Obamacare: What happens if it actually works?

The Primer Device Made Them Bleed From The Ears ... JUST LIKE OBAMACARE!!

The indie film Primer is, perhaps, one of the smartest movies ever made. In it a team of geeky engineers create a device designed to "block gravity"--it winds up blocking time. What happens if it works? Confusion, it turns out:

Coincidentally, this is also the navigation flow-diagram for HealthCare.gov

Slightly--but only slightly--less confusing is the now relevant question: What if Obamacare works?

What Does 'Works' Even Mean?
We've passed the December 1st "deadline" the O-Team set to have the website working for "the vast majority of users." The site is more or less up. John Boehner was able to sign up. The administration is still not releasing numbers on how the back-end Website-to-Insurer link is working and there have been some crashes.

So what does "work" actually mean? Here are some possibilities:

• It can handle the traffic to sign people up and correctly register them for insurance plans.
• Obamacare has the right mix of people--meaning young people--in the risk pool.
• People are able to get good insurance they like for a reasonable cost. By people we mean either (a) Everyone or (b) Almost everyone with the few people paying more mostly being young, healthy, rich, and not paying all that much more.
• The program bends (lowers) the cost-curve of healthcare in the United States.
• Congress gets put on Obamacare. 

Here's the one that The Omnivore actually thinks matters though:

• Its positives are higher than its negatives in polling.

So, Uh, Did It Work?

Let's take a look at each of those points.

Traffic

They say that right now the website can handle 800k people a day with between 30-40k at once (theoretical maximum capacity of 50k). The numbers say the "error rate" (on pages served) is 0.9 percent. That isn't stellar but it also isn't so bad. We don't know yet how the back-end is working: you should call your insurer to see if the file for the policy you think you purchased actually went through.

We should also note that the part of the O-Care website that is supposed to actually take payments isn't even built yet.

Still, if the site does, in fact, work for the vast majority of Americans then, we would say this bullet-point has been hit. Even as the site isn't perfect, the idea that it "will never work" (which has been the 'position' some conservatives have taken--if not literally) is delusional. While there may be setbacks the site, at this time, more or less, can only get better.

The Young Invincibles

Will the healthy young people sign up? Thus far--as of Nov 15th--the answer is no:

In California, the state with the largest uninsured population, most of those who applied were older people with health problems. In Kentucky, nearly 3 of 4 enrollees were over 35. In Washington state, about 23 percent of enrollees were between 18 and 34. And in Ohio, groups helping with enrollment described many of those coming to them as older residents who lost their jobs and health coverage during the recession.

The CBO wants around 38% of the Still, the advertising push has just started and, the model from Romneycare suggests that young people sign up late--but the jury is still out on this.

On the other hand: they say? No death spiral:

"There is essentially no risk of a 'death spiral,'" says MIT economist Jonathan Gruber, who helped design the ACA as well as the Massachusetts law on which it was modeled. "There are substantial risk mitigation mechanisms as well as subsidies that will attract in healthy enrollees." Most important, say Gruber and Zirkelbach, is a section of the ACA under which the federal government will pick up a substantial portion of the losses for the next three years, if the program goes sour for insurers.

Believe that? I dunno if I do either--but I think this probably prevents a 2014 collapse.

If You Get Your Insurance Will You Like Your Insurance?

What kinds of policies are people getting? Well, it varies a lot. People in states with Medicaid expansion are, in many cases, for the first time in their lives getting anything and they're thrilled. On the other hand, there is sticker shock for middle class people in areas where there is little competition on the exchanges.

According to one study the "average cost" will be a tidy $328/month for a mid-tier "silver plan" but insurance rates for young men will will double in cost and go up by 50-60% for young women. In the worst case, North Carolina, he market rates will triple for women and quadruple for men. This is, of course, because many people there simply could not buy insurance at any price previously. 

Here's a handy table for estimated premiums.

This is a very clear case of winners and losers. The winners are the previously uninsured who now can get insurance and, if they are poor--but not too-poor--they can get subsidies. For the comparatively wealthy and healthy they will pay more than they did--if they get insurance at all--and will pay a fine tax if they do not buy in. These are the losers.

Whether you think this is "just," "an abomination," or "kinda okay" depends on where you fall on the political spectrum. If, however, there's a long-term benefit for the losers it would be in the form of everyone's costs going down (remember the economic axiom: A falling tide sinks all ships).

Could Obamacare Lower Healthcare Costs?

Could anything in the current climate change the rate of inflation for healthcare costs? Why don't we ask the CBO:

Something Is Causing It

It turns out that Obamacare is, in fact, a cost-suppressor extraordinaire. Not just in the above graph--but also in the projected deficit growth rates going through 2020 and beyond. So, hey, it's a job creator right there, no?

What About Congress?

The Vitter-Amendment was always a political move. Putting the President on Obamacare is nonsensical as he has a staff physician provided by the White House military office. The idea Congress would pass a bill that mostly winds up pissing off staffers is equally absurd: remember the sequester? The one part (long lines at airports) that inconvenienced Congress people? That shit got revised right quick. You think having to deal with surly aides would stand for more than a nanosecond?

This isn't going to happen, it was never going to happen, and it was stupid to begin with.

Will Obamacare Get Popular?

This is the big question: will people like it? History says "yes," eventually. Universal Healthcare is popular in every country in which it exists. Healthcare social programs have a good history in the US too. Will Obamacare break the chain?

While we don't know for sure, the answer is probably not: over time, people will accept it and like it. For one thing, the meat of it--the no-pre-existing-conditions and can't-cut-you-off stuff will be popular. As today's population gets older? Even more popular. The stay-on-'rent's-until-26 is gonna be popular with kids until the economy picks up (that'll take at least until President Christie's 2nd term, eh?).  

Today's losers (the rich, young, healthy and self-employed demographic) will become tomorrow's winners when they do get sick/older and take advantage of the policy. So there's that.

How long will it take?

I'm going to make a prediction: I predict that by Sept of 2014 Obamacare is no longer the nuclear issue it is today. I predict its popularity will still be slightly underwater (the 'Affordable Care Act' will fare a little better) but no longer bottomed out--without bad press for the website to kick around every day there will be a few people very unhappy, slightly more quite happy, and most people will be fixated on Iran's new Plutonium Exporting Business (they'll be selling yellow-cake through Amazon's new Drone Delivery system ... directly to Rand Paul, probably).

What Happens If It Actually Works?

What does that mean then? Well, it's bad news for both the left and the right.

The Left

If you are the for-real hard-core left in America this is bad news: you want Single Payer (and might kinda accept a "public option") and working private industry exchanges move you away from that. So sad. They always knew Obama was fascist!

The Right

The GOP has an even worse problem: the base paid for a full-on strike on Obamacare. They raised a LOT of money off attacking it and if they drop the line of fire the base is going to feel cheated (and, well, rightfully so). This is similar to the Benghazi issue Romney had during the debates: he wasn't a foreign policy candidate in any way, shape, or form. He'd already bungled Benghazi with his 11 PM foot-in-mouth press release.

When his base demanded the attack he wasn't the guy to make it. He blew it. Big time. If Obamacare is old news in 2014 (not to mention 2016) people in the Republican primaries demanding a lot of talk about repealing it are going to be sending candidates on the political equivalent of a snipe-hunt.

This will also prevent the GOP from actually trying to fix the law (link to Erick Erickson saying "Don't Let Them Fix It!") which will, to the casual observer, look like ham-handed political maneuvering and obstructionism. This looks good to the base and bad to everyone else. The more popular O-Care is? The worse it looks.

At the same time Obama will keep issuing 'executive decisions' to 'fix the law' and dare Congress to impeach him. They always knew Obama was a fascist!