It’s been a rough couple of weeks for Obamacare. First, Senator Ted Cruz and his Tea Party cohorts shut the government down in a failed bid to defund the bill. After surviving this assault with its funding intact, Obamacare, or more accurately the Obama administration, shot itself in the foot with a stumbling rollout. Healthcare.gov, the go-to website for all your health insurance needs (i.e. information and access to state exchanges) set up by the Affordable Care Act (ACA), immediately manifested rampant glitches, and continues to do so. Just today, the system that allows customers nationwide to purchase plans failed.[i] This scenario is far from the red carpet rollout presumed by ACA supporters for this $350 million endeavor.[ii] Exacerbating the issue, the administration was essentially forced to admit that it knew a large percentage of individuals would face cancellation of their current insurance policies, contrary to Obama’s earlier assurances (although this is a whole separate discussion).[iii]
All of the political he-said-she-said aside, the events of the past week are legitimate cause for concern about the viability and efficacy of the exchange-based system, among other mechanisms instituted by the ACA. While the economic merit of the individual mandate, a topic I won’t broach today, remains unchanged, a central contention of Obamacare skeptics has been somewhat vindicated. The waste and inefficiency they predicted would accompany this massively expanded bureaucracy has already proven difficult to contain. Yet, there are cures for Healthcare.gov’s ills. I agree with those observers who argue that in due time the online marketplace will run smoothly (for a clear “diagnosis” of the website’s issues and potential solutions read Dr. Ezekiel Emmanuel’s NYT op-ed here).
On the other hand, I fear that similar unforeseen troubles may be plentiful as the health provision and insurance industries increase in scale and complexity. The government is now committed to regulate the industry such that it keeps pace with evolving medical standards and insurance schemes. This entails a constant interaction between the federal (and state) bureaucracies and the private healthcare sector. In doing so, there are bound to be kinks, or even full-scale disasters within the bureaucratic process. True, inefficiencies are a fact of government institutions. Healthcare, though, represents approximately 18% of U.S. GDP.[iv] Consequently, an otherwise manageable issue has the potential to be magnified to the point of causing significant economic damage. This is not even to mention that people’s lives are at stake, rendering the system’s predictably sluggish response time a vital danger.
It seems Obamacare is now the law of the land, bearing an unlikely veto-proof takeover in 2014 by the Republicans in Congress. Clearly, however, the regime in place is far from perfect. Hence, I strongly believe in continued debate on the issues of healthcare quality, cost management and the proper role of government in addressing these issues as they arise in the future. Hopefully, this post will ignite some of those conversations.