Deep inside the White House, in a bare room that the chief of staff uses for meetings, David Simas is still thinking about turnout.
Many doubted the Obama campaign’s contention that it could recapture the 2008 electorate. Simas’s data, however, convinced the campaign that was possible. And when the smoke cleared, young voters and minorities did show up to the polls, and Obama won.
Now Simas, a sad-eyed Massachusetts native with a facility for PowerPoints, needs to reach those same groups again — with a much harder ask. This time, he doesn’t just need them to vote. He needs them to buy health insurance, and, in some cases, spend hundreds of dollars a month for it. If they don’t, the new insurance marketplaces -- the absolute core of Obamacare -- will be filled with older, sicker people, and premiums will skyrocket. And if that happens, the law will fail.
The debate over Obamacare often focuses on the law’s complexity. Senate Minority Leader Mitch McConnell (R-Ky.) has taken to pushing around a seven-foot stack of paper showing the tens of thousands of pages of regulations it has spawned. Senate Finance Chairman Max Baucus (D-Mont.) has warned that implementing such an intricate statute could be a “train wreck.”
But to the White House, the difference between success and failure is straightforward: They need to entice a sufficient number of young and healthy adults into the new insurance marketplaces that open Oct. 1.
How many younger people are needed each year to hold down premiums depends on how many people sign up for the marketplaces. If the total this year is 7 million people, then about 2.7 million need to be in the 18-to-35 set.
This, then, is the crux of Obamacare’s challenge: Can the federal government persuade young, healthy people to buy health insurance?
Simas is focusing his formidable analytical resources on understanding this group. He begins clicking through a Powerpoint that holds reams of data on these young adults. “What do we know about them?” he says. “They’re overwhelmingly male.” Click. “They’re majority nonwhite.” Click. “One out of every three lives in California, Florida or Texas.” Click. “We have census maps breaking this down into the smallest geographic units.”
A couple more clicks and Simas is showing which television channels they like to watch (Spike TV, among others), which social-media platforms they use (Twitter, Facebook) and who they listen to (“No surprise. It’s mom.”). “We can figure out the message that works best for this group,” Simas says.
The focus on young, minority voters. The heavy reliance on microtargeting. The enthusiasm about nontraditional communications channels. The analytics-rich modeling. It sounds like the Obama campaign. And administration officials don’t shy away from the comparison.
“When I hear the conventional wisdom about Obamacare,” said Jeanne Lambrew, deputy assistant to the president for health policy, “this is the difference between the Karl Roves who put their fingers to the wind and the Nate Silvers of the world who looked at the numbers.”
But the effort will have to go far beyond engineering turnout among key demographics. The administration needs to build more insurance marketplaces than they ever expected, and create an unprecedented IT infrastructure that lets the federal government’s computers seamlessly talk to the (often ancient) systems used in state Medicaid offices. They need to fend off repeal efforts from congressional Republicans — like Wednesday’s vote to delay the individual mandate — and somehow work with red-state bureaucracies that want to see Obamacare fail. And they can’t escape the fact that the law, three years after passage, remains stubbornly unpopular.
Amid these challenges, critics say the administration is simply defining success down. “Their job in 2013 is to declare victory in any way possible,” said Doug Holtz-Eakin, president of the conservative American Action Forum. “They’ll keep moving goal posts until they can declare victory.” Holtz-Eakin noted that the administration has recently delayed significant parts of the bill, like the employer mandate. “It’s an admission that the whole thing can’t be implemented,” he said.
Over the course of three months and in dozens of interviews for this article — with Obama administration officials, state-level implementers, outside experts, steadfast critics and others — two distinct and contradictory views emerged: One, of confident Obama administration officials focused on building its marketplaces and ignoring the naysayers in Washington, who they believe simply don’t understand the law. Another, of Obamacare’s increasingly confident critics, who believe the law is collapsing under its own weight and feel themselves more vindicated by the day.
Caught between those two sides are the state-level bureaucrats and technology consultants who have 76 days left to set up the biggest health-coverage expansion in decades.
“In 2011, there was this ‘we’re going to save the world’ mentality,” said Rebecca Pearce, executive director of the Maryland Health Benefit Exchange. “In 2013, it focuses more on 'How do we deliver on the requirements of the law?'”
'Advocates on the ground are really struggling'
It wasn’t supposed to be easy. But expanding coverage to millions of Americans wasn’t supposed to be this hard.
When Obama signed the law in March 2010, legislators envisioned the health-care overhaul as a partnership between state and federal governments. States had served as the primary regulators of insurance markets for decades, so there was widespread expectation they would want to operate the new insurance exchanges, too.
One internal White House memo, drafted by two health policy advisors a few months before the Affordable Care Act, detailed the major hurdles in implementation. It fretted over the law’s tight timelines — which have indeed forced mulitple delays — and the possibility that insurers would hike prices before new regulations took effect. It never mentioned political opposition or widespread state resistance.
The White House never predicted that only 16 states and the District of Columbia would run their own health insurance exchanges, leaving the federal government to set up the majority of marketplaces.
Nor did it foresee the Supreme Court decision allowing states to opt out of the Medicaid expansion, a provision of the Affordable Care Act designed to extend coverage to 17 million Americans, fully half the total number of uninsured expected to be covered by the law. Fewer than half the states have decided to pursue the Medicaid expansion.
The White House figures that the rest of the states will come around soon enough, especially if the law is a success — and the administration expects that the marketplaces will drive that judgment. And so officials obsess over their construction — and anything that might stand in their way.
In recent months, White House has begun delaying high-profile parts of the law that officials believe will interfere with their ability to set up the marketplaces. They put off enforcing a requirement that all large employers provide coverage to full-time workers, and, on the Friday following the Fourth of July, quietly released a 606-page regulation that delayed requirements for the marketplaces to verify workers’ incomes and employment status.
Even the most tuned-in health-care consultants have trouble predicting whether the federal government can get the law off the ground.
“It’s pretty much a black box,” Deloitte’s Cheryl Smith said of the technology that powers the health law. “They tell us, ‘It’s freakishly on schedule.’ They use those exact words. But only the people who work in this can tell you if it's actually running on time.”
In states that refuse the Medicaid expansion, residents whose incomes are above the poverty line ($11,490 for an individual) will still have access to tax credits for purchasing private insurance on the exchanges. Those below the poverty line, however, will not receive help obtaining coverage. That lessens the law’s reach, and creates an unexpected messaging problem: How does the White House tell certain citizens that they earn too little to qualify for any help?
“How do you explain this in a way that seems fair and reasonable, that the higher-income people get help but you don’t?” said Mike Perry, a founding partner at polling firm PerryUndem Research. “Advocates on the ground are really struggling with that group. They want to have a positive message but don’t know what to say.”
Perry and his co-founder, Tresa Undem, have arguably conducted the most extensive research on encouraging insurance enrollment under the law; in April, Undem conducted a briefing for administration officials on how best to reach young Americans.
They have found, overwhelmingly, that Americans are uninformed about the health law — and are deeply skeptical when they learn about it.
When they asked in a recent survey whether a $210 premium was affordable, only 29 percent of likely marketplace enrollees said yes. Then, Undem and Perry phrased the question a bit differently. They told the focus group participants that, with their tax credits, they would save “$1,908 a year compared to what you would pay on your own.”
All of a sudden, 48 percent of the participants thought that insurance was affordable. But 48 percent is still less than half.
'He knows how to get people out'
The Obama administration believes it has four ways to pull people -- both young and old -- into the market. There are the subsidies. There’s the individual mandate. There’s the hoped-for ease and transparency of the new marketplaces. And then there’s the fact that people want health insurance.
Aaron Smith is a 31-year-old who runs the the group Young Invincibles, which advocates for the health-care interests of younger adults. The name is taken from the insurance industry term for young adults who don’t purchase insurance because they’re confident nothing will happen to them. “That term was really insulting to us,” he said.
Polling shows that young adults overwhelmingly want health insurance, and their behavior backs that up. When they’re offered health coverage through their jobs, studies show more than 60 percent take it -- which is similar to the take-up rate among older adults. But young adults are less likely to have jobs that offer affordable insurance. “I think people just dramatically underestimate how hard it is for someone who doesn’t get health insurance at their job to get health insurance,” Smith said.
The result is slightly paradoxical: Young adults are the cheapest group to insure but the group most likely to go without insurance. The reason, put simply, is that young adults are likelier than any other group to be poor. Smith calculates that 19 million young adults between 18 and 34 lack health insurance. Under Obamacare, 8 million of them will qualify for free insurance through Medicaid. An additional 9 million will qualify for subsidized insurance in the exchanges.
In fact, the vast majority of the young adults expected to be in the marketplaces are expected to qualify for subsidies. Linda Blumberg, a health-policy analyst at the nonpartisan Urban Institute, has done extensive work modeling who is likely to sign up for insurance on the exchanges. She estimates that 96 percent of 21- to 27-year-olds will get some income subsidies.
Some young adults won’t find Obamacare a good deal, however. Because the program ends discrimination against the sick, limits it against the old and puts certain quality requirements on insurance, some healthy, young, not-that-poor people in the exchanges will find their premiums rising -- a phenomenon known as “rate shock” in health-policy circles.
That’s why Congress added the individual mandate. Beginning in 2014, anyone who can afford insurance -- which is defined as having access to health coverage that costs less than 8 percent of income -- but chooses to go without it has to pay a fine. The penalty is far less than the cost of insurance: It starts at $95 in 2014, then ramps up to $695 in 2016, or 2.5 percent of income, whichever is greater. That raises the possibility that some might choose to pay the penalty and then simply sign up for insurance at some later date when they get sick.
But the experience in Massachusetts, which structured its overhaul in a similar way, suggests few will choose to pay the penalty. There, rates of uninsurance for young adults have fallen to the low single digits. “The idea of paying a penalty and getting nothing is more distasteful than paying more to get insurance,” said Gary Claxton, director of the Health Care Marketplace project at the Kaiser Family Foundation.
The question is whether Massachusetts offers much of a guide. The state is relatively rich, fairly liberal, and Republicans, Democrats and the business community all worked together to implement the health-care exchanges. There were even ads featuring members of the Boston Red Sox — and nothing like the organized opposition facing Obamacare.
“The zeitgeist was very different,” said Kevin Counihan, who ran Massachusetts’ health law marketing in 2006. “We’re in an environment [now] where 40 percent are against it, 35 percent are for it and neither side knows what’s actually in it.”
That opposition is a wild card to the researchers trying to predict whether the exchanges will succeed. Blumberg and Claxton have both tried to model enrollment in the marketplace and found the exchanges should be relatively successful, lowering average premiums and attracting a diverse group of insurance buyers. But they’re cautious, as they worry that the controversy around Obamacare may make past consumer behavior a poor guide to the law’s future.
“What’s not in the modeling is the institutions,” Claxton said. “How hard does the insurance department or Medicaid department in a red state make it to implement this?”
This is where Obama officials say their campaign experience -- and their candidate -- gives them an advantage. The profile of the people they’re trying to entice into the exchanges almost perfectly matches the profile of Obama voters. And they are confident they know how to talk to those voters.
“If we were having this debate last year, the pundits would be saying that ‘it’s not clear Obama will get young people out to the polls again, it’s not clear if African Americans will turn out to vote’,” said Nancy-Ann DeParle, the former head of the White House Office of Health Reform and deputy chief of staff to Obama. “Well, guess what? As Barack Obama has repeatedly shown, he knows how to get people out. And I think they will turn out to enroll in health plans just as they did to vote last November.”
'I know it’s hard'
On paper, the marketplace looks like a smooth glidepath to insurance coverage. In practice though, building the technology to power these massive data systems is the health law task where outside observers could most easily see the administration failing.
“Everybody is having sleepless nights given the magnitude of the effort and the short amount of time,” said Kevin Walsh, a senior executive at Xerox working with multiple states on health plan implementation. “It’s like building a bridge from both ends and hoping, in the end, they connect.”
When Walsh wants to explain the administration’s massive challenge, he uses a one-page flowchart that outlines eight steps, six government agencies and the back-end technology involved in getting someone enrolled.
There are three rows of boxes highlighting crucial actions: Information the federal government needs to verify, or a step a consumer must take. The chart is meant to simplify, but it has so many arrows -- pointing up, down, left and right -- it hurts just to look at it.
Behind all those boxes sits perhaps the most difficult and technical task of health reform: The construction of the federal government’s massive data hub, an unprecedented trove of income, citizenship and personal information about millions of Americans. This is the engine that will power federal decisions about who qualifies for which health law programs. If it doesn’t work, neither does the rest of the health care law.
The administration has recently scaled back the hub’s workload for the first year. It won’t help states verify applicants’ claims that they do not receive employer- sponsored insurance, for instance. When a consumer claims to have an income wildly different from what the federal data hub suggests, the marketplace, in most cases, will take the consumer’s word for it.
“I read that as an admission that not all of the components of the hub are working,” said Sara Rosenbaum, a health-policy researcher at George Washington University who supports the law.
Over the course of the year, states across the country have put off parts of the law that they hoped would be ready by October. The inspector general’s office at the Internal Revenue Service warned in mid-July that the federal government may still be testing the system when it opens enrollment, creating “significant delays” in processing applications.
State bureaucrats often lay blame at the federal government for repeatedly changing the requirements.
“Some of the guidance from the federal government is still coming,” Mila Kofman, director of the DC HealthLink, said. “That means we can’t get to our wishlist.”
Hundreds of federal workers are racing to ensure that the hub is ready by Oct. 1. In May, Obama called these employees to congratulate them on work accomplished so far--but also to commiserate.
“I know it’s hard, it’s a lot of work,” he told them. “It’s very rare in the annals of American history where we have to set up something this quick. And let’s face it, it’s not as if the political environment has always been friendly in terms of getting this stuff done.”
'The train is doing a little better'
Obama has already predicted that mistakes will be made in setting up the health law.
“Even if we do everything perfectly, there will still be glitches and bumps,” he said at an April press conference. “That’s pretty much true of every government program that’s ever been set up.”
It was certainly true of the federal government’s last major health- insurance expansion, Medicare Part D.
Months before it launched in 2006, Medicare Part D was less popular than today’s Affordable Care Act — 21 percent of the public viewed it favorably while 66 percent did not understand how it would work.
The rollout was a disaster. Some seniors who earned too much to qualify for subsidies received them anyway. Some low-income enrollees who should have received financial aid didn’t. On "Fox News Sunday," then-House Minority Leader John Boehner didn’t mince words. “The implementation of the Medicare plan has been horrendous,” he said.
Today, Medicare Part D has more than 50 million beneficiaries and is extremely popular. In an October survey, over 90 percent of enrollees described themselves as satisfied. “The temporary issues were just that, temporary,” said Mark McClellan, who led Medicare during the rollout. “The memories didn’t last that long. In the end, it comes down to how good the insurance coverage is.”
The administration contends its signature legislative accomplishment is on a similar trajectory. In fact, officials say, it’s already working better than expected. A recent study by Avalere Health found that the premium bids in the marketplaces were coming in below the Congressional Budget Office’s early estimates.
But Medicare Part D didn’t face the kind of sustained political opposition that Obamacare faces. In 2006, the Senate Special Committee on Aging held a hearing on the then-flailing program. Rather than calling for repeal, Sen. Herb Kohl of Wisconsin, then the top Democrat on the panel, said it was important “to put aside any partisan thoughts to work together to get this program running.”
Obamacare doesn’t have that luxury. McConnell has already promised to make it “the biggest issue” of the 2014 midterm elections. There is little chance the Obama administration will be able to tweak or change the legislation if problems emerge. Rather, if the law stumbles, Republicans will use its troubles to gain seats in Congress and chip away at its core provisions.
Even so, Democrats are feeling calmer as the administration clarifies its plans.
“I think the train is doing a little better,” Baucus said. “There’s been no crash. I don’t think it’s derailed. We’re still chugging along here.”
Of course, Baucus doesn’t have to worry about the political fallout: Shortly after his “train wreck” comments, the six-term senator announced his plans to retire in 2014.