Friday, December 20, 2013

We're Witnessing the #ObamaCare Death Spiral in Real-Time

As always, the editors at the Wall Street Journal have nailed the administration's deceit and incompetence. See, "Obama Repeals ObamaCare."

Read the whole thing, but note especially these two paragraphs:
The only political explanation for relaxing enforcement of the individual mandate—even at the risk of destabilizing ObamaCare in the long term—is that the White House is panicked that the whole entitlement is endangered. The insurance terminations and rollout fiasco could leave more people uninsured in 2014 than in 2013. ObamaCare's unpopularity with the public could cost Democrats the Senate in 2014, and a GOP Congress in 2015 could compel the White House to reopen the law and make major changes.

Republicans ought to prepare for that eventuality with insurance reforms beyond the "repeal" slogan, but they can also take some vindication in Thursday's reversal. Mr. Obama's actions are as damning about ObamaCare as anything Senator Ted Cruz has said, and they implicitly confirm that the law is quarter-baked and harmful. Mr. Obama is doing through executive fiat what Republicans shut down the government to get him to do.
And as noted earlier, this latest "fix" creates huge incentives for individuals to avoid buying health insurance (and some of the already uninsured may create fake cancellation documents to take advantage of the changes), and thus we're really watching the opening moments of the much-predicted ObamaCare death spiral. See also Megan McArdle, at Bloomberg, "Obamacare Initiates Self-Destruction Sequence":
I’m not sure the administration is thinking that far ahead. The White House is focused on winning the news cycle, day by day, not the kind of detached technocratic policymaking that they, and the law’s other supporters, hoped this law would embody. Does your fix create problems later, cause costs to spiral or people to drop out of the insurance market, or lead to political pressure to expand the fixes in ways that critically undermine the law? Well, that’s preferable to sudden death right now.

However incoherent these fixes may seem, they send two messages, loud and clear. The first is that although liberal pundits may think that the law is a done deal, impossible to repeal, the administration does not believe that. The willingness to take large risks with the program’s stability indicates that the administration thinks it has a huge amount to lose -- that the White House is in a battle for the program’s very existence, not a few marginal House and Senate seats.

And the second is that enrollment probably isn’t what the administration was hoping. I don’t know that we’ll start Jan. 1 with fewer people insured than we had a year ago, but this certainly shouldn’t make us optimistic. It’s not like people who lost their insurance due to Obamacare, and now can’t afford to replace their policy, are going to be happy that they’re exempted from the mandate; they’re still going to be pretty mad. This is at best, damage control. Which suggests that the administration is expecting a fair amount of damage.
Still more at that top link (via Memeorandum).

The ObamaCare death spiral occurs when so few young people sign up for insurance that the system's structure of subsidies for older, less healthy consumers fails to operate correctly. This is why the Wall Street Journal argues, among others, that last night's "fix" will only cause insurance companies to jack up rates to cover losses. (And as McArdle notes, insurance companies will be even more entitled to a government bailout on their losses through the law's "risk corridors"). Folks have been warning about this "death spiral" for months.

It's still early, of course. But no doubt the White House is utterly panicked. It's a virtually certainly that more changes will be unveiled, perhaps more deadlines pushed back to minimize the Democrats' political losses next year. But by now only the most hackneyed ideological reprobates are defending the law anymore. Democrats can't run away from it fast enough and across the netroots regressive leftists are whining about how all they really wanted was "single-payer" (socialized medicine) in the first place. These people are idiots and moral retards. They deserve the political backlash now hammering them on the heads, and all the more that's likely over the next year. Screw 'em. God willing, the voters will crush the radical left for a generation or more.