Liberals' heads exploding as Obamacare 'fix' lays an egg

Politico has it about right:

President Barack Obama never had the right wing on health care, has potentially lost the middle and with his attempted administrative fix is now in danger of losing the left.

Daily Kos launched a petition to urge Obama to stop apologizing for people losing their health care plans. Liberal MSNBC host Ed Schultz said Obama needs just to hold the line. And Howard Dean said the White House should just enlist Organizing for Action -- the president's political arm -- to call every person who has lost their insurance plan due to Obamacare changes.

It's all part of the growing liberal angst about Obama's health care rollout. The failure of to launch was one thing, but Obama's move Thursday to allow people to keep substandard insurance policies is, for many of them, a bridge too far. They want Obama to make sure the law isn't killed piece by piece and don't like the idea of giving the health insurance industry more power than it already has.

Indeed, what the president's "extralegal" fix is all about is the beginning of the end of Obamacare. As Peter Suderman points out, allowing insurance companies to continue offering the cancelled plans is a tacit admission that Obamacare itself is unworkable:

The White House is making this fix unilaterally, as an "administrative fix" without Congressional approval, and probably without clear legal authority. Even ignoring legal questions, it's an admission that the health law cannot work as designed, especially in light of the now-lengthy history of administrative tweaks of dubious legality.

But more than that, the tweak highlights the fundamental tension between the law's politics and its policies.


The law was sold on the repeated presidential assurance that anyone who wanted to keep his or her existing health plan could do so. That promise was made so often and so forcefully because it was necessary to build enough support to pass the law, and--as we've seen in this week's Democratic defections--to maintain sufficient political support for the law after it passed. Administration political aides rejected more nuanced, accurate language because they believed it wouldn't help sell the law.

But the result of keeping that promise is the destabilization of the law's fundamental policy scheme, which requires healthy people on low-cost insurance to purchase more expansive, more expensive coverage in order to balance out the costs of sicker individuals.

In other words, the law can't work if it does live up to its presidential promises. But it can't maintain political support if it doesn't. The two are incompatible. Obama's announcement today is an implicit acknowledgment of that incompatibility--an admission not only that the law doesn't work, but that it can't and won't.

Liberals realize all this, which is why they are in such a tizzy. Their solution? Hold the line, let people lose the policies they like and force them on to the exchanges where they deserve to pay more because they were carrying "junk" policies:

Anna Galland, the executive director of Civic Action, said her members don't want to see Obama accede to demands that he weaken the health care law in order to satisfy congressional critics.

"They don't want to see this law eviscerated by death by a thousand cuts," Galland said. "They want to see the law strengthened, they want to see the website work and have the law do all the good things it's already doing."

Galland said there is "deep concern" about proposed changes to the law that would allow for people to maintain substandard insurance plans.

"I think there is a Pandora's box there once you start opening it up," she said. "The answer is not to undo Obamacare or to undo major provisions of it like allowing these junk plans to continue. The answer is to get the website working and make sure everyone has quality, affordable health care."

And Sen. Bernie Sanders (I-Vt.) said there should be no interest in maintaining health insurance plans that don't provide sufficient coverage.

"Do we want to encourage polices that are totally inadequate, no we don't. We want to move toward a situation where everybody regardless of income or age has strong coverage," Sanders said. "Am I in favor of policies which are inadequate? I am not."

Before Obama apologized 10 different times for the bungled health care rollout, there was already liberal angst about the White House getting wobbly on maintaining Obamacare.

Ed Schultz tweeted Thursday morning that no fixes would be necessary to the law.

"The only fix needed in health care reform is to abolish the junk insurance industry," Schultz wrote. "The ACA does that ! Dems hold the line."

How easy it is for liberals to decry policies that people were happy with where 60 year old women weren't forced to carry maternity benefits, people who had never taken an illegal drug in their life forced to carry rehab coverage, and most Americans choose not to carry mental health coverage.

These are all legitimate choices - along with deductibles that consumers felt comfortable with, and other policy coverges that don't meet Obamacare's arbitrary standards.

These are not "junk" policies. It is ridiculous to identify all 5 million policies (and the tens of millions that will be cancelled next year when the employer mandate takes hold) as "substandard" or "junk." Buying insurance is a highly personalized decision and government dictates only serve to take choices out of the hands of individuals and place them with bureaucrats.

Insurance companies don't want to be the the fall guys for Obamacare's failures. But that's exactly what Obama's administrative "fix" has set them up to be:

Health insurance plans are angry because this could screw up all their plans for the new health insurance markets. They have already set the prices they plan to charge in the 2014 insurance exchanges, and those relied on people transitioning out of their current plans (which would be phased out) and into these new, more robust plans.

Now, that might not happen. And insurers are in a bit of a tricky spot. It will look pretty bad if they don't allow people to keep enrolling in their 2013 plans; as the president said, its a whole lot harder to blame the cancellations on Obamacare.

But if they do allow that to go forward, it could screw up the risk pool in the new insurance marketplaces by letting the younger and healthy people (who would likely stick with their skimpier plans) stay out of the exchange. They'd essentially be siphoning off the exact same customers they were hoping to woo into the exchanges. In the very worse case scenario -- and probably not the most likely, since the health law has mechanisms to prevent this -- the exchange could end up as something akin to a really big high-risk pool.

For insurers, at this point, they're not really left with any great option.

Even if this fix works - and it won't  - Obama and the liberals are not out of the woods. Not by a long shot. Dead ahead is the realization that the website will not work by November 30, and probably not by December 30. Since the only way consumers can receive federal subsidies for their insurance is through the exchanges, a non working website means that the millions of people who were supposed to be "winners" as a result of Obamacare's generous subsidies will end up either paying the fine to the IRS or getting insurance the old fashioned way - by calling a local agent and signing on the dotted line.

What kind of "fix" will the president come up with then?

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