Wonkbook: Will Obamacare make it to 7 million?

December 31, 2013

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(Photo by Andrew Harrer/Bloomberg)

Wonkbook's Number of the Day: 750,000. That's a rough estimate of how many additional people signed up for Obamacare thanks to the one-week delay.

Wonkblog's Graphs of the Year: The latest are from Jason FurmanAlan Greenspan, Sheila Bair, Doug Elmendorf, Peter Orszag, and Peter Thiel

Wonkbook's Top 5 Stories: (1) the 7-million goal; (2) HARP sounding sweeter; (3) unnatural nature, thanks to climate change; (4) you drone it, you own it; and (5) could Ryan-Murray fall apart?

1. Top story: Will Obamacare make it to 7 million?

Obamacare just might net its 7 million sign-ups. "[W]hat seemed impossible in October suddenly became a lot more plausible in late December. This weekend, new enrollment data showed approximately 2 million Americans signed up for private health insurance plans since the start of open enrollment. Health policy experts now see a space to get to 7 million -- although it's by no means a guarantee." Sarah Kliff in The Washington Post.

Health insurers are racing to complete enrollments. "Millions of new insurance policies purchased under the federal health-care law officially take effect on Wednesday, but many enrollees won't be able to use them to visit doctors or get prescriptions filled for days or weeks, insurers say...As of Monday, however, only about half of enrollees billed for plans offered by more than 100 insurers in 17 states had paid their first month's premium." Timothy W. Martin in The Wall Street Journal.

Obamacare delay helped 750,000 enroll in coverage. "If you take President Obama's announcement that 500,000 enrolled through the federal website as of Dec. 20, that means at least an extra half a million people had a chance to sign up in the days after Obama's announcement -- already beyond the original deadline -- through the new one because of the administration delay. In the 15 states running their own Obamacare websites, a rough count of the early numbers indicates that at least 300,000 people enrolled between Dec. 16 and Dec. 24. Put those figures together and more than 750,000 signed up for coverage during the extra week that the administration offered." Dylan Scott in Talking Points Memo.

@sarahkliff: T minus 26 hours until Obamacare. Just enough time to prep your case for the death panel!

Official who led HealthCare.gov rollout steps down. "Michelle Snyder, the chief operating officer of the Centers for Medicare and Medicaid Services, had intended to leave last year after four decades in public service but stayed on to “help me with the challenges facing CMS in 2013,” the agency’s chief, Marilyn Tavenner, wrote in an email to staff on Monday." Jonathan Allen in Politico.

Howard Dean thinks Obamacare doesn't need the individual mandate. "Howard Dean said Monday that the healthcare law didn’t need to include the individual mandate to work and warned it would end up hurting Democrats in the next election. “The individual mandate was not necessary, and it’s probably a big political thing, and that is going to hurt the Democrats because people don’t like to be told what to do by the government, no matter what party they’re in,” Dean said on CNBC...“The truth is, that wasn’t necessary, and the insurance companies like it because it does bring young, healthy people who aren’t likely to get sick into the system,” Dean said." Jonathan Easley in The Hill.

LASZEWSKI: A cause for worry, or celebration? "The long-time underwriting rule is that it takes 70% of an eligible group in order to get a sustainable pool––meaning we need 70% of the 20 million uninsured net of cancellations, or 14 million, for a truly sustainable risk pool...The Democrats have been fond of saying that once HealthCare.gov is working people will be able to go to the site and see for themselves just how attractive Obamacare is. The front-end of the site is now finally working quite well––in contrast to the very serious back-end issues that still remain." Robert Laszewski on his blog.

KRUGMAN: Obamacare, not a total disaster. "[W]hile 7 million has become the number to match or beat, the truth is that it doesn’t matter too much if “only” 6 million sign up via the exchanges, plus millions more who are signed up under expanded Medicaid. Even a slightly disappointing first year will still offer enough people benefits to make reform politically irreversible. At this point, we have more than 2 million signed up via the exchanges and more than 4 million added to Medicaid. Both numbers will grow a lot over the next three months. This is pretty close to the end game." Paul Krugman in The New York Times.

CAPRETTA AND DAYARATNA: Yes, healthcare can be a market. "Many economists believe that health care is inherently different from other industries and cannot operate in a traditional marketplace. They argue that governmental regulation, however unsatisfactorily administered, is better than allowing a dysfunctional marketplace to misallocate resources and create inequities. They are wrong...Multiple studies have found that, with proper incentives and reliable information, Americans treat their health care purchases the way they do other expenditures—searching out the best service at the best price." James C. Capretta and Kevin Dayaratna for the Heritage Foundation.

Music recommendations interlude: Closing out the year with something classy and classical.

Top opinion

BERNSTEIN: Narrowing the income gap. "In our era of historically high levels of income inequality, growth is of course necessary, but it’s not sufficient to lift the living standards of the bottom half. The chart above gives a rough look at the problem, showing the growth over the expansion thus far in G.D.P. (up 10 percent), corporate profits (up 50 percent), the Standard & Poor’s 500-stock index (up 77 percent), and median household income (down 4 percent), all adjusted for inflation." Jared Bernstein in The New York Times.

KONCZAL: In financial regulation, the good guys are winning. "JPMorgan’s failure also gave new energy to, and a clear target for, the stalled Volcker Rule, which was designed to split hedge funds from banks. Financial reform benefitted as well from engaged activism that proposed tougher reforms, which pressured regulators to hit the mark and kept the financial industry on the defensive. This is clearest in the case of capital requirements, which require banks to hold a set percentage of their assets and which the finance industry fights consistently." Mike Konczal in The New Republic. 

SEIB: Obama seeks way to right his ship. "President Barack Obama exits 2013 in the weakest political position of his presidency and now faces a basic strategic choice: Does he try to recover by working with Republicans in Congress, or by confronting them heading into next year's midterm elections? That now leaves it unclear whether Washington is entering a new phase in which the president seeks more compromises with Republicans to move at least part of his agenda through Congress, or whether he instead strikes out on his own by using executive action as a way to advance his program while underscoring his philosophical differences with the GOP on issues such as a higher minimum wage and extended unemployment benefits." Gerald F. Seib in The Wall Street Journal.

MATTHEWS: End the TSA. "Think about all the waste that one stupid government policy can generate. And for what? To save lives? It doesn't. To prevent attacks? It doesn't. All it does is waste time and money. And messenger bag hijinks are just of the tip of that iceberg." Dylan Matthews in The Washington Post.

MALKIEL: Most investors should invest as if markets are efficient. "My recommendation is to rebalance your portfolio. Historically, keeping different asset classes roughly in proportion to the target allocation that seems best considering the investor's age, financial situation and risk tolerance has lessened the volatility of the portfolio and often increased returns." Burton G. Malkiel in The Wall Street Journal.

STEPHENS: Obama's envy problem. "Inequality is not a problem simply because the rich get richer faster than the poor get richer. It's a problem only when the rich get richer at the expense of the poor...As it is, to whom except the envious should it matter that the boss now makes a lot more, provided you, too, also make more?" Bret Stephens in The Wall Street Journal.

List: David Brooks continues with the second round of the Sidney AwardsThe New York Times.

HAUSMANN: The specialization myth. "Cities are the places where people that have specialized in different areas congregate, allowing industries to combine their knowhow. Rich cities are characterized by a more diverse set of skills that support a more diverse and complex set of industries – and thus provide more job opportunities to the different specialists...In the process of development, cities, states, and countries do not specialize; they diversify. They evolve from supporting a few simple industries to sustaining an increasingly diverse set of more complex industries." Ricardo Hausmann in Project Syndicate.

LIPTAK: Laws deserve more than cute names. "For better legal marketing, consider the U.S.A. Patriot Act (for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism), the Dream Act (for Development, Relief and Education for Alien Minors) and the Disclose Act (for Democracy Is Strengthened by Casting Light on Spending in Elections). At first blush, colorful names for bills and statutes can seem innocuous and even amusing. But scholars who have studied them make a persuasive case that they cheapen and distort the legal process." Adam Liptak in The New York Times.

Lists of lists interlude: The best longform of 2013.

2. HARP sounding sweeter than before

Mortgage program pans out. "The government's Home Affordable Refinance Program stands out among the alphabet soup of initiatives rolled out to stem a wave of foreclosures: It is one that is finally living up to its ambitions. Nearly 3 million homeowners, including at least 900,000 who owe more than their mortgages are worth, have been able to refinance their loans under the crisis-era program designed to reach borrowers with little or no equity in their homes. The majority of those loans were refinanced in 2012 and 2013, after the government revamped the program following a disappointing start." Nick Timiraos in The Wall Street Journal.

Pending home sales up slightly. "Contracts to purchase previously owned U.S. homes edged up in November, marking the first increase in six months and providing a hopeful sign the sector has begun to stabilize after its momentum was sapped by rising mortgage rates. The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, rose 0.2 percent from October, to 101.7. But contracts were 1.6 percent below last November's levels."Reuters.

Explainer: 3 big macroeconomic questions for the U.SGavyn Davies in The Financial Times.

In 2013, developed economies took back over growth. "The 2013 performance reflected something of a role reversal among the players. After years of notching far slower growth than many emerging-market counterparts, some leading economies are at last showing strength. The global snapshot also reveals the far-flung effects of monetary policy, as decisions by central bankers in developed nations reverberated through emerging markets." Brenda Cronin in The Wall Street Journal.

Dems pledge new push for unemployment benefits. "Several Democrats said over the weekend that they would keep up their push to extend emergency unemployment benefits in January, including Rep. David Cicilline (D-R.I.), who said he would propose legislation to that effect next week." Pete Kasperowicz in The Hill.

Fed getting it wrong tops list of investor concerns. "The Fed has to gauge its tapering so as not to stall the US recovery, or shock emerging markets...Mohamed El-Erian, chief executive of Pimco, worries about a mishap as central banks switch from “policy-induced growth to higher, durable and more inclusive private sector-led growth . . . In each case – that of the Fed, the European Central Bank and Bank of Japan – the policy transition is complex. It involves changes in an already highly experimental policy mix.”" Ralph Atkins in The Financial Times.

How and why Bitcoin will plummet in price. "[W]e are still in a situation where supply-side arbitrage has not worked its way through the value of Bitcoin. And that is one reason — among others — why I expect the value of Bitcoin to fall — a lot." Tyler Cowen in Marginal Revolution (blog).

Why being the head of the Senate's Finance Committee isn't so grand of a job anymore. "The imminent departure of Max Baucus, Democrat of Montana, from both the Senate and the committee has put a new focus on the panel and the chairmanship, which has declined in stature and influence compared with the vital role it played in the Senate almost from the beginning. Without a shift in the power structure of the Senate, it appears likely the next committee leader will have only a fraction of the clout of those in the past." Carl Hulse in The New York Times.

Something small to ask interlude: Please bring back the real History Channel. Wonkbook used to watch; he no longer does.

3. Unnatural nature

How nature is responding to climate change. "Much of the Florida shoreline was once too cold for the tropical trees called mangroves, but the plants are now spreading northward at a rapid clip, scientists reported Monday. That finding is the latest indication that global warming, though still in its early stages, is already leading to ecological changes so large they can be seen from space...In both the beetle and mangrove cases, scientists have found that it is not the small rise in average temperatures that matters, nor the increase in heat waves. Rather, it is the disappearance of bitter winter nights that once controlled the growth of cold-sensitive organisms." Justin Gillis in The New York Times.

The social cost of carbon is a real thing, the Department of Energy says. "The Obama administration says it will not reconsider a new carbon emissions formula for federal regulations. The conservative group Landmark Legal Foundation filed a petition in August calling on the Department of Energy (DOE) to strike the provision on the "social cost of carbon" from a microwave efficiency rule...Reconsidering the rule would not change the standard adopted for microwave ovens, the department said in an early copy of its response that will be published Tuesday. The social cost of carbon directive, which was updated in June by the Office of Management and Budget, bumped the cost of carbon to $35 per metric ton from $21. The new formula will dramatically increase the projected benefits of regulations that clamp down on air pollution and greenhouse gas emissions." Laura Barron-Lopez in The Hill.

God interlude: Christopher Hitchens's tribute movie.

4. You drone it, you own it

The FAA just approved testing for commercial drones. "Under the six operators chosen by the Federal Aviation Administration, research will be conducted by industry experts and academics on the safe operation of drones, or unmanned aerial vehicles, across a broad array of geographical areas, climates and types of airspace. The work is expected to target everything from federal certification of the safety of commercial drones tothe reliability of air-to-ground communication links to verifying a generation of new, lower-cost sensors designed to avoid midair collisions. The FAA, however, stopped short of committing itself to a specific timetable for permitting widespread use of unmanned commercial aircraft across U.S. skies." Andy Pasztor in The Wall Street Journal.

Ex-NSA chief calls for Obama to reject recommendations. "Retired general Michael Hayden, former director of the National Security Agency and the Central Intelligence Agency, called on President Obama Monday to show "some political courage" and reject many of the recommendations of the commission he appointed to rein in NSA surveillance operations. "President Obama now has the burden of simply doing the right thing," Hayden told USA TODAY's Capital Download. "And I think some of the right things with regard to the commission's recommendations are not the popular things. They may not poll real well right now. They'll poll damn well after the next attack, all right?"" Susan Page in USA Today.

NSA can spy on offline computers wirelessly. "Independent journalist and security expert Jacob Appelbaum on Monday told a hacker conference in Germany that the NSA could turn iPhones into eavesdropping tools and use radar wave devices to harvest electronic information from computer even if they weren't online." CBS.

SANCHEZ: NSA stabs Silicon Valley in the back. "The National Security Agency’s sprawling surveillance architecture has long been enabled by cozy partnerships with private sector technology and telecommunications firms. But the honeymoon may be ending, as the continuing disclosures from Edward Snowden’s trove of classified documents make it increasingly clear how fundamentally opposed the interests of Fort Meade and Silicon Valley really are. By doing their best to prove the paranoid right, NSA is undermining the essential trust on which American tech companies depend." Julian Sanchez in The Daily Beast.

BERGEN: Would NSA surveillance have stopped 9/11 plot? "[I]s it really the case that the U.S. intelligence community didn't have the dots in the lead up to 9/11? Hardly. In fact, the intelligence community provided repeated strategic warning in the summer of 9/11 that al Qaeda was planning a large-scale attacks on American interests...The failure to respond adequately to these warnings was a policy failure by the Bush administration, not an intelligence failure by the U.S. intelligence community." Peter Bergen in CNN.

Science jokes interlude: "They have just found the gene for shyness. They would have found it earlier, but it was hiding behind two other genes."

5. Could Ryan-Murray fall apart?

Younger military veterans are angered by budget cuts to their pension benefits. "After 25 years of service, including combat tours in Afghanistan and Iraq, Lt. Col. Stephen Preston retired from the Army and began collecting a pension of nearly $55,000 a year. The money made it possible for Preston to go back to college, get his MBA and embark on a second career in corporate strategy. So it happened that Preston was sitting in his new office shortly before Christmas when he heard on the radio that he had become the latest target in Washington’s war on spending." Lori Montgomery in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Britain’s chamber of commerce says corporations should share their new prosperity with line workers. Wait, whatLydia DePillis.

Car companies are picking sides between Apple and GoogleLydia DePillis.

Peter Thiel’s Graph of the YearWonkblog.

Jason Furman’s graph of the year: It would be terrible to let unemployment benefits expireWonkblog.

Peter Orszag’s graph of the year: The amazing, indisputable slowdown in health spendingWonkblog.

I flew on a plane without going through security. It was amazing and no one diedDylan Matthews.

Doug Elmendorf’s graph of the year: What’s really driving our deficitsWonkblog.

Sheila Bair’s graph of the year: For many Americans, there’s been no recovery at allWonkblog.

Obamacare just might net its 7 million sign-upsSarah Kliff.

Alan Greenspan’s graph of the year: Businesses are (still) holding back on investmentWonkblog.

Et Cetera

Max Baucus and Dave Camp’s US tax-writing show falls flatJames Politi in The Financial Times.

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

Wonkbook is produced with help from Michelle Williams.

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