Reactions to Obamacare’s HealthCare.gov disaster and cancellations of hundreds of thousands of individual health insurance polcies that don’t meet the law’s mandates highlight the chasm in the four-year debate over the law and the decades long debate over U.S. health care reform.  For Obamacare supporters, the goal of expanding health insurance justifies the means.  For opponents, the botched roll out and cancellations highlight what they perceive as wrong with Obamacare’s expansion of government control over health care and insurance.

Many of my academic colleagues in business and medicine eagerly awaited the October 1 launch of the online exchanges or “Marketplaces,” in part because of the opportunities for research, but more fundamentally because of heartfelt beliefs in the merits of coverage expansion, backed up by their own willingness to pay higher direct or indirect taxes to achieve that goal.  They had waited in anticipation since the law’s enactment in March 2010.  While many had wanted more, such as “Medicare for all,” or at least a public plan option on the exchanges, they recognized that Obamacare, having passed outside of normal legislative order without a single Republican vote, had achieved as much as politically possible. Their main reaction to the the amazingly dysfunctional launch of the online, federal exchanges and significant problems in some state-run exchanges has been to stress that the federal website will be fixed and operational in due course, that the law itself is fundamentally sound, and that millions of Americans will soon have access to affordable health care. 

Regardless of whether those forecasts are correct, progressives for whom expanding health insurance trumps other policy considerations are often willing to overlook or minimize a multitude of sins concerning Obamacare’s design and rollout.  To them, requiring many people to obtain coverage with benefits that they would not choose to include voluntarily is in many cases desirable and in other cases a necessary evil.  Implicitly and opaquely taxing some young people through higher premiums, even net of premium subsidies, and more limited coverage choices than would be the case with fewer restrictions on rating and coverage is an acceptable means to achieve the overarching goal of expanding coverage.  Implicitly and opaquely taxing some older but healthy people who will face higher premiums and fewer choices under Obamacare, despite the law’s restrictions on age rating, is likewise acceptable.

By all accounts the HHS decisions to require people to create accounts on HealthCare.gov before browsing policies and premiums was a contributing factor to the site’s meltdown.  Reluctance to show people premiums without also showing their net cost after subsidies is understandable.  The merits of that decision notwithstanding, the HHS decision last week (http://www.cbsnews.com/8301-505269_162-57608843/healthcare.gov-pricing-feature-can-be-off-the-mark/ )  to allow people to see premiums, but only those for a 27-year old for people up to age 49, and only those for a 50 year-old for people aged 50 and older, is far more troublesome.  Most people who persevere enough to see those premiums will see values that are lower and often much lower than the correct premiums for their age.  Whether by design or incompetence, this limited disclosure certainly seems highly deceptive.  The response of an associate of mine, however, was that while the “inaccuracy” is unfortunate, the important thing is that the Marketplaces will eventually be fixed and millions of people will have access to affordable care. 

To be sure, many conservatives have likewise resorted to “ends justify the means” arguments and tactics in their heartfelt belief that Obamacare is bad for the country.  The general goal of defending liberty through limited government, the particular goal of derailing a major expansion in the bureaucratization of health care, and the tactics used by some of the law’s advocates have caused some conservative analysts to exaggerate Obamacare’s sins beyond available evidence and objectivity.  While the stakes are enormous and politics isn’t beanbag, this behavior risks blurring a fundamental distinction between progressive and conservative views regarding ends vs. means, with the potential for long-run and unintended consequences for the resonance of the conservative message.  There’s enough for conservatives to criticize in the law without resorting to such tactics.

A year hence the country could be in the midst of a rough but, apart from longer-run budget issues, arguably stable transition to Obamacare’s Medicaid expansion and income-based subsidies for low-to-middle income people who are not offered prescribed minimum health coverage through work.  Or the system could be collapsing under its own weight, with significant action required, and a pitched battle over whether fixes should entail even greater government control of health care and insurance or a more limited, market-oriented approach.   We’ll learn a lot in the next few months about which outcome is more likely.               

Many conservatives and now apparently some Democrats are pressing to delay the individual mandate for a year in response to the chaotic roll out of the new online health insurance marketplaces (a.k.a. exchanges).

A few observations:

• Considerable uncertainty exists about the extent to which the mandate will encourage previously uninsured, younger and healthier people to sign up for coverage, especially in view of the relatively small penalties for not signing up for 2014.  But delaying the mandate would certainly lead to some reduction in younger/healthier take-up of coverage, with some increase in the average costs of covering people who sign up, and it would amplify the already high degree of uncertainty about the magnitude of take-up and claim costs.
• Insurance companies approved for providing coverage through the exchanges developed their medical cost projections and premiums under the assumption that the mandate would be in effect.  They were pressed vigorously by the federal and some state governments for low premium rates, which led some companies to withdraw or stay away.
• Delaying the mandate would lead to some increase in insurers’ costs of providing coverage in relation to their projected claim costs and agreed premium rates.
• Rational insurance company executives, whether of for-profit or not-for-profit entities, might wish to reprice coverage if the mandate were delayed, which hardly seems feasible, or perhaps consider withdrawing from the exchanges, assuming that would be legal.  Threatening to withdraw would be politically risky.  The insurers (or shareholders of for-profit entities) might have to take one for the team.
• There might be more than meets the eye to the President’s meeting with health insurance executives.