Obama Tries Speeches to Avert ObamaCare 'Trainwreck'

In less than 5 months, major provisions of ObamaCare will come into effect. Yet, according to a recent poll, 40% of Americans don't know the law is still on the books. These Americans believe the law was repealed or struck down by the courts. Only 35% of Americans have a favorable view of the sweeping law. These numbers set the stage for a massive PR disaster for Democrats ahead of next year's midterm elections.

On October 1st, health insurance exchanges, the centerpiece of ObamaCare are set to open to the public. Through these exchanges, Americans will theoretically be able to compare available insurance options and purchase coverage. Americans who do not have coverage on January 1st will face tax penalties.

Architects of ObamaCare envisioned each state creating and managing its own exchange. More than half the states have declined to do so and another handful are only doing it in "partnership" with the federal government. HHS will be left to manage a federal exchange and exchanges in dozens of states. 

Even in individual states like Colorado, who have taken a lead in setting up its own exchange, the process has stumbled. The state has already spent $61 million setting up its exchange, but is asking the federal government for another $125 million to complete its work. The state's exchange, Connect Health Colorado, estimates that 90% of state residents don't know the exchange exists. 

Extrapolate this across the nation and describing ObamaCare as a 'trainwreck' may be an understatement. 

Even if the exchanges get up and running by October, a far more serious challenge looms. Consumers are likely to find that insurance coverage is not as affordable as advertised. A number of insurance providers are looking for significant rate hikes this summer in advance of ObamaCare's new coverage and benefit mandates.

The secret in ObamaCare is that insurance coverage is affordable only to the extent that people who don't need it purchase it. Young people and children consume relatively little health care and the services they do consume are generally inexpensive. Their insurance premiums are critical to cover the costs of older and sick consumers. Without a pool of healthy consumers, premiums for other Americans would skyrocket. 

Convincing the young and healthy to purchase health insurance may be difficult. Obama and HHS have announced a major publicity tour and campaign-style events and speeches to pitch coverage. Building a general awareness about an issue isn't enough in the face of economic reality. 

For many consumers, it simply won't make economic sense to purchase health insurance. The costs of coverage will be far more than the benefits they would receive, and even more than the individual tax penalties. For many single adults, paying hundreds of dollars a month in premiums isn't possible. Without these premium dollars, however, insurance for other Americans will be far more expensive. Young adults must necessarily buy more coverage than they otherwise need to ensure their surplus premiums can underwrite coverage for others. 

Obama is a talented pitchman on the campaign trail. His Administration will spend tens of millions to advertise the exchanges and promote coverage. Activist groups will aggressively engage the public. 

The challenge, however, is that the basic structure of ObamaCare is inherently flawed. The best PR campaign in the world can't fix that.

Follow Mike Flynn on twitter: @Flynn1776


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