- - Sunday, November 17, 2013

Obamacare has blown up on the launch pad. People are having their health plans canceled, and they are now stranded, unable to replace their old insurance policies with new plans purchased through the insurance exchanges because the Obamacare website is dysfunctional. President Obama is trying to prevent a chain reaction from getting out of control by proposing a system restart, requiring insurance companies to reinstate canceled plans for a year to give the administration time to “fix” the website and get the exchanges operational.

The turmoil with Obamacare is best understood not as an unexpected explosion, but rather as a case of controlled demolition gone haywire, in which the control mechanisms were short-circuited and the timing of the charges were out of sync. Rather than blowing up, the website and insurance exchanges were meant to manage and control the demolition of the rest of the private health insurance market. The president’s latest maneuver is a damage-control effort to fix the website’s wiring, delay and re-sync the demolition charges, in effect restarting the controlled demolition of private health insurance.

Obamacare is doomed to fail eventually, not because of a website failure, but rather because the law itself is internally contradictory and in violation of the fundamental laws of economics, the hallmark of all grandiose schemes of central planning and government control. In the process of failing, Obamacare will destroy not only the individual health insurance market (which there is now little doubt was an integral and intentional design objective of the measure), but also eventually eliminate the employer group health insurance market as well, which will doom Obamacare as we know it.

Fascinating isn’t it? By signing onto Obamacare, the health insurance industry signed its own death warrant, and just as Lenin predicted, the industry also provided the rope with which to hang itself. When Obamacare goes, so goes the private health insurance industry. That’s what happens when the business community allows its own greed to lure it into a Faustian bargain.

Whether or not destruction of the private insurance market was an intentional booby trap planted by Obamacare’s architects, there is no doubt that forward-looking activists and politicians on the left are now gleefully anticipating the destruction of private health insurance in the hopes of using the Obamacare implosion as the catalyst for replacing it with the president’s and their own true objective: a centralized, single-payer system — real socialized medicine. The trick for them is to control the demolition process.

For opponents of Obamacare, the fact that the law will fail is of little consolation because the manner in which it fails and the configuration of political power that exists when it occurs will determine whether something better or worse arises from its ruins.

Whatever the original intention of Obamacare’s congressional architects, the intention of the Obama administration is now to preside over a controlled demolition of the private health insurance system while it hides behind a disingenuous, faux effort to “save” it through the insurance-exchange monstrosity, which it knows cannot possibly work even with the best possible website. Voters should not be as gullible as the health insurance industry continues to be about the law. Mr. Obama’s efforts to “fix” Obamacare are not about saving the private insurance industry. At the end of the day, the administration’s efforts are all about damage control as the industry disintegrates so Obamacare can be replaced by real socialized medicine.

The destruction of the individual health insurance market already is well underway with millions of policy cancellations and rate hikes beginning to plow it under. Corrosion of the employer-provided, group health insurance market also has begun, as smaller employers rejigger their workforce to keep the number of full-time employees below the magic number of 50, which triggers the employer mandate in 2015. Even large firms that will not be able to avoid the employer mandate are refusing to hire full-time employees, preferring instead to fill the ranks with as many part-timers as possible, who are not covered under Obamacare’s employer mandate.

Unless the American people rise up in opposition to Obamacare soon, it will be too late to defuse the booby trap. The entire private health insurance industry will be effectively demolished within five years if the demolition is allowed to continue unabated. The 2016 presidential election will be the last exit before the abyss.

Without pushback, odds are on the administration’s being able to manage the failure successfully between now and 2016. Mr. Obama is a master at outlasting the outrage, and in doing so preventing voter outrage from boiling over and bringing about a political realignment in Washington over Obamacare’s failure. If the president successfully regains control of the demolition process, there will be no stopping the transformation of Obamacare into real single-payer, socialized medicine.

The bad news is millions of Americans will be harmed as Obamacare collapses. The good news is, with the 2014 midterm elections providing a skirmish ground and the main presidential battle still three years off, the continuing daily horror stories surrounding Obamacare will provide an opportunity, if handled properly, to persuade the public that the law cannot be fixed, that a socialized, single-payer system will be worse, and that a political realignment in Washington is necessary to prevent the Obamacare disaster from becoming a socialized-medicine catastrophe.

Lawrence A. Hunter is president of the Social Security Institute.