Health and Human Services Secretary Kathleen Sebelius, testifying before the House Ways and Means Committee, was asked on Thursday if she could promise no more changes or delays in Obamacare. She replied cryptically. She was also asked how many of the 4.2 million people who purportedly signed up actually paid the required premium to be “enrolled.” She testified, “I can’t tell you that because I don’t know that.” She was 0 for 2 at this point. So she’ll agree to put off the individual mandate for a while, right? Nope. Zero for 3.
But when it came to the rate increase for next year, given the concern that the exchanges have not signed up sufficient numbers of young people, she replied definitively, “I think premiums are likely to go up, but go up at a smaller pace than what we’ve seen since 2010. . . . The increases are far less significant than what they were prior to the Affordable Care Act.” How could she possibly know that if she doesn’t know if the law will change and who is in the plan? (The ones who didn’t pay up may be disproportionately young, increasing the adverse selection problem.) Conservative economist Douglas Holtz-Eakin replied, “Objectively, she cannot know.”
What is more, we do not know whether the risk corridors, the government subsidy to insurance carriers (called the “bailout”), will go into effect, or whether that will be politically toxic, even for (especially for!) Democrats. Even then, the risk corridors pick up initially only 50 percent of carriers’ losses. At that point a bunch of insurance carriers may leave the exchanges, eliminating a significant restraint on costs.
So if Sebelius had been honest, she would have said something like: “Until we know how many people really enrolled and how the mix of old and not so old people turns out, no one can really say what’s going to happen. If the adverse selection problem is acute, the whole thing will come tumbling down. In any case, prepare to endure a firestorm when your political opponents say you’ve messed up their health care and are now sending millions to big insurance companies.”
Her most interesting dodge was in reply to the question as to what “success” would look like. The administration originally set a goal of 7 million. She floated, “Success looks like millions of people with affordable coverage which they will have by the end of March.” Notice she didn’t even say “millions of people who didn’t previously have coverage.” She doesn’t know how many of them there are.
With seriously incomplete data and no meaningful measure of success, how is this supposed to function? I think the secretary said it best: I can’t tell you that because I don’t know that. This is the pinnacle of the liberal welfare state. A historic achievement?