The Spectacle Blog

Obamacare’s Most Dangerous Saboteur: Obamacare

By on 10.18.13 | 4:03PM

The rollout of the Obamacare exchange website (because right now talking about that is more gratifying than talking about the shutdown) has been universally regarded as a failure. The latest in this cyber-car crash is that the site is sending insurance companies duplicate sign-up forms, making it tough to determine how many people have actually enrolled.

At best, there are only 20,000 enrollees so far out of 17 million visitors, thanks to a repellant combination of glitches and sticker shock. Phil Klein makes an excellent point about how these initial failures could have long-term consequences for the law:

The success of Obamacare hinges on the exchanges being able to enroll enough young and healthy individuals to offset the cost of covering older and sicker patients, particularly those with pre-existing conditions.

Given that Americans with higher medical costs are more likely to endure an arduous enrollment process than healthier individuals, sustained technological problems could be devastating to the program.

Right now, there isn’t enough data available to say whether insurers are achieving the right mix of enrollees. In the past, administration officials have said that roughly 40 percent of the expected seven million enrollees need to be from the young and healthy demographic.

Even if we assume that 40 percent proportion is being met, that still means only 8,000 young people have signed up out of the needed 2.7 million. But as Phil says, such a youth enrollment rate is highly unlikely. Someone with a preexisting condition who requires frequent and expensive medical care will spend hours navigating an online thicket to get health insurance; someone who's young and rarely goes to the doctor won't.

In addition to the time disincentive, there's also the price disincentive. Next year, the fee for a young person who doesn't buy health insurance is $95 per person—and that's assuming the IRS decides it's in a punitive mood. The fee does rise to $695 by 2016, but it's still cheaper than paying for health insurance that costs hundreds of dollars per month. And all this is assuming that Congress doesn't compel the Obama administration to delay the individual mandate.

Democrats have been caterwauling that some conservatives are trying to depress youth enrollment and sabotage Obamacare. Turns out Obamacare is doing a perfectly good job of sabotaging itself, thank you very much.

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