Obama's Bet On Healthcare.gov Has Gone Bust
But the president also knew that many Americans who discovered their policies were cancelled would find new ones that offered more comprehensive coverage for a lower price.
Their anger would melt away as soon as they saw their new options. Some Americans would have to pay more for worse coverage and they certainly would be angry, but that would only be a small subset of the individual health care market. It wouldn't be enough to seriously hurt him or Obamacare. That was the bet the president made.
The latest announcement reveals that it's quickly going bust.
The administrative fix the president unveiled allows insurers to continue offering health plans to current beneficiaries through 2014. Insurers are not required to do so and state insurance commissioners must still approve all the plans. It's unclear whether insurers have the technical ability to un-cancel plans and how many will actually take up the president's offer.
Whether or not this plan is technically feasible or insurers will actually un-cancel plans, Obama would never have had to make this fix if the website worked. There would still be millions of people with cancellation notices, but they would have had plenty of new choices to look through. The president admitted this last week in his apology.
"Keep in mind that most of the folks who are going to- who got these c- cancellation letters, they'll be able to get better care at the same cost or cheaper in these new marketplaces," he said. "Because they'll have more choice. They'll have more competition. They're part of a bigger pool. Insurance companies are going to be hungry for their business.So- the majority of folks will end up being better off, of course, because the website's not working right. They don't necessarily know it right [now]."
The president always planned to break his promise. He just didn't plan to do so with a systematically flawed website that won't work seven weeks after launch.
Years ago, Obama probably didn't think this was a risky bet. He had recently run the most high tech campaign ever. There was every reason to believe that his administration was eminently capable of setting up the federal exchange. In his announcement yesterday, Obama stated this clearly.
"I think it's fair to say that we have a pretty good track record of working with folks on technology and IT from our campaign, where, both in 2008 and 2012, we did a pretty darn good job on that." he said. "What is true is that, as I said before, our IT systems, how we purchase technology in the federal government is cumbersome, complicated and outdated."
Later he added: "When I do some Monday morning quarterbacking on myself one of the things that I do recognize is since I know that the federal government has not been good at this stuff in the past, two years ago as we were thinking about this, you know, we might have done more to make sure that we were breaking the mold on how we were going to be setting this up. But that doesn't help us now. We got to move forward."
The latest fix, which has left insurers furious and health policy wonks wondering how it will affect the law, was necessary, because Obama bet that the government was capable of setting up Healthcare.gov. If the administration eventually gets the site working, this will all be forgotten and the outcome of law will be determined on its merits. Right now though, that bet isn't looking very good.