Obamacare is imploding. But thanks to the government shutdown, everyone is talking about the implosion of the GOP instead.
The shutdown drama has distracted from the fact that Obamacare’s debut is worse than many realize — and it threatens the fundamental viability of the law itself. The administration claims the Obamacare online exchanges crashed because the Web site got more than 8 million hits in the first week. Please. You know how many people visit Amazon.com every week? More than 70 million. The difference is: 1.) Amazon seldom crashes, and 2.) on Amazon, people actually buy something.
It appears virtually no one is buying Obamacare. While administration officials brag about how many visitors the site is getting, they refuse to divulge how many people actually signed up. Health and Human Services Secretary Kathleen Sebelius was asked that directly by Jon Stewart on “The Daily Show.” “Fully enrolled?” Sebelius stuttered. “I can’t tell you. Because I don’t know.” That is a frightening admission of incompetence. If the Obama administration can’t even track how many people signed up, how on earth is it going to verify whether those people are eligible for subsidies? How will it protect against fraud?
The Post reported this past weekend that the failure of the Web site is worse than previously known: “Even when consumers have been able to sign up, insurers sometimes can’t tell who their new customers are because of a separate set of computer defects.” It turns out that in some 99 percent of applications, the Obamacare site did not provide insurers with enough verifiable information to enroll people in their plans.
Computer experts say the problems with the site are not because of heavy traffic but are the result of structural flaws in system architecture. It is going to take months to rebuild it. That raises a question: If the federal government can’t manage a simple Web site, how on earth is it going to manage the health care of millions of Americans?
It also means that President Obama may have no choice but to delay the individual mandate. As my American Enterprise Institute colleague, Dr. Scott Gottlieb, points out, how can Obama penalize people for not having health insurance if the government’s Web site to provide that insurance doesn’t work?
Without the individual mandate, Obamacare unravels. The only way the law works is if the government forces young, healthy people into it by threatening them with penalties for not carrying health insurance. But if there is no penalty for not signing up, then fewer Americans will sign up.
Even if the administration manages to fix the Web site and finally implement the individual mandate, people still may not join — because the plans being offered are so unattractive. To entice people to join the exchanges, the administration forced insurers to offer low monthly premiums and cover people with preexisting conditions. Insurers have responded by increasing deductibles — the out-of-pocket costs people must pay before insurance benefits kick in — to stratospheric levels.
According to an analysis this weekend by the president’s hometown paper, the Chicago Tribune, “21 of the 22 lowest-priced plans offered on the Illinois health insurance exchange for Cook County have annual deductibles of more than $4,000 for an individual and $8,000 for family coverage. . . . Plans with the least expensive monthly premiums — highlighted by state and federal officials as proof the new law will keep costs low for consumers — have deductibles as high as $6,350 for individuals and $12,700 for families.” Even with federal subsidies, few Americans will bother to buy insurance with a $4,000 to $12,700 deductible — and millions won’t even be eligible for the subsidies.
If enough Americans don’t join the exchanges, Obamacare collapses. According to the Congressional Budget Office, the administration needs at least 7 million people to join the exchanges for Obamacare to be financially viable. While the administration won’t reveal sign-up rates, London’s Daily Mail reported that total sign-ups in the first week were just 51,000 people. If accurate, that would mean they have just 6,949,000 more to go to break even.
Bottom line: It turns out Obamacare is blowing itself up just fine without Republican help. Far from a few “glitches,” the president’s signature program is in free fall after only a week. But instead of focusing on the Obamacare debacle, the news is filled with stories about . . . the government shutdown. The irony is, the shutdown was intended to stop Obamacare. Instead, it is rescuing Obama from his own incompetence.