The End of the Beginning

Some of you may recognize the title of this post as part of a quote from Winston Churchill:

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Although Sir Winston was talking about the Battle of Egypt, the same could be said of Obamacare today. Since this is a holiday week, there is a good chance that you missed the announcement from the Treasury department on Tuesday afternoon. The Obama administration unilaterally decided to delay implementation of the employer mandate part of the law until 2015. Never mind that this is  another example of a President who repeatedly decides which laws he’ll enforce (in direct contravention to the Constitution). That’s a another post for another day. No, this is yet another example of what was supposed to be the greatest thing since sliced bread is actually what a whole bunch of us realized it was from the beginning: in military parlance, a BOHICA SNAFU. (For those of you unfamiliar with military terms, this is a family blog. Feel free to use a certain search engine to look it up).

How bad has this been? There are bad laws and there are poorly executed laws. But this law was less about the stated intention (revamping the American healthcare system to provide easier access, with lower costs, for all Americans) than it was about a political power play between the two major parties. The result was a poorly conceived law, rammed through an indifferent Congress by a power-hungry administration, crammed full of pork and incapable of actually working. Every day seems to bear out the fact that nobody read the ACA before the final vote (even if they had, it would have taken a year more just to figure out the details).

To date, there have been 10 instances where the Obama administration has been forced to admit defeat on a particular program in the ACA. The reversal on the employer mandate is the latest, and one of the most critical. The reason they gave, that businesses needed more time to figure out the paperwork, is as believable as the tooth fairy. The real reason is that businesses already figured out how to avoid the paperwork completely: keep workers under the 30 hour limit which would trigger the mandate. Friday’s jobs report, which showed that more part-time jobs were created than full-time jobs, underscored this.

Score one for those of us who warned that Obamacare was an economy killer.

Unfortunately for the American worker, the individual mandate is still in place. The removal of the employer mandate means that some 36% of Americans are now going to be forced into purchasing private medical insurance. The employer mandate proved politically unworkable in practice, I suspect that by October (when everyone needs to start shopping) the individual mandate will prove even more politically impractical.

By the way, here are the 9 previous ACA failures:

• The CLASS Act: a long-term care insurance program that died last year. The reason? The law, as written, couldn’t be funded. The supposed budget savings amounted to 40% of the total deficit reduction attributed to the ACA.
• Federally mandated insurance exchanges: States were given literally unlimited funds to set up insurance exchanges that would allow uninsured folks to shop for coverage. The problem is that only 17 states have bothered with setting up the exchanges and the law requires HHS to set up exchanges for any state that doesn’t. But the ACA failed to foresee that states might not want to bother with the regulatory and administrative nightmares in trying to create a health care exchange and provided zero funds. HHS estimates it will cost at least $1.5 billion dollars to get the exchanges up and running. Good luck with that.
• Small business exchanges: along the lines of the individual exchanges, these were intended to allow small business employees to access the same rates enjoyed by employees at major corporations. They aren’t dead yet – but like the employer mandate, they have been delayed until 2015. The problem isn’t political here, though – it’s a real-world issue. Namely, how do you get the same actuarial certainty for an employee at a company with 10 employees as one who works with 1,000 other people? (Trick question: you can’t do it. But remember, the math geniuses in Congress who dreamed this up also raise government spending, then call it a “budget cut.”)
• 1099 reporting: This was a major funding tool for the ACA that was scuttled because it amounted to both a new tax and a reporting headache for every employer in the country.
• The Great Waiver Debacle: a provision in the ACA allowed HHS to issue waivers to organizations that could prove they needed them. Lo and behold, the Political Patronage and Payback Machine kicked into high gear. Over 1200 waivers have been granted (nobody knows for sure, because HHS stopped reporting the numbers a few months back). But if you gave to the Obama campaign or the DSCC, it looks as if you got a waiver. Funny how a law that was supposed to benefit everyone has proven so incredibly unpopular in core Democratic Party constituencies.
• The Pre-Existing Plans: great idea, on paper. Anyone who has a preexisting condition knows how difficult it is to find medical insurance. But once again those Congressional mathematicians didn’t realize how much it would cost to insure everyone – and the program has already run out of money. No more people are being accepted, even though HHS estimates that only 30% of those eligible are covered.
• Children Only Plans: under the ACA, if an insurance company sells child-only healthcare plans they need to offer coverage to kids with preexisting conditions. Somebody forgot to tell Congressional Dems the way the marketplace works (that companies do not willingly increase costs without some future benefit). The child only plans have virtually disappeared from the marketplace, a casualty of Obamacare.
• The “Basic Health Care Plan”: What’s that you say? You’re in perfect health, you’re young and you really don’t want to pay for full coverage that you can’t afford, even with the promised subsidies? Well, not to worry: the ACA mandated that states offer a basic plan – or essentially, catastrophic coverage-only. Except, as with the other mandates, it has proven unworkable and pushed back to 2015.
• “If you like it, you can keep it”: I saved the best for last! The greatest example of marketing hucksterism exhibited by the Obama administration was the President’s repeated assurances that if you liked you  current health coverage, you would get to keep it after the ACA was passed. It’s pretty clear at this point that either the President is as dumb as rock when it comes to market economics or a bald-faced liar, because millions of Americans no longer have the health insurance options they had 4 years ago. Heck, HHS expects that some 126 million Americans will see a “significant” change to their health coverage as a result of the ACA.

The administration and Congressional Dems keep telling us that we’ll love Obamacare once it fully takes effect. They insist the law’s problems have more to do with poor marketing and Republican obstructionism than any basic flaws. But the record on implementation has more failures than successes and the law keeps proving to be more and more unpopular across all demographics.

Here’s a suggestion for the President. Admit that the latest reversal is, in fact, proof that the ACA is a disaster. Politically, it swept your party out of power in 2010 and is threatening to reinforce those losses in 2014. If you are truly interested in your legacy, which seems to be the general consensus among the DC elite, then do something no President has done.

Declare that your “signature accomplishment” is failing to deliver on the promises it made. Ask Congress to repeal it, scrap it and consign it to the dust heap of history. Ask Congress to work together to craft a healthcare reform package that actually works to improve delivery and reduce costs. In short, take ownership and command the respect true leadership creates.

This is the beginning of the end. The only question at this point  is whether the President can rewrite the script and create a happy ending. If the past 5 years are any indication, he is politically incapable and (more importantly) personally unable to do so – and the nation will suffer as a result.