ObamaCare: The national punch line

ObamaCare: The national punch line

Comedian Jon Stewart ranted recently that there are more people who believe that ObamaCare was repealed than who have signed up for it. The president’s signature achievement is now a national punch line. The federal ObamaCare health insurance exchange website, healthcare.gov, has been plagued with problems since it was unveiled on Oct. 1. Many have...

Comedian Jon Stewart ranted recently that there are more people who believe that ObamaCare was repealed than who have signed up for it. The president’s signature achievement is now a national punch line.

The federal ObamaCare health insurance exchange website, healthcare.gov, has been plagued with problems since it was unveiled on Oct. 1. Many have been unable to create accounts, the subsidy calculator often gives inaccurate information, and the site frequently times out. But these glitches may be masking more serious, underlying ones.

According to a recent New York Times article, one technology specialist estimates that “as many as five million lines of software code may need to be rewritten before the Web site runs properly.” If that prediction is accurate, the federal health insurance exchanges would almost certainly face an insurance death spiral, where older and sicker patients dominate the insurance risk pool.

This will happen because older and sicker patients are going to be far more motivated to jump through the additional hoops required to enroll in this glitch-plagued system. If the system is not up and running well before Dec. 15 – the deadline for coverage beginning on Jan. 1, 2014 – this will surely cause a death spiral.

In order to avoid this death spiral, the young and healthy will need to enroll in the exchanges to balance out the older and sicker patients. If they don’t, the risk pool will be dominated by the older and sicker individuals. As a result, premiums will necessarily rise – by a lot. This destroys the basis of the risk pool, leaving much higher prices and even more incentive for the healthy to leave the risk pool.

The administration will soon face some tough choices if the health exchange website is not fully operational in short order. Their choices are to push forward with a failing health scheme or delay the individual mandate that requires individuals to purchase health insurance.

When asked whether the administration would delay the individual mandate if the website was not fully operational and people were unable to sign up for coverage, White House Spokesman Jay Carney refused to answer.

The administration may soon realize that ObamaCare may be dead on arrival.

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