The Corner

Covered California Doesn’t Prove O’Care Workable

We know that the rollout of Obamacare’s HealthCare.gov was, and still is, an epic failure. In fact, the failure is so big and public that it has managed to shake the majority of American’s faith in the government’s ability to manage the nation. At least for now. Of course, not everyone agrees. In fact there are plenty of people still arguing that the rollout tells us very little about the law itself. This weekend, for instance, Paul Krugman of the New York Times made the case that California provides us with plenty of evidence that the law can work when it is not paralyzed by the incompetence of project managers and their inability to produce a functioning website. He writes:

California is, however, an especially useful test case. First of all, it’s huge: if a system can work for 38 million people, it can work for America as a whole. Also, it’s hard to argue that California has had any special advantages other than that of having a government that actually wants to help the uninsured. When Massachusetts put Romneycare into effect, it already had a relatively low number of uninsured residents. California, however, came into health reform with 22 percent of its nonelderly population uninsured, compared with a national average of 18 percent.

Finally, the California authorities have been especially forthcoming with data tracking the progress of enrollment. And the numbers are increasingly encouraging.

For one thing, enrollment is surging. At this point, more than 10,000 applications are being completed per day, putting the state well on track to meet its overall targets for 2014 coverage. Just imagine, by the way, how different press coverage would be right now if Obama officials had produced a comparable success, and around 100,000 people a day were signing up nationwide.

Equally important is the information on who is enrolling. To work as planned, health reform has to produce a balanced risk pool — that is, it must sign up young, healthy Americans as well as their older, less healthy compatriots. And so far, so good: in October, 22.5 percent of California enrollees were between the ages of 18 and 34, slightly above that group’s share of the population.

What we have in California, then, is a proof of concept. Yes, Obamacare is workable — in fact, done right, it works just fine.

Over at his blog, health-care consultant Bob Laszewski is puzzled by the “gushing over the progress Covered California is making leading the nation in signing up people for Obamacare.” He looks at the numbers and puts them in perspective. He finds that California could be on track to increase – that’s right, increase — the number of uninsured in the state:

So, let’s summarize:

  • California has 5.3 million uninsured eligible to buy in the exchange with half estimated to be subsidy eligible.
  • California is cancelling another 1.1 million people of which Covered California has estimated 510,000 qualify for a subsidy they can only get if they go to Covered California. At least 80% need to act by December 23 to avoid losing their coverage.
  • The state is spending $250 million in federal money to get people signed up––dramatically more than any other state.
  • The Covered California goal is to sign-up 500,000 to 700,000 subsidy eligible people by March 31.

Why should we be so impressed with Covered California because they have signed-up 80,000 people so far? Or, even that their goal is to sign-up 500,000 to 700,000 of the state’s 6.4 million people––half subsidy eligible––who are uninsured or having their insurance canceled?

Looking at these numbers, if they don’t have well more than 500,000 people signed up by December 31, I would have to think the number of uninsured in California would have grown.

Doesn’t sound too great to me. However, Krugman is right that California could be a good example of what will happen to the country as a whole: We may end up with more uninsured people than we started with.

The whole thing is here.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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