If the Affordable Care Act was modeled on the Massachusetts health reform, why was the rollout of the Commonwealth’s program in 2006 smooth while the launch of Obamacare is so buggy?
The answers speak volumes about what prevents Americans from getting efficient health care reform.
The latest embarrassment to Obamacare are the squawks of a relatively small number of people whose insurance is being discontinued because it doesn’t meet the new federal minimum standards. Typically, this is lousy insurance, with low premiums but very high deductibles and co-pays, or insurance that doesn’t cover many health conditions at all.
No matter — the president promised that if you like your existing insurance, you can keep it. This little detail, however defensible, makes a liar of him.
Why didn’t that happen here when they launched Romneycare?
Because of a previous reform. Since 1996, Massachusetts has banned insurers from refusing coverage because of pre-existing conditions. That’s known as “guaranteed issue.”
But with guaranteed issue, healthy people can wait to buy insurance until they get sick. They take a free ride on others who dutifully pay premiums, and that raises premium costs generally.
So when Massachusetts added a mandate to buy insurance coupled with subsidies to make it affordable and gave individuals access to more cost-effective group insurance, premiums dropped sharply because there were no more free riders. Nobody got stuck with rate hikes. In the case of Obamacare, the ban on exclusions, the mandate, and the subsidized policies are all coming online roughly at the same time — hence the rate increases for people with inferior insurance.
Secondly, how did Massachusetts avoid the computer disaster of HealthCare.gov? For starters, the Commonwealth has a smaller population than the whole country, and had a relatively low proportion of uninsured, so there were far fewer applicants to flood the new system.
In addition, Obamacare has two features that complicate the enrollment process. The policies are subsidized with a tax credit rather than directly, which gets the IRS involved. HealthCare.gov links to the IRS database, to provide income verification and calculate the credit and precise net premium to be paid by the subscriber.
But the IRS, for good reason, is very picky about who it lets its computers talk to. Designing secure software to allow millions of people to enroll was challenging enough. Allowing it to query the IRS database made the software that much more complex.
By contrast, if you go on the website of the Massachusetts Connector and enter your income and family size, you will get an estimate of what insurance will cost you. If your actual income goes up or down, the Commonwealth will make an adjustment later. No links to the IRS. Oh, and the federal government hired no fewer than 55 private contractors to design their system.
So who should get the blame for the greater confusion in Obamacare?
A ban on pre-existing conditions might have been national policy sooner, but the insurance industry and the Republicans in Congress were dead set against it.
Obama might have funded the affordable insurance policies with direct subsidies rather than tax credits, but that was also anathema to Republicans — not to mention the even simpler course of Medicare for all.
He might have had government write the software for HealthCare.gov rather than hiring dozens of contractors. But ever since Ronald Reagan, government’s core competence has been hollowed out.
In short, Republicans create conditions that make it impossible for insurance reform to be carried out efficiently — and then laugh at the political damage to Democrats. The mischief is not only in demonizing the program and trying to defund it after the fact, but encumbering it with clunky preconditions even before it comes to a vote.
One more detail: In Massachusetts, if your income is low, you simply get Medicaid (MassHealth), which is even more straightforward than going through the Connector to get subsidized private insurance. Obama included expansion of Medicaid in the Affordable Care Act, but a conservative Supreme Court of Republican appointees made that provision optional to the states. Most Republican governors are refusing to take the federal Medicaid money, leaving the working poor in those states without affordable insurance.
Hey, it’s great to live in Massachusetts. But before we credit the superior leaders of the Commonwealth and blame the dopes in the Obama administration, let’s have a big shout-out to the congressional Republicans.
Robert Kuttner is co-editor of The American Prospect and visiting professor at Brandeis University’s Heller School. His latest book is “Debtors’ Prison.’’