Obamacare Is Disappearing

Like old soldiers, Obamacare may never die. It may just fade away. Certainly each of its provisions is shrinking before our eyes.

The most obvious evidence of its vanishing is the dismal enrollment data. With only 106,000 people signing up by mid-November, it risks becoming a trivial footnote to the health care landscape.

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While the glitch-plagued federal exchange has an excuse for its pathetic total of 26,000 enrollees, the state exchanges appear to have worked reasonably well but produced only 79,000 more. With about a quarter of the country using state exchanges, one can assume that had the entire country been relatively glitch-free, about 300,000 would have signed up in the first six weeks of the program’s 26-week enrollment period. Projecting out over the entire period, we reach fewer than 1.5 million enrollments nationally, a ridiculously low figure.

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With Medicare enrolling 46 million, Medicaid reaching over 100 million with the new expansion, and even the State Children’s Health Insurance Program for children topping 7 million, it’s hard to take seriously a program that has so limited an enrollment.

The bill’s requirement for minimum levels of health insurance coverage wanes by the day as President Obama waives it for a year for pre-existing policies and the House votes to repeal it entirely. With 20 percent of the House Democrats voting to grandfather in policies permanently, the odds are that marginal Senate Democrats will force passage of something akin to the Landrieu bill barring insurance companies from canceling policies in perpetuity.

Nor are the so-called “death panels” doing much better. The Independent Payment Advisory Board, scheduled to go into operation next year, has yet to be appointed much less confirmed. Nor is it likely ever to meet. The Board’s mission is to force reductions in Medicare spending to bring the program into line with budgetary guidelines. But the low rate of medical inflation is vitiating its purpose. Most health economists estimate that Medicare costs, per capita, will rise only at about the rate of GDP growth or less. One expert suggests a likely rate of increase of only 0.5 percent for this year.

At such a low rate of Medicare growth, the IPAB provisions would not kick in. The Board would not be called upon to impose any cuts. Health economists predict a continuing low rate of medical inflation, suggesting that the board might become an anachronistic appendage of a once massive legislative edifice, likely facing repeal when the statute permits it in 2017.

The employer mandate has already been delayed by the president’s action.

The individual mandate has fines so token as to make a mockery of the idea that there even is mandate. How are fines of one percent of income, rising to 2.5 percent, going to induce people to spend 9.5 percent of their income on policies they don’t want?

And the fines themselves are not likely to be enforced with any rigor. The IRS is barred by statute from seizing bank accounts or property to collect the fines and may only move to take income tax overpayments from those who fail to pay the fine.

Lacking the coercion of cancellations or fines, the Obamacare population will, remain small and will include mainly very needy people. This process of adverse selection will drive up premiums until they drive out the young and the healthy. Soon we will be left with a slightly larger pool of high risk patients than are already covered in state and federal pools.

So all that will be left are some very good consumer protection insurance reforms requiring coverage of pre-existing conditions and a ban on cancellation or premium hikes in the event of illness.

Beyond that, there will be a vestigial administrative superstructure erected to run a massive, national health care system for which only 1.5 million people participate showed up. Like a monument in the desert, it will gather sand and erode over time. Obama’s legacy.

Also see,

Obama’s Hope: Cancellations Will Continue

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