In her now infamous gaffe, then-Speaker of the House Nancy Pelosi told us – “We’ll have to pass it to find out what’s in the bill.”
Although there have been hints at the shadow it will cast over everyday life, the first real testable event will occur next Tuesday when the state exchanges will be open for business in support of the individual mandate. What I would like to do here is to forget the moralistic debate over whether or not universal health assurance is a good idea, and examine whether or not it is, as enacted, workable.
The financing of the program comes from two main sources, a $50-billion-dollar-a-year transfer from Medicare to ObamaCare (for ten years) and a wealth transfer from young to old as young people must purchase coverage they don’t need to pay for old people’s coverage they can’t afford. The first stream has yet to kick-in as politicians have a hard time taking $50 billion away from seniors, who vote in greater proportion than any other demographic. So that part of the bill isn’t working and ObamaCare isn’t being funded as written. In fairness, it’s only been a couple of years and that may well yet happen, but at very least, ObamaCare is significantly underfunded at this point because of the lack of political will of politicians to obey the law they passed. I said at the time that no politician would vote to take $50 billion away form seniors.
The second stream is about to be tested. As the individual mandate kicks-in, we will see if the young are willing to pay for the elderly. Take, for example, a 27 year old who is no longer eligible for coverage under his parents’ policy. He will have the choice of buying coverage from an exchange for from $2,009.28 a year (minimum coverage) to $3,054.24 a year (“Gold” coverage), or pay a once-a-year tax of $95 if not covered by tax time. Which option do you think will appeal more to a rational young person? If they need medical care while not covered, they go to the hospital and acquire insurance then (insurers can’t turn anyone down for pre-existing conditions). It’s a no-brainer.
Regarding the exchanges themselves, only 16 states have set up exchanges, and the federal government hasn’t set up exchanges in other 34 yet. So, the law will come into affect with only 16 states able to comply. The online sign-up isn’t ready, so enrollees will have to enroll by phone for the time being. Can you say “2-hour hold”? The software that is to operate the data hub (that goes out and gets whatever personal information the exchange needs to verify your eligibility for the coverage you choose) isn’t ready yet, and will not have enough time to run exhaustive security checks before it’s pressed into use. The “navigators”, phone operators that help people wander around inside ObamaCare trying to figure out what they can and cannot do, are just now being hired (with only six states mandating background checks), and will be, by definition, lightly trained by Tuesday. I look for massive identity theft and misuse of personal information.
There are some unintended consequences of the employer mandate that are showing potential to do social harm. There are 315 companies that have laid workers off, siting ObamaCare as the reason, thus demonstrating a real negative effect on general employment. This means that even after recovery, the systemic unemployed will be higher than before ObamaCare, we just don’t know by how much yet. Also, many employers are moving what employees they can from full-time to part-time, lowering the standard of living for those employees. That’s a negative social effect in and of itself, but the details of the full-time/part-time migration has another embedded problem. To keep companies from cutting the workday by just an hour in order to classify a worker as part-time, the law stipulated that anyone who worked thirty hours a week would be, for the purposes of the Affordable Care Act, considered as full-time. Business has said “OK” and began limiting as many workers as possible to 29 hours. Unions have rebelled against what it calls a “set-by-government workweek of 30 hours” instead of the 40-hour workweek that unions fought to establish. They say this will weaken the middle class as wage earners work fewer hours than before. People who know me, know that I agree with very little unions have to say, but in this instance, their case is based on empirical evidence. The general workforce is weakened and impoverished by the consequences of the way the law is written. These situations don’t directly relate to the workability of the law as written, but may do so indirectly if the public blames the law for the consequences, rendering ObamaCare politically unworkable.
As a sidebar, the IRS, who hasn’t even begun enforcing anything yet, announced that it has misplaced $162 million of ObamaCare money. Just lost it. I think we can all agree that the federal government can lose $160 million with one hand tied behind its back, what makes this particularly troublesome are two things: The IRS is an accounting house, keeping track of monies received and spent is what it does, and; these guys are going to have the responsibility of disseminating our sensitive personal financial information onto the data hub, based upon request of anonymous exchange operators. This will all be done using just-finished, lightly-tested software. Shuttling our information around is the beta test. What could go wrong?
 The political definition of “gaffe” is when a politician inadvertently tells the truth.
NOTE: Title illustration by Gary Varvel.