IF PRESIDENT Obama’s apology on Thursday night confused you, you’re probably not alone.
Speaking about people “who may be disadvantaged” because insurance companies are canceling their health-care plans as the Affordable Care Act phases in, the president said, “I am sorry that they, you know, are finding themselves in this situation, based on assurances they got from me.”
Later, Mr. Obama said, “We really believe that ultimately, they’re gonna be better off when they’re buying health care through the marketplaces.”
Then: “But obviously, we didn’t do a good enough job in terms of how we crafted the law. And, you know, that’s something that I regret. That’s something that we’re gonna do everything we can to get fixed. . . .
“We’re looking at a range of options.”
So does the system really need a “fix?” Is it possible that everyone will be better off? No, and no.
The unvarnished truth is that neither president nor Congress can — or should — “fix” the fundamental logic of the new system, which will inevitably result in many people paying less but some people paying more after they transition into a reformed insurance market. As long as implementation troubles don’t do long-term damage, and there isn’t evidence of that yet, the overall structure will be an improvement over what we have today.
Congress and the Obama administration designed reform to move millions of people — those currently insured in the individual insurance market and those currently uninsured — into new insurance markets that would offer affordable, high-quality coverage. For some people, policies will become more expensive, because the government is mandating higher minimum standards (requiring mental health treatment to be included, for example) and because the law doesn’t allow insurance companies to turn away sick people or to jack up prices on older or sicker people. The money to cover those who are sicker or more liable to get sick doesn’t come only from government subsidies— it also comes from people who don’t have high health costs but who are required to buy insurance.
That’s a reasonable way to organize the insurance market. It stays true to the long-sought goal of ensuring that high-quality health insurance is available to all by spreading the costs across a large number of customers paying into a regulated private insurance system. The system depends on those who don’t get sick financing the care of those who do, in return for the assurance that the system will be there for them when they need it.
Greatly offsetting how much healthy people will have to pay for coverage they don’t use, the government will offer subsidies to more than half of the people in the system to help them make their payments. But some young, healthy people will earn too much to qualify for subsidies and will face higher net premiums than they would have previously. Nobody really knows how many will be worse off and for how long, in part because there isn’t firm information on how many people will enter the new marketplaces.
Some administrative fixes to the program may be advisable. But trade-offs were always going to be part of health-care reform. Rather than pretend they can be fixed or waved away, administration officials should explain why they are essential.