the next Medicare Part D.

Fast forward a few months, and the White House health team is desperately hoping Obamacare becomes the next Medicare Part D.

(Photo by Mike Segar /Reuters)
(Mike Segar /Reuters)

Medicare Part D is the Medicare Prescription Drug Benefit. It was passed by the Bush administration in 2003 and launched in 2006. The launch, to say the least, didn't go well.

Seniors were confused by the new options. Some showed up at pharmacies only to find their benefits didn't work, or the plan they thought they signed up for wasn't the one they got. The initial enrollment push was a disaster, with far fewer seniors signing up than expected. Two months in, then-Majority Leader John Boehner called it "horrendous."

But the law recovered. Today, Medicare Part D is widely considered a success. More than 90 percent of seniors are satisfied with the program. Republicans point to it as a model for their future reforms. Democrats expanded it as part of the Affordable Care Act.

This is exactly what the White House is hoping happens with Obamacare.

I asked Mark McClellan, who led the Centers for Medicare & Medicaid Services during Part D's implementation, whether that was realistic. His answers didn't foretell a pleasant 2014 for the Obama administration. But they suggested that many critics have written the law off far too early.

Even if HealthCare.gov is repaired, McClellan warned that the law's problems aren't anywhere near over. Part D's worst trials came when people actually began attempting to use their insurance. Obamacare hasn't even reached that juncture yet -- and, worryingly, its sign-up process has been more troubled and more disruptive than Part D's.

Come January there will be people who had their plans canceled by Obamacare but didn't or couldn't sign up for new insurance. There will be people who signed up for new insurance but their application got lost in the tubes. Some of these people will be sick, and interruptions to their care will be dangerous -- not to mention widely publicized.

"There's is a 100 percent chance that this will happen to a nontrivial number of people," McClellan, who's now at the Brookings Institution, said. "So the Obama administration needs some kind of plan in place for resolving those cases as rapidly as possible and making sure they get the care they need."

As of now, McClellan said, enrollment data isn't worth much. "It is way too early to draw definitive conclusions about ultimate enrollment numbers or whether it'll be skewed to older, sicker people," he said.

The Medicare Part D experience was that sign-up was slow at the outset and then rocketed upward in the spring of 2006, toward the end of open enrollment. "By that point, every senior had heard about this program or knew people in it. And everyone was familiar with the delayed enrollment penalty. Those things together led to a big bump in enrollment for people who were procrastinating. But they decided to sign up before the end of open enrollment," McClellan said.

The White House has been explicitly comforting itself by looking to the enrollment patterns of Medicare Part D. But McClellan isn't certain they apply. For one thing, there's a real question as to whether the Obama administration will be comfortable aggressively publicizing the individual mandate next year, particularly with so many Democrats up for reelection. If they're not, then it's unlikely they'll see a similar spike in enrollment.

But he also argued that it's necessary to take a longer view than the political system is typically comfortable with. "The administration has several years to get it all running," he said. "Even if there are congressional losses in 2014 that won’t fundamentally change the administration’s commitment to getting this right." It's entirely possible that Obamacare could have a rough 2014 -- and Democrats could have a rough election -- but by 2015, and certainly by 2016, the program is functioning smoothly.

The dynamic that could really play havoc with the Affordable Care Act if insurers begin withdrawing from the program. But that's not happening. "I don’t see any real sign yet that the plans are thinking about getting out in 2014," McClellan said. "I think they signed on with the expectation that there would be a lot of uncertainty through 2014. So there’s some time to work this out."

So what will be the sign that Obamacare is working? Fewer articles like this one, mainly. "The media, bless your heart, tends to focus on the bad news," McClellan said. "That’s the nature of what makes news. You only know your program is successful when it’s out of the headlines for a month or two."

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Neil Irwin · November 27, 2013