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Surprise: White House Has Known Obamacare Implementation Would Collapse For Months

Four weeks ago, President Obama delivered a speech in San Jose, California touting the supposed benefits of his signature healthcare law.  For 85 percent of Americans, he claimed, the only change they'll experience is superior coverage.  For virtually everyone else, there will be competitive exchanges in place starting next year, from which they'll be able to select affordable coverage.  And if some people still aren't able to pay those new, lower rates, the government would step in with subsidies to make up the difference.  Needless to say, his promises were deeply misleading at the time: Premiums were already heading north for millions of Americans, and many of those exchanges were already well behind schedule -- to say nothing of layoffs, reduced hours, or targeted dumping.  What we now know that even as the president laid out this sunny vision in San Jose, he was already well aware that key pieces of his law would not be ready by the legally-required implementation date, throwing several wrenches into the seamless operation he was describing for public consumption. Here's what he left out of his prepared remarks on June 7:


If you've been reading all the Obamacare stories lately, you might get the impression that the administration has just realized it will not be able to implement the massive health reform as designed. It has known for months. As far back as March, a top IT official at the Department of Health and Human Services said the department's current ambition for the law's new online insurance marketplaces was that they not be "a Third-World experience." Several provisions had already been abandoned in an effort to simplify the administration's task and maximize the chances that the new systems would be ready to go live in October, when customers are supposed to start signing up for insurance. In April, several consultants focusing on the new online marketplaces, known as exchanges, told National Journal that the idealized, seamless user experience initially envisioned under the Affordable Care Act was no longer possible, as the administration axed non-essential provisions that were too complex to implement in time. That focus has intensified lately, as officials announced that they would not be requiring employers to cover their workers next year or states to verify residents' incomes before signing them up for insurance. "There's been a focusing in not on: 'What is the full ACA vision?' but: 'What are the pieces we have to get running by October 1?" said Cindy Gillespie, senior managing director at McKenna Long and Aldridge, who is working with states and health plans.


Guess what?  We've known for months, too, even as administration denied it until they were blue in the face.  "Eighty-five percent" of Americans don't believe everything will stay the same or improve under the new law, nor should they.  The law is crashing under its own weight, which may explain why a sizable majority of the public would prefer to turn back the clock on Obamacare.  Remember, Democrats will have had four years to get their law ready for prime time, and will have failed.  But by all means, let's entrust them with new, sweeping legislative designs.  Check out the quote in bold above.  Evidently, those must-have pieces include neither the promised exchange for small businesses, nor the promised requirement that medium and large-sized employers offer "affordable" (a relative term) plans to their workers.  The White House has also revealed as non-essential the basic requirement that functioning exchanges must include active anti-fraud measures to prevent ineligible people from receiving undue and expensive subsidies.  The National Journal piece forecasts more unannounced glitches, delays, waivers and changes.  That easy prediction is already being proven right; indeed, a few more emerged just today.  Bloomberg reports on a new study indicating that Obamacare's huge expansion of Medicaid -- a totally broken program -- will create two tiers of care, with current recipients (many of the very poorest among us) getting a worse deal than newer, less needy enrollees.  The Associated Press flags another snafu:


In yet another health care overhaul delay, the administration has quietly notified insurers that a computer system problem will limit penalties that the law says the companies may charge smokers. A fix will take at least a year.  

Oops!  Time to unilaterally re-write another part of the law while ignoring its black-and-white implementation mandates, it seems.  While Obama's busy erasing, John Boehner wants to know why the White House won't extend the same delay courtesy to small businesses, families, and individuals as they have to larger businesses.  Hit that individual mandate tax hard, Mr. Speaker.  It has been -- and remains -- really, really unpopular:

Allahpundit thinks Boehner should invert his messaging here.  Begin with Obama throwing open the floodgates to rampant fraud and cheating on the subsidies front, then pound away at the individual mandate tax.  That might be a slightly more effective strategy, but Boehner covers both during his short statement.  He's also vowing to hold more repeal votes, which may place vulnerable Democrats in a terrible bind.  Do they maintain their lockstep support of a law that's falling apart in a very public an embarrassing way, or do they try to save their own skin by signing on to targeted Republican efforts to roll back and delay the most problematic elements of the law?  Will they at least postpone the hated mandate tax, and keep the IRS out of Americans' healthcare for another year or more?  If not, why not?  (Republicans should mention the IRS element as often as possible).  As Yuval Levin has written, widespread delays may be the only remaining path to eventual repeal.  To that end, GOP leaders should force votes on delaying the individual mandate for at least a year, and they should absolutely adopt Phil Klein's populist, anti-fraud proposal:


Under the gun to get the exchanges up and running by the Oct. 1 deadline, HHS decided to substantially weaken the requirements and rely increasingly on applicants’ personal claims about their income level and insurance status, thus increasing the likelihood of fraud. If Republicans were smart, they’d draft a bill based on the following mantra: “No Subsidization Without Verification.” That is, they should take a stand that nobody can receive subsidies through Obamacare before the government has a system in place that can independently verify the information as accurate.

If Democrats resist such a plan, let them explain to taxpayers why they need to shovel billions of dollars in subsidies to people who may not even qualify for them.  It's the poster child of waste, fraud and abuse, and it's easily understood by average voters.  I'll leave you with this brilliant piece by Phil Kerpen, who imagines what the news coverage would look like if President Romney were the one who is unilaterally delaying and waiving major segments of Obamacare.  One small morsel:

"[An] umbrella advocacy group, several major national labor unions, and 14 smaller advocacy groups filed a lawsuit last week in the D.C. Circuit seeking an emergency injunction forcing the Romney administration to enforce the law.  The groups are also staging a 24-7 protest in Lafayette Square across from the White House under a large banner reading: “Romney Is Not Above the Law.” 

Pitch perfect.

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