Guess What? There's No Plan B If ObamaCare Falls Apart
The administration appears to be in full panic mode, making rash, 11th hour decisions without considering the consequences. Last week's executive decision to to release the previously insured from the rules of Obamacare, being a prime example.
Meghan McCardle wrote in her viral post that ObamaCare has initiated its self-destruct sequence:
As Avik Roy points out, catastrophic plans aren’t that much cheaper than the so-called bronze plans. They’re also not eligible for subsidies. This is unlikely to be much help to folks who lost insurance; all it does is introduce some much-unneeded complexity to Healthcare.gov.
As Aaron Carroll points out, insurers calculated their premiums for this year on the expectation that the relatively healthy folks who were already buying insurance would be buying policies on the exchange. The insurers are not happy about this latest change, and Carroll predicts that they will ask the administration to push more money to them through the “risk corridors.” I think he’s right.
As Ezra Klein points out, this seriously undermines the political viability of the individual mandate: “But this puts the administration on some very difficult-to-defend ground. Normally, the individual mandate applies to anyone who can purchase qualifying insurance for less than 8 percent of their income. Either that threshold is right or it's wrong. But it's hard to argue that it's right for the currently uninsured but wrong for people whose plans were canceled … Put more simply, Republicans will immediately begin calling for the uninsured to get this same exemption. What will the Obama administration say in response? Why are people whose plans were canceled more deserving of help than people who couldn't afford a plan in the first place?”
And AJ Strata points out:
Legally, Obamacare just became a litigator’s dream! Why some and not others? Why the insured and not the uninsured? Heck, why individuals and not small companies? We small companies have been nailed by the cost of ObamaCare – can I now get my old plan back due to financial “hardship”? The lawsuit possibilities are endless – and highly lucrative. The need to limit legal exposure in the health care arena will come front and center for quickly.
The Weekly Standard posts another insightful item, because many people DO consider the implications of an act before taking it and can predict what could easily happen:
In addition, what’s to stop those with canceled policies who fought their way through healthcare.gov from now changing their mind and dropping their plans in light of the administration’s announcement? These families would need only to file a form indicating that the premiums they were facing in the exchanges are unaffordable. As matters stand, the administration would have no basis for denying an exemption to such households.
The upshot is that the administration has voluntarily opened another very big escape route out of Obamacare, and the most likely escapees will be young and healthy Americans who don’t want to pay high premiums for Obamacare’s expensive benefit plans.
As Arnold Kling noted: “Obama Repeals Obamacare.”
Meanwhile, about 70% of enrollees on the state and federal exchanges are for Medicaid.
With Obamacare, the Congressional Budget Office projects that federal spending on Medicaid will more than double over the next 10 years.
Medicaid, traditionally, is paid for with both federal and state dollars. Expanding Medicaid will cost states plenty—it is not “free,” writes Heritage scholar Drew Gonshorowski.
For many states, paying for Medicaid will mean one of two things (or some of both): 1) cutting funding for other items like education or transportation, or 2) increasing taxes.
Let's not forget number 3) the federal government will be able to back-bill peoples' estates after they die to pay for their Medicaid expenses.
Given this precarious state of affairs, you might wonder what the Regime's plan B is in case the whole thing falls apart.
Turns out there is no plan B.
Last Wednesday Jason Furman, chairman of the Council of Economic Advisers, joined the Washington think tank Third Way for a wide-ranging discussion. Near the end of the session, Third Way scholar Bill Schneider brought up Obamacare. "Does the administration have any kind of backup plan — if not enough young healthy people sign up for the Affordable Care Act, what's going to happen?" Schneider asked. Noting that he teaches college classes, and his students don't seem particularly well-informed about Obamacare, Schneider continued, "What are you going to do if they don't sign up in large numbers? The numbers don't look that good for young healthy people."
Thurman's response was not particularly encouraging for the administration. "We actually don't have a great demographic breakdown," he said, "but what we do know is that there was a big increase in enrollment in November relative to October, and we've seen increasing demand in December, although we don't have the final numbers and we don't have the demographic breakdown."
Furman continued: "We're obviously making — it's not a Plan B — Plan A is to do the most aggressive enrollment efforts you can, with young people, using social media.
Pajama boy is their Plan A, you guys.