Morning Must Read: Insiders, Outsiders, and ObamaCare, from the Economist’s Democracy in America

The Economist’s Democracy in America has this morning’s policy must-read: Health care in America: An insider-outsider problem:

THE hopeless, hapless launch of Obamacare…. There is a lot that can be said (and is being said) about the president’s management skills, and how the administration did not see this coming…. Obamacare was always going to be a hard sell because it is an attempt to fix an insider-outsider problem. At root, its supporters do not think it right for a country as rich as America to be home to tens of millions of people who do not have health coverage, or who have such skimpy insurance that they risk financial ruin if they fall gravely ill….

That is a powerful argument. But it is politically perilous, because in a world of finite resources outsiders can only be helped by asking insiders to share…. Republicans get this…. Republicans have focused on appeals to today’s insiders: warning them that they will be worse off once Obamacare is in force. Those appeals work, because there is something to them…. Democrats knew the dangers, but ploughed on for a series of reasons, some of them altruistic, and some of them more political (eg, they sincerely want to help outsiders, and many of those outsiders are their voters).

But there was a third reason. Supporters of Obamacare believed that their opponents were misreading the American population and its balance of health-care outsiders and insiders. They looked at millions of Americans on cheap or cheap-ish health plans bought on the individual market… [brought] into health exchanges under Obamacare… [would] discover that they qualify for new subsidies (turning them into happy insiders) and some of them will gain better health coverage for not much more money…. Alas, this third reason to plough on did expose Team Obama to a timing problem….

That explains Mr Obama’s lethal, pre-election dancing around the truth, when he said that anybody who liked their current plan could keep it. What he meant was: anyone with a plan that a rational person would like will get to keep that plan. That seemed a safe enough promise…. That has now come back to bite them. Hence today’s panicked announcement… an admission that Team Obama misread the balance of outsiders and insiders….

A last irony. The plan, of course, was for those with cancelled plans to hop onto the Obamacare websites and discover that they were, in fact, insiders in the new system. But the website is not working. Mr Obama’s team does not have long to turn this round.

November 15, 2013

Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch