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Bloomberg: Despite disastrous debut, Obamacare will succeed in end

Published October 26, 2013 1:01 am

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This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Obamacare is in trouble. The federal website for buying insurance is a disaster, half the states have refused to expand Medicaid, and whether the whole thing will actually save money is still uncertain.

Big as these problems are, however, the project's potential value is as great as ever, and its odds of success remain high. Bet against it at your peril.

Let's remember why this project was undertaken in the first place. The Patient Protection and Affordable Care Act is the United States' only plausible shot at providing health insurance for all its citizens — something that voters in other advanced economies have long taken entirely for granted.

The status quo is absurdly expensive and outrageously unfair.

Changing this is a colossal task that was never going to be easy. Acknowledging this doesn't excuse the surprising incompetence of President Barack Obama's administration in preparing for the rollout of the insurance exchanges: Nonetheless, the purposes and basic design of the reform effort remain as valid as before, as time will prove.

People who decide not to use the exchanges to buy insurance for 2014 can still do so in future years. The Congressional Budget Office has already assumed that use of the exchanges will almost double in the law's second year, and then double again the year after. One year of lower-than-projected enrollment won't break the system.

A more serious question for the long run is how well the exchanges will succeed at bringing down costs. The law's opponents have predicted "rate shock" by using a false comparison: between the cost of individual policies from the days when insurers could discriminate based on people's health and what they cost on the exchanges now that nobody can be denied.

What matters is whether insurers are able to offer policies on the exchanges at prices people are willing to pay, after accounting for federal subsidies. As insurers conclude that the law is here to stay, more will offer exchange-based plans, increasing competition and driving prices down.

The most pressing issue for Obamacare is to persuade more states to expand their Medicaid programs to all those with incomes up to 138 percent of the federal poverty line, a crucial part of the law that last year's Supreme Court ruling made optional. Far-reaching reform is often slow and painful. This one is worth the effort, and in time, it will succeed.




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