The Art of Managing Obamacare Expectations

by Reihan Salam

On October 15th, Sylvia Burwell, President Obama’s Secretary of Heath and Human Services, set 10 million exchange enrollees as her goal for 2016. She explained that though hitting this target would be difficult, she and her team were committed “to working smarter to reach it.” I love teamwork as much as the next person, but there’s something more than a little odd about this goal of 10 million. As Brian Blase of the Mercatus Center explains, as recently as four months ago, the Congressional Budget Office projected that there would be 20 million exchange enrollees in the coming year. And this estimate of 20 million was revised downward from an earlier 2012 estimate of 23 million for 2016. One of the experts Blase cites, Charles Gaba, projects that the exchanges will have 12.2 million enrollees by the end of 2016, and one assumes that Burwell is lowballing: it is far better to set 10 million as your goal and hit 12.2 million than to acknowledge that the Obama administration is now shooting for roughly half the exchange enrollees the CBO projected back in June of this year. 

What exactly is going on? Essentially, Obamacare exchange plans are a good deal for the sick and the relatively poor and a very bad deal for the healthy and the better-off. We should protect the interests of the sick and the poor. But a far better approach would be to provide a safety net for those too sick and too poor to find affordable coverage while leaving others to buy the insurance plans that best meet their needs, a subject I’ll write about at greater length here at NRO. The trouble with Obamacare is that, for now, at least, it takes the opposite approach: it requires everyone to buy tightly-regulated, expensive plans, yet its premium subsidies aren’t generous enough to make these plans affordable for households earning more than, say, 250 percent of the federal poverty level. The only way to get middle-income people to buy private insurance plans that don’t serve their economic interests is to coerce them. So far, the Obama administration has been reluctant to jack up penalties to such an extent that the middle-class uninsured have no choice but to sign up for exchange coverage, presumably because they fear the political consequences. One way or another, Obamacare is not going to survive in its current form.

The Corner

The one and only.