Obamacare is Imploding and Democrats are Panicking

Conservatives knew that Obamacare was going to face its fair share of troubles. After all, we understand that big government is not very good at doing much of anything, and is absolutely terrible at attempting to do big things. But nobody that I know of expected things to go this bad, this quickly.

What we expected was that Obamacare’s numerous new mandates would raise insurance premiums, especially for young adults. Based on news coverage throughout the summer, we also anticipated that the federal government not be ready to launch the crucial exchange website by October. Those are big problems, especially for conservatives who are especially attuned to the law’s impact on the deficit, the size of government, and the growth of health care costs.

But now, less than two months into the Obamacare rollout, the problems are much bigger than that. Democrats, whether they know it or not, are smack dab in the middle of a four-alarm firestorm that is only going to get worse.

The problem is that problems build upon one another. A balky website is a big, but fixable problem. But mounting frustrations with the system deter young, healthy, and admittedly impatient people from signing up for coverage in the exchanges. Without those folks to subsidize the cost of everyone else the pool of insured begins to look much older, sicker, and more expensive. That, in turn, increases the anxiety of insurance companies who will be forced to come back next year and raise premiums even more.

As if that wasn’t enough, President Obama has manufactured his own health care crisis by making an irresponsible promise that he was never going to be able to keep. No matter how many times he argued the contrary, Obamacare was specifically written so that people would not be able to keep their previous insurance policies.

Adding multiple new mandates (like requiring elderly women to carry maternity coverage) that weren’t required before had two effects: First, it eliminated insurers’ ability to tailor plans to the needs of particular consumers, and second, it increased the cost of the plan. And since price increases caused plans to lose their “grandfathered” status under the law, Obamacare, either directly or indirectly was going to cause almost every insurance plan to be canceled.

This, more than anything else so far, has thrown Democrats into a disorganized panic. President Obama offered an oblique apology coupled with a vague promise to fix it. Then the explainer-in-chief, Bill Clinton, offered his two cents.

“Even if it takes a chance to the law, the president should honor the commitment the federal government made to those people and let them keep what they’ve got,” Clinton said in an interview with the online magazine Ozy.

This is exactly what the White House didn’t want. They’ve been doing their absolute best to tamp down any internal disagreements within their own party ranks. Unfortunately, that hasn’t been going so well. CNN reports:

A private meeting on Capitol Hill with House Democrats and White House officials on Wednesday became heated when rank-and-file members expressed frustration about continued Obamacare problems, according to multiple sources in the room.

One congressional Democrat who attended the meeting said senior Obama administration officials Mike Hash and David Simas really “got hit” by House Democrats about everything from the troubled website to the broken presidential promise that people can keep the insurance plans they like.

The most troubling evidence of that political schism is Sen. Mary Landrieu’s (D-LA) “Keeping the Affordable Care Act Promise Act” which is cosponsored by blue-state, left-leaning liberal Jeff Merkley.

“When we passed the Affordable Care Act, we did so with the intention that if you like your health plan, you could keep it,” Landrieu said on the Senate floor. “A promise was made and this legislation will ensure that this promise is kept.”

The problem is that in trying to fix this political problem, they risk undermining the entire policy foundation that they build Obamacare on top of. That’s because millions of people who would of otherwise been thrown into the Obamacare exchanges may instead choose to stick with their cheaper, leaner insurance plans. Since people making that choice are likely to be younger and healthier, President Obama faces the exact same adverse selection spiral that the failed website may cause.

Conservatives are left to just sit back and watch the law implode. We expected an exorbitantly expensive takeover of the insurance market that may gradually undermine economic incentives enough for the law to fail. We could have never predicted the synergy of ham-fisted politics and bureaucratic ineptitude would cause the bill to crumble just months after passage. Make a note friends…conservatives were actually overly optimistic on the Obama Administration’s ability to implement a law that carries its name.