Despite the best of effort and intentions, thePPACA is shaping up to be a bit of a problem. When the law was passed, I suspected it would not work as expected or hoped, simply because the law of unintended consequences is an iron law. Beyond that, I knew from elementary project management that any enormous project plan that is put together in a big hurry, and without any pilot testing or serious study of the thing being planned, is doomed to failure. The PPACA broke lots of new ground in its 2000 odd pages, not only because it was huge, but it touched numerous legal, economic, ethical and medical areas. Predicting how the implementation would go, and its ultimate cost and effectiveness, has never been more than pure guesswork.
So let’s review where we stand.
First of all, we are finding that the rules in the PPACA are driving economic decisions. Incentives matter, and the PPACA is full of incentives. Unfortunately, the incentives are not working as intended. One unintended effect is the devastating effect on low wage workers. The administration’s delay of the “employer mandate” signals a tacit admission that another incentive, the employer mandate, was a horrible mistake.
The central feature of the PPACA is the exchange. This was sold as a “marketplace”, but it’s not. The exchange is a data gathering mechanism and IRS clearinghouse. It allows enforcement of policies that would be difficult or impossible to enforce without some way of tracking individuals.
Sixteen states and D.C. have said they will do their own exchanges. The rest will rely on thefederal government to implement them. A recent report by the GAO says that they are way behind; that their agreements with other agencies, and their “navigator” programs won’t be ready in time for launch.
The Exchanges are a mess. (Read here. Messy details here. Read about the millions spent on the exchanges here.)
The political coalition that drove the PPACA, and has supported it so far, is fraying. After being promised so many times that ” if you like your health care, you can keep it“, the unions are very unhappy that it turns out not to be true. In fact, the PPACA is standing squarely in the way of continuing the health care coverage that some unions fought so hard for. They are very unhappy. (also here, and here)
More recently, and ironically, the IRS union (I bet you didn’t know there was one) wants out.
Most ironically, Congress and its staff want out, too. (read here, and here)
A central promise of the PPACA was that it would control costs, but the reality, much like everything else about this legislation, is quite different. (Read here and here. Also see this about the cost for young workers)
As the states are finding one by one,unsubsidized insurance rates are rising — a lot. The insurance companies are preparing for 2014, when the requirements of the PPACA will take full effect. As these companies assess the new realities, rates are going up and some insurance companies are pulling out. (also hereand here)
At the same time, the Obama administration keeps touting the cost reductions being seen, like this one in New York. Unfortunately, reductions are only seen in states that already had preexisting mandates similar or even more costly than demanded by the PPACA. The “reductions” are only after the new federal subsidies are figured in. Translation: the actual, full cost is not reported, only the portion paid by the subsidized recipient.
Despite vigorous administration spin, the health care cost news is not pretty. Rates are going up, insurance companies are pulling out, and it looks like it will get worse, not better. (Read here, and here)
However, the worst part, in my opinion, is the damage being done to our constitution.
The president takes an oath to “faithfully execute the office” of president, and to “preserve, protect and defend” the constitution of the United States. When he acts, he sets precedent. The delay in the “employer mandate” has no obvious statutory authority. (also here) The collapse of the CLASS act could at least be justified by administrative authority provided in the law. The employer mandate has no such language. The Obama administration is setting a precedent that the president can ignore laws that he doesn’t like. We have a name for that, and it’s not “president”.
This should be a huge red flag, especially because the law being ignored is one that he fought so hard to enact. I hope both the legislative branch, and the people, wake up and demand that he follow the law.
Max Baucus, one of the proponents of thePPACA legislation has called the upcoming implementation of the PPACA a “train wreck”. (read a sympathetic article about his quotehere)
As it gets closer to 2014, it looks like Sen Baucus is right.
(As an appendix, I offer this collection of news stories: http://news.investors.com/politics/obamacare.htm)
