Why Obamacare will work (on its own terms)
BY JOHN CASSIDY
Every day, it seems, more damaging details emerge about the rollout of the federal online insurance exchange at the heart of the Affordable Care Act. Today’s revelation, courtesy of the Washington Post: days before the launch, officials and government contractors conducted a test of the new Web site, during which it crashed when just a few hundred people tried to log in simultaneously. But the Obama Administration went ahead with the rollout anyway, only for the site to seize up just hours into October 1st.
Until the Administration gets the site working properly, this story will dominate the news and overshadow the underlying reality about Obamacare: judged on its own terms, the new health-care system is likely to work. In the coming decade, tens of millions of Americans will end up using the new health-insurance marketplaces—both the federal one and the state ones—and the number of uninsured will drop quite dramatically. Not everybody will end up being covered, but, excluding unauthorized immigrants, who won’t be eligible to use the new system, it seems likely that, at a minimum, the proportion of people who are uninsured will be cut in half.
What is the basis of these statements? Not any particular affection on my behalf for the new system, which largely preserves the private-insurance model that has proved so costly and inefficient. As somebody who grew up using the British National Health Service, I’ve always been more attracted to a single-payer system that guarantees coverage. (No, my Republican friends: introducing such a system wouldn’t amount to imposing an alien European-style socialism on the American public. Under the rubric of Medicare, almost fifty million Americans already enjoy, and value greatly, precisely this type of system.)
My confidence that the Affordable Care Act will meet its coverage objectives is based on a belief, shared by most economists, that financial incentives, if they are big enough, tend to work. Obamacare, once it gets up and running, will provide very large incentives for people to get coverage—subsidies of as much as ten thousand dollars a year for some low-to-middle-income families. Over time, the presence of these incentives, which include substantial fines for individuals who refuse to buy coverage, will almost certainly overcome any glitches or difficulties in the system of enrolling. When people think they are getting a good deal, they are willing to put up with a bit of hassle. And for many of the uninsured, Obamacare is a very good deal.
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