Jay Cost:
Today is the last day of open enrollment in the Obamacare exchanges. Last week the administration had announced six million enrollments, with about five days left to go. If they enroll new people into the system at the same rate as they had the previous 10 days, that would put the final, nominal number around 6.5 million. If there is a surge of enrollments, then that could place it higher still.
Does any of this really matter? Yes and no.
NO: The reality is that the number of people who actually get health insurance will be less than what the administration is saying. Industry expert Bob Laszewski–who has of late become a fixture on television and in news reports–says the number will be 80 percent of the nominal total. Additionally, the handful of states that have reported paid enrollments show them to be running at about 80 percent of the nominal total.
What is more, there is a massive churn operation going around here, which is to say that the bulk of new enrollments appears to be people who previously had health insurance. An as-yet-unreleased report from RAND says that about a third of exchange enrollees were previously uninsured. It is reasonable to expect that this percentage will increase with the end of open enrollment, but it still is not a great number.
YES: These are people who previously had not been insured. Factor in the people newly enrolled in Medicaid, and we are looking at something like 5 to 6 million people previously uninsured (let’s exclude those who received insurance from their parents under the age of 26, as this is an uncontroversial measure that would survive any reform effort). That is a substantial group of people for political purposes. Add to this group the people whose net costs have decreased because of significant premium and deductible support, and Obamacare now has a substantial constituent base.
For context, the United States government still runs a special railroad retirement insurance program, as if it is still 1915. I can assure you that the number of constituents for the Railroad Retirement Board is much fewer than 6 million people, yet the program remains in place–99 years after it was established as part of Woodrow Wilson’s courtship with industrial workers in advance of the 1916 presidential campaign. (Yes, we are still paying the price for Wilson’s 600,000 vote margin over Charles Evans Hughes!).
What does this mean going forward for the politics of the law? Unlike Medicare and Social Security, Obamacare creates clear winners and clear losers. Of course, people end up losing in the deals in Medicare and Social Security (e.g. a person who has worked his whole life but dies at the age of 59 and thus never collects), but such people are never actually aware of the loss. Obamacare losers know that they have been made worse off, just as its winners know that they have been made better off.
Losers in the schema include people whose new insurance is more expensive or otherwise less satisfactory because of the new regulations, seniors whose Medicare Advantage program will be peeled back (or whose local hospital stops taking them because of cuts to Part A), businesses who cannot afford the mandates, people who lose their employer insurance as a consequence of the new business mandates, young and health people who, and others. Importantly, the administration’s delays speak to the potential coalition of the losers, as almost all of them have been designed to keep these groups from realizing the harm they are due to suffer before the 2014 midterm election.
Two inferences to be drawn from this, one moral and one political.
The moral inference: Shame on the Democrats and the left for setting up Obamacare this way. The people who are losers in this schema have long been protected by both sides in an unwritten political agreement, which vouches that the only people the government “takes” from are those with plenty to spare. The rule was: you do not redistribute money and security away from the middle class to accomplish some policy objective. The Democrats broke this rule, largely out of cowardice. They wanted to hide the trust costs of the legislation. Rather than put together a straightforward tax that hit everybody equally (like the Social Security tax), they created a convoluted system to fund the program, such that people whose premiums have gone up are paying an implicit tax, one that happens not to be collected by the government.
