Obamacare is the worst, except for all others

Former British Prime Minister Winston Churchill once famously said that “democracy is the worst form of government, except all the others that have been tried.”

Churchill was conceding the democratic system’s faults: messy, cumbersome, slow to react to crisis.

All of those flaws are on full display within the Obama administration as the disastrous rollout of Obamacare stumbles along.

The best that Affordable Care Act supporters can say at this point is, Obamacare is the worst type of health insurance the U.S. has ever had, except for every other type of insurance.

As messy as the current situation is, going back to the old system would be worse. The ACA plan was practical; the execution has been horrible.

The millions of people in the individual-buyers’ market who have lost their coverage are understandably feeling betrayed by the president after his “if you like your insurance, you can keep it” rhetoric. The administration knew those statements weren’t true. They knew this multitude of cancellations was inevitable.

 

In fact, Obamacare was designed in part to kill the individual market as it previously existed.

 

Critics described the sale of non-group policies as the Wild Wild West of the insurance industry, where insurers would gladly collect a customer’s premiums year by year but then abruptly drop that policyholder as soon as he or she became sick.

The ACA unveils a new day, when policies sold as “insurance” actually provide basic assurances. The old individual market was a place where people were offered a mirage of low rates, only to learn when they became ill or injured that their policy didn’t insure against much.

Imagine these products as the equivalent of an auto insurance policy that offers a customer cheap rates until a particular type of crash occurs: “Sir, you were hit by an oncoming car in the rear, driver’s-side door of your vehicle? Sorry, we don’t cover that kind of damage. You will have to pay the $7,000 repair bill out of your own pocket.”

The individual market was a place where insurers dished out price spikes to some policyholders of 20 to 40 percent. It was a market that discriminated against women, older people, the sick and, of course, those with pre-existing conditions.

 

Consumer Reports, which specializes in objective analysis of products and services, described the situation this way: “Individual insurance is a nightmare for consumers – more costly than the equivalent job-based coverage and, for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with ‘affordable’ premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.”

 

In exchange for escaping that “nightmare,” the individual market customers will receive an ACA-approved plan that protects against the old discriminatory practices, outlaws artificial coverage caps, guarantees insurance for those with pre-existing conditions, and requires all policies to provide the basics such as hospitalization, emergency room treatment, prescription drugs and pediatric care.

The stories that have emerged in the media about individuals’ big increases in premiums or deductibles are no match for the horror stories that came out of the pre-Obamacare system.

Where Obama failed was in refusing to face head-on the huge tradeoffs that this new ACA marketplace would entail for millions of Americans – a 5 percent sliver of America, but a large bloc of people nonetheless.

A year ago the president should have begun warning that many in the individual market will see their current policies cancelled (and replaced) in 2013. He could have explained, over and over, that plans on the individual market typically do not cover the 10 “essential services” required by Obamacare.

 

One prominent health care consultant said last week that it was apparent long ago to most experts within the industry that very few health plans on the individual market would survive the dawn of Obamacare. The widespread cancellation notices sent to consumers in recent weeks surprised none of the insiders.

A Blue Cross/Blue Shield of Michigan official told me recently that the state’s leading insurer knew for many months that none of its 140,000 individual policies met the Obamacare standards. The insurers didn’t want to play the role of bad guy, so the administration had the duty to step in and alert the public.

 

Instead, the White House clung to feint hopes that most insurers would opt for a grandfather-clause provision rather than cancellations. Obama’s fix for this mess – essentially a 1-year-delay for policies that fall short of the standards – comes so late in the game that insurance companies quickly cried foul.

The result may be an upheaval in the insurance market and higher premiums for those on the Obamacare exchanges. It may also undermine the entire premise of the ACA, particularly if the approach advocated by Congressman Fred Upton of Michigan prevails.

 

The administration should take advantage of the 1-year grace period to figure out why some replacement policies offered by insurers include astronomical out-of-pocket costs.

The White House has correctly explained that many of the old policies consisted of “junk” coverage. But some were not. The media has uncovered scores of people who had solid coverage and now, on the Obamacare exchanges, they face huge increases in monthly premiums or yearly deductibles for the same coverage.

That’s a potential crisis that could unravel the entire system. That is an issue which must be addressed quickly – not at the pace that the Obama administration seems to think is acceptable. After all, after three years of lead time and seven weeks of tweaks, the Obamacare website remains a national embarrassment. The horror stories of how badly that project was botched just keep coming to the forefront.

 

As evidence mounts that the administration knew the ACA portal was not ready, it’s clear that the president should have pushed back the Oct. 1 launch, especially after he had already delayed the mandatory coverage on the separate exchange for employers.

At times like these, many Americans say, “Can’t the government do anything right?”

Hopefully the American electorate also realizes that Obama’s Republican opposition has offered no reasonable alternatives. The “repeal and replace” GOP rhetoric of the past is gone. In fact, it appears that the far-right conservatives and tea party types don’t want to address the needs of America’s uninsured and falsely-insured at all.

 

During his time, Churchill knew that government could make a mess of things. But he also demonstrated that perseverance pays off. Our leaders are expected to fix things, not cast them aside.