The Right Prescription

Keller-Matthews Permanente

Obamacare apologists insist launch failure is testament to unanticipated runaway demand.

By 10.17.13

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On the latest episode of Real Time with Bill Maher, guest Chris Matthews tried to spin the bungled debut of Obamacare as — no, really — a triumphant confirmation of market enthusiasm for the low-cost coverage newly available through the law’s vaunted health insurance exchanges.

On Monday, the garrulous host of MSNBC’s Hardball found an eager battery mate in New York Times columnist Bill Keller.

“Unless you’ve been bamboozled by the frantic fictions of the right wing, you know that the Affordable Care Act, familiarly known as Obamacare, has begun to accomplish its first goal: enrolling millions of uninsured Americans,” opined the former executive editor of the New York Times in full populist cry. “You realize those computer failures that have hampered sign-ups in the early days — to the smug delight of critics — confirm that there is enormous popular demand.” (Populists who tell you what you think. Only at the New York Times — right?)

It’s official. Bragging à la Matthews and Keller about runaway demand making Obamacare a (temporary) victim of its own unanticipated success has emerged as the favored meme of shills for the President’s defining domestic policy initiative.

And when you look at their alternatives, can you blame them?

Confronted with epic and self-evident failure on the scale of the Obamacare rollout, denial is not an option. Denial wasn’t an option before the October 1 launch. That’s why President Obama, HHS Secretary Kathleen Sebelius, and others had already begun trying to ratchet down expectations by conceding the inevitability of early “glitches.”

But at this point, even the modified, limited, euphemized hang-out — “glitches?” — doesn’t pass the laugh test.

The most visible symbol of Obamacare’s troubled launch has been its signature website, healthcare.gov, built at a reported cost to taxpayers of $500 million.

“This is more than LinkedIn, Facebook, Twitter, Instagram and Spotify,” wrote Tom Bevan at Real Clear Politics, “and yet it has been a disaster from the get-go, freezing, crashing, and locking people out.”

“Glitches?” Right. And The Lone Ranger had a few “kinks” that needed to be ironed out, the New York Giants have hit a few early-season “bumps in the road,” and the Articles of Confederation suffered from “growing pains.”

The scathing reviews for Obamacare’s temperamental web portal have come from across the board — users, pols, and IT pros alike. Even the President’s ever-loyal blogger-savant Ezra Klein admitted the website was a “disaster.”

If Democratic supporters of Obamacare can’t deny its failed launch, perhaps they could try to… relativize it? Put it in some perspective? After all, the task these reformers have set themselves — devising, pricing, marketing, means-testing, subsidizing, regulating, and policing insurance options for tens of millions of people, mostly from the top down — is one of unprecedented, perhaps prohibitive, scope, scale, complexity, and uncertainty.

One problem with that line. If Democratic supporters of Obamacare thought their reform dream was one of unprecedented, perhaps, prohibitive scope, scale, complexity, and uncertainty, they’d likely be Republican opponents of Obamacare.

Unable to credibly deny, euphemize, or rationalize Obamacare’s nightmarish debut, brazenly redefining debacle as triumph must have seemed like it was worth a shot to rear guard defenders. Enter the intrepid Chris Matthews.

Brushing aside the almost uniformly critical reception that greeted the rollout as “crazy,” a peremptory Matthews — is there any other kind? — likened the launch of healthcare.gov to the market euphoria that fuels runaway demand for a must-have new tech device or killer app:

“When Apple comes out with a product and they can’t handle the orders because there’s so many people asking to come aboard, it’s a success, OK?”

As a technical matter, the claim that the Obamacare site has been a victim of its own dizzying success has been dismissed by programmers, who’ve said, reports Bevan, “the site was so poorly constructed, so full of glitches and buggy code that it could never have supported even the most modest traffic levels.”

But while the “runaway success” defense is factually baseless, don’t get hung up on that. The fact that it’s false is in a way the best that might be said for it.

The overt claim of the Keller-Matthews Defense is that site traffic at healthcare.gov represented unmanageably high demand for Obamacare. That’s merely wrong. But its hidden premise is that unmanageably high site traffic would have represented… demand. And that’s worse than wrong; it’s absurd.

Think about it. The “demand” for Obamacare gold, silver, and bronze plans is not a spontaneous market response to Olympic-medal-worthy new insurance products. The “demand” for the policies comes from uninsured individuals who are now legally compelled to purchase insurance — or pay a fine under the plan’s “individual mandate,” the linchpin of Obamacare’s funding scheme.

In theory, those herded into this new “market” for individual insurance can obtain it outside Obamacare’s public/private exchanges, from, well, private/private insurers. But why would they do so, when it means forfeiting their eligibility for individual subsidies under Obamacare?

In reality, the “demand” for insurance through the Obama exchanges has, of course, been centrally engineered through a combination of legal coercion and the lure of subsidized rates that a coercively enlarged market makes possible.

The runaway “demand” that’s purportedly crashing Obamacare’s pricey web portal is, in other words, manufactured from a unique “synergy” of threats and unfair competition of a kind that would land a private insurer behind bars or on the wrong end of an antitrust suit.

And, of course, the reason the purchase of health insurance is now compulsory for the previously uninsured is precisely because in the open, voluntary marketplace there was previously no demand for it. Put it this way: The uncontainably vast market for Obamacare insurance products trumpeted by Keller-Matthews et al. is not an effect of consumer demand — runaway or otherwise. On the contrary, the weakness of consumer demand for such insurance products is the cause of Obamacare’s manufactured markets.

So you see, Chris, the “demand” for insurance through the Obamacare exchanges is really nothing like the voluntary demand surge for a new-model iPhone. And bragging of the demand spike for Obamacare insurance among the healthy, young uninsured is more like a Mafia enforcer bragging about surging “demand” for “protection” among small shopkeepers.

No — federally mandated insurance purchases, enforced through legal penalties for non-compliance, are more like, well, a tax. Strike that; the Obamacare mandate isn’t like a tax; it is a de facto tax. And, come to think of it, it is also — thank you, Justice Roberts — a de jure tax, as defined by the highest court in the land.

If, after three and a half years and half a billion dollars (just to launch), Keller-Matthews Permanente wants to celebrate Obamacare as an unparalleled marvel of… tax compliance, well — knock yourselves out, guys. And while you're tallying up visits to healthcare.gov, ask yourselves this: If Steve Jobs could have fined his customers for failing to buy his products, would he ever have bothered to develop iPods, iPads, and iPhones in the first place?

Nah. Chances are he'd still be in his parents' garage with Steve Wozniak. The same place many healthy, young newly insured may find themselves living once they see their bills for the Obamacare they've been "demanding."

Photo: UPI

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About the Author

Daniel Wattenberg is a writer and editor living in Washington.