Obamacare’s Unintended Consequences: It’s Not Just a Technology Problem

stewart sebelius interview

Ron Suskind’s Pulitzer Prize-winning account of Barack Obama’s first two years in office, Confidence Men, tells the inside story of the wheeling and dealing that culminated in the Affordable Care Act (ACA). According to Suskind:

By the time it passed, almost no one could feel great about it. The process had been so ugly – and the end product so convoluted – that even its fiercest apologists would acknowledge that it was a bill that was only a start.

We’re now getting a good look at exactly what Suskind’s “start means, most recently with the launch of the insurance exchanges. Based on the latest reports, it appears to mean:

  • Crony capitalism – see this report from the Sunlight Foundation (h/t Arnold Kling).
  • Government secrecy – see this Wall Street Journal editorial.
  • Prioritization of election politics over policies – see this report in the National Review.
  • Inefficiencies and incompetence – see this article by Megan McArdle.
  • Alternative realities – see Jon Stewart’s interview with Health and Human Services Secretary Kathleen Sebelius on The Daily Show (more on this below).

Unfortunately, these aren’t the worst of our problems. The HHS’s amateur hour created quite a stir, but it will eventually pass. Whether in three months or three years, programmers will iron out the new system’s “glitches.” We’ll then be left with more threatening and far-reaching challenges, such as hiring disincentives and fiscal risks.

If you agree with this perspective, you may also agree that two of last week’s most relevant blog posts weren’t related to break-downs in the insurance exchanges. These are:

  • Tyler Durden parsed the Fed’s October 16th Beige Book release and found no less than eight references to the ACA’s effects on business activity. Here’s a typical observation reported by the Fed: “Many contacts also commented on reluctance to expand due to uncertainty surrounding the Affordable Care Act; some employers cut hours or employees.”
  • Durden also shared a table reported by J.P. Morgan’s Michael Cembalest comparing estimated and actual costs for five Medicare programs, one Medicaid program and the Massachusetts state health reform of 2006. The data shows actual costs exceeding estimates by 107%, 129%, 150%, 644%, 817%, 1600% and 20%, respectively. And yet, we’re expected to believe the administration’s highly politicized projections that the ACA will be deficit neutral.

We recommend checking out both posts. They suggest the most important question we should be asking is not the one that Stewart repeated several times while grilling Sebelius: “Businesses were given a delay of a year, but individuals were not given that option, why is that?”

The bigger question is: “If the administration messed up so badly on the seemingly mundane task of building a website, how much will Obamacare damage the broader economy and the nation’s long-term fiscal health?”

The Stewart-Sebelius interview drew attention to the second question only briefly, when Stewart mentioned that employers were converting full-time workers to part-time due to the ACA. But he failed to challenge Sebelius’ weak response that “economists – not the anecdotal folks – but economists say there’s absolutely no evidence that part-time work is going up.”

This is exactly where an informed and unbiased interviewer would have dug further to expose the truth.

Contrary to the administration narrative that Sebelius was parroting, we showed in “’Anecdote This,’ Dr. Furman” that the evidence of an ACA part-time worker effect is conclusive. Not only are reports from so-called “anecdotal folks” too pervasive to be credibly dismissed, but the claim that part-time work hasn’t “gone up” is just plain wrong. Even though most employers are unlikely to finalize policy changes this far ahead of the ACA’s postponed employer mandate, government data shows that part-time jobs jumped sharply in the quarter before the postponement, while full-time jobs stagnated.

Getting back to Suskind’s observation that the ACA was only a “start,” it appears to be a rocky start based on the exchanges fiasco. We should be even more concerned about the part-time worker effect, broader effects shown in the Beige Book, and the history of health program costs. These are a few of the many reasons to expect an even rockier road ahead.

Update (Oct. 25): The Wall Street Journal published an op-ed that may be the most alarming Obamacare scenario I’ve read – one physician imagines the health care scene in 2016. Also, Arnold Kling made seven very interesting observations about the IT issues.

Bookmark and Share
This entry was posted in Uncategorized and tagged , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

8 Responses to Obamacare’s Unintended Consequences: It’s Not Just a Technology Problem

  1. Bobbylou says:

    I have been saying this, commenting on this and writing about this bad Obamacare idea since I read 60% of the ACA legislature. This is bad news for the whole country. Something that helps so few people is nothing to cheer about.

  2. govtrumbull says:

    From the first day Obama talked about his healthcare concept, we had to know that it was going to be a mess. We just didn’t know how big of a mess it was going to turn out to be. My Physicians are already talking about closing shop, and that includes our Dentist! There is going to be almost nothing left as far a healthcare by the time Obama and his agents get through with his “Fundamental Transformation” of healthcare.

    The system when revamped is going be a shadow of its former self. Hospitals are going to close, we are going to see Doctors go out of business, prescription drugs are going to be scarce and extremely expensive, and insurance companies are going to get out of the business.

    It does not take a “Rocket Scientist” to figure out where this is going. Obama wants a single payer system that the government will control. He wants to take life and death decisions away from medical professionals and turn those decisions over to government bureaucrats.

    This is a big fat mess that is going to kill people, and Obama knows it. American Physicians, Professional Healthcare Workers, hospitals, pharmacies, and drug companies have to make money to work, or to stay in business. They are not going to work out of the desire to be altruistic. The people in this industry have families, mortgages, taxes to pay and obligations that have to be met like everyone…, except the politicians of course.

    This entire episode of political connivery is going to kill America, our freedoms and liberties. It is going to be hard times ahead for everyone

  3. Gregory Farnsworth says:

    Congress must challenge Obama on his stonewalling on any discussion of the problems that have cropped up on Obamacare since it was passed into law. Obama and the Democrats refuse to discuss the law or entertain any amendments to it because the can’t defend it. It’s the oldest trick in the book. When you can’t answer a question, you stonewall, change the subject, or follow Sol Alynsky’s principles of dismissing the accusation (it’s phony), and discredit the messenger (call them a name. The term “blackmailer” comes to mind, but “tax-dodger” and “anti-American” work very effectively). The Republicans must take the offensive in order to survive.

    • skeeter says:

      Gregory, it is too late to wish congress to watch over you. You, me, and the rest of Amerika have sat on our hands and let the elected feed themselves on our toil, without keeping them in check.

      The people must rise up and take back their country. It is a fact.

  4. CRW says:

    One of the jobs of the congress is to keep the president in check. When the president & his party force something as off-the-scale as the “Affordable” Care Act thru to law, the congress has a though job and that is exactly what they have been doing, contrary to the selective reporting of the press. I pity the people caught in this trap. The intent of the U.S.government is to “provide for the common defense, PROMOTE (NOT PROVIDE) THE GENERAL WELFARE…

  5. Anonymous says:

    The man is Evil – he is a figurehead of others Evil. HOw to discover?

  6. Mike says:

    (MU)BARAK CHUSAIN “O”BAMA, isn’t a legal President, according the constitution, because he’s not born in the United states of America and therefore isn’t loyal to, the United states of America government it’s constitution or constituents. The birth certificate what they presented usaafter him being in the white house sum years, is made up. It was played around with it should be presentable to the American people but it is not a true one. Any good graphic designer could see it, and lets say that you can’t, the question is where was it until they gave it out. Birthers Shmirthers the truth is that the once democratic party candidate and now`s U.S. president wasn’t constitutionally elected , and therefore should be removed as soon as possible.

  7. Noel Hershfield says:

    I have worked in the Canadian system for55 years and am still sane! Our life expectancy is better than yours, and everyone can see their doctors for checkups,so our preventative efforts reach everyone including those with little money.The fact that some doctors in your country are closing shop is disgusting.Why are they doctors ? We take an oath to help the si k,no matter who they are! The doctors are going to be busier than ever,and will be complaining that they are too busy,once the people realize they can be seen,without having to worry about the ridiculous fees some doctors charge!

Comments are closed.