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Ready or not, major Obamacare entitlement is coming
Amid foul-ups, delays, confusing cost projections and a furious partisan battle over its fate, Obamacare will open for enrollment Tuesday as the first major entitlement program in a half-century.
While some portions of the unpopular law already have taken effect, the launch for enrolling people in online health insurance “exchanges” will be the real test of whether the program works as President Obama has predicted, or fails from a lack of participation.
The rollout, after computer glitches and postponed deadlines, doesn’t look promising.
“You don’t get a second chance to make a first impression,” said Michael Tanner, senior fellow at the Cato Institute. He said of the mix-ups. “That’s not going to improve its image.”
Mr. Obama warned last week that his big product launch would come with snafus, but he said Americans ultimately will like the program when they experience its benefits and ease of access.
“If you’ve ever tried to buy insurance on your own, I promise you this is a lot easier,” the president said. “It’s like booking a hotel or a plane ticket.”
Within minutes of his sales pitch, however, the administration revealed delays in online enrollments for employees at small companies and for Spanish-speaking consumers. Those complications followed the administration’s announcement that it was postponing the startup date for larger employers for a year.
It’s a balky beginning to a program that Mr. Obama is comparing to popular entitlements such as Social Security and Medicare.
“The administration’s admission now is, ‘Yes, we’re adding another entitlement, this time for people of middle income or lower income,” said Paul Howard, a health care specialist at the libertarian Manhattan Institute. “The law is awfully light on cost controls and is generally going to add costs to the system rather than slow it down.”
Insurers and the administration are counting on Americans, especially healthy young people, to sign up for coverage in the exchanges to make the program cost-effective. The federal government is running all or part of the exchanges in 36 states to cover a total of about 32 million uninsured people.
But along with uncertainty about the program, young people could be turned off by the pricing, especially if they have never paid for insurance. While the administration issued a report saying premiums will be “lower than expected,” the Manhattan Institute’s research found that rates under Obamacare are likely to rise about 99 percent for young men and 60 percent for young women. In plans with the lowest premiums, out-of-pocket expenses could be as high as $6,000 per year.
“If you’re telling young, healthy people with very low expected health care expenses that they’re going to be required to pay significant amounts of money out of pocket for coverage they’re not going to use, I think that’s going to be a bad bargain for them,” Mr. Howard said. “Especially when the penalties for not carrying coverage for the first year or two are very low.”
If young people don’t sign up in large numbers, Obamacare won’t work financially like the administration claims it will. Instead, insurers and taxpayers would be paying for a system primarily made up of older people whose medical costs are higher.
“It leads to this death spiral of adverse selection for the program,” Mr. Tanner said.
Nobody knows how much Obamacare will cost. The nonpartisan Congressional Budget Office has estimated it at $1.9 trillion over the first decade; the Cato Institute has pegged the cost at $2.7 trillion.
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About the Author
Dave Boyer is a White House correspondent for The Washington Times. A native of Allentown, Pa., Boyer worked for the Philadelphia Inquirer from 2002 to 2011 and also has covered Congress for the Times. He is a graduate of Penn State University. Boyer can be reached at firstname.lastname@example.org.
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