It’s not often that you’d call government ineptitude a blessing. But that could be the case with ObamaCare.
The feds missed their own deadline late last year for issuing all the rules for states on how their insurance exchanges are to operate. They haven’t yet finished the “data hub” states will need to determine eligibility for benefits.
And the federal government is now scrambling to put together dozens of exchanges in the 25 states that unexpectedly refused to set them up on their own.
Critics of the law should capitalize on the many hiccups befalling the law and prepare a replacement health reform plan of their own that empowers consumers and doctors, not federal bureaucrats, to reduce health care costs and improve quality.
ObamaCare’s insurance exchanges the online “marketplaces” where consumers are supposed to be able to shop for coverage as easily as they purchase plane tickets have been the latest source of frustration for federal officials.
All the exchanges whether state-run, federally run, or as a partnership between the two are supposed to be open for enrollment by this October so that people can sign up for coverage that takes effect on Jan. 1, 2014.
But that deadline looks far too optimistic.
One insurance exchange consultant told trade publication Modern Healthcare last month that states are “tearing their hair out” while still waiting for information they need to launch their exchanges. Kansas insurance commissioner Sandy Praeger said, “If I could wave a magic wand and change (the start) from 2014 to 2015, I would.”
At the same time, states have struggled to build the information technology systems they’ll need to handle all the data ObamaCare will require. And while the federal Department of Health and Human Services (HHS) promises that the 25 insurance exchanges HHS will be running will be ready, not many outside the agency agree.
Oklahoma officials, for example, report seeing little evidence that HHS is building a federal exchange for that state, other than a 25-question survey it sent.
“That’s it so far,” said Julie Cox-Kain, the state’s health department head.
Even if the insurance exchanges launch as planned, they’re not likely to have many fans. That’s because most Americans shopping in them will face huge premium hikes.
State insurance regulators warned the Obama administration late last year that the law’s insurance market rules will dramatically push up premiums for young people. Consequently, many will forego coverage and pay a penalty of $95 or 1% of income, whichever is greater, despite the law’s mandate that they secure it.
A new study by the American Action Forum headed by former Congressional Budget Office director Douglas Holtz-Eakin found premiums for younger individuals could skyrocket up by 190% once the law takes full effect.
But simply counting on bureaucratic ineptitude to temporarily spare the country from ObamaCare isn’t enough.
As American Enterprise Institute scholar James Capretta and Pacific Research Institute senior fellow Jeffrey Anderson recently argued, Republicans need to use the opportunity created by the ongoing insurance exchange train wreck not just to delay implementation of ObamaCare but to “unite behind, and persuasively advance, a credible and practical replacement plan.”
What would such a replacement look like?
A real market for health insurance should be set up not centrally planned “managed competition” of the sort ObamaCare favors.
To start, Congress could end the tax bias against those who purchase individual health insurance.
Right now, the 60% of Americans who get coverage through their employers receive their benefits tax-free. People who buy insurance on their own receive no such benefit.
This system has served to diminish the size of the individual market. As a result, consumers are deprived of not only the tax break in force in the employer market but also the lower prices and enhanced choices that a more competitive market would bring.
The easiest way to end this bias would be to offer tax credits to individuals and families that do not have employer-provided health insurance. Armed with this cash, Americans could shop around in a newly competitive individual market for coverage that suits their needs and budget.
One way or another, it looks as though the implementation of ObamaCare will be delayed. The only question is, what comes next? Critics of the law should be prepared to answer that.