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October 18, 2013

Industry Insiders: White House Will Be Forced to Consider "Unthinkable Options" On ObamaCare If System's Myriad Problems Are Not Fixed Shortly

A long piece from Yuval Levin, well worth reading.

The tone of the CMS officials who spoke with me was a kind of restrained panic.... The insurers are very, very worried about the viability of the exchange system—especially but not exclusively at the federal level.

One key worry is based on the fact that what they’re facing is not a situation where it is impossible to buy coverage but one where it is possible but very difficult to buy coverage. That’s much worse from their point of view, because it means that only highly motivated consumers are getting coverage. People who are highly motivated to get coverage in a community-rated insurance system are very likely to be in bad health. The healthy young man who sees an ad for his state exchange during a baseball game and loads up the site to get coverage—the dream consumer so essential to the design of the exchange system—will not keep trying 25 times over a week if the site is not working. The person with high health costs and no insurance will. The exchange system is designed to enable that sick person to get coverage, of course, but it can only do that if the healthy person does too. The insurers don’t yet have a clear overall sense of the risk profile of the people who are signing up, but the circumstantial evidence they have is very distressing to them. The danger of a rapid adverse selection spiral is much more serious than they believed possible this summer. They would love it if the administration could shut down the exchange system, at least the federal one, until the interface problems can be addressed. But they know this is impossible.

That's the more bureaucratic, bloodless way to say "death spiral," of course. But I almost like how much more clinical it is.

He reports that insiders expect the enrollment period to be extended-- to them, it seems obvious it will have to be.

A delay of the individual mandate penalty—which effectively begins in the middle of February—is not thought to be a crazy idea (though the people I spoke with said they have not seen internal preparations for such a move at this point).

The nightmare scenarios, the “unthinkable options,” involve larger moves than that—like putting enrollment on hold or re-starting the exchange system from scratch at some point. No one seems to know how this could work or what it would mean, but everyone involved is contending with a far worse set of circumstances than they were prepared for. This is a major disaster from their point of view, not a set of glitches, and they simply do not know how long it will take to fix.

The very best of hands, as Instapundit always says.

Buck up, little campers -- your health and life are now in the hands in the very best and brightest of the Federal Government Bureaucracy, a field of employment known for attracting go-getters, self-starters, high-achievers, and honest brokers.

Michael Barone considers the implications of a major policy failure on the political standing of the Democrats, which is all perfectly obvious but still enjoyable to ponder.

One caveat I'd add, though: A team is never as good as it looks when it's winning and it's never as bad as it looks when it's losing.

Unless it's the Giants.

No, even the Giants, actually. They'll win one or two games this year. I think.

So I think we must be careful to not over-predict disaster, and thereby reduce expectations so low that even Barack Obama can meet them.


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posted by Ace at 06:47 PM

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