FOR the past few weeks Barack Obama has been flayed with headlines like “Unmitigated disaster” and “Barack Hussein Bush”. A worrying 55% of Americans disapprove of the job he is doing; only 42% approve. Voters are gobsmacked at how badly he has bungled his health reform.
Joe Biden once called Obamacare a “big fucking deal”. The law still inspires expletives, but in a rather different tone of voice. The federal website through which Americans in 36 states are supposed to buy health insurance, and which opened with great fanfare on October 1st, is still riddled with problems. On November 19th Henry Chao, a senior health official, told Congress that about 30% of it had yet to be developed. Some 57% of Americans now say they oppose Obamacare, a new high.
It is still hard to sign up for insurance, thanks to myriad technical glitches. In the first month, just 26,794 people chose policies through the federal exchange. In the exchanges run by states, which have fewer gremlins, 79,391 signed up. Nearly 50m Americans lack health insurance; the White House had hoped that 7m would sign up in the first year.
Revelation after revelation suggests that Obamacare’s awful first month reflects awful planning. McKinsey & Company, a consultancy, warned health officials that the federal exchange lacked “a single empowered decision-making authority”. That is consultant-speak for having no one in charge.
On November 14th Mr Obama said: “I feel deeply responsible” for making it harder for Democrats “to promote the core values that I think led them to support this thing in the first place.” The next day 39 Democrats voted for a Republican bill that would essentially gut health reform. That bill will never become law—Mr Obama says he would veto it. But the vote was a sign of the Democrats’ anxiety. A gleeful Republican National Committee has invited Democrats in vulnerable seats to pose before a banner that reads: “Eager and Proud to Run on ObamaCare in 2014”.
Mr Obama needs to fix his reform or risk scuppering his second term; (not to mention throwing America’s $2.8 trillion health-care industry into turmoil). This is not impossible, but it is unclear when, or whether, he will be able to do so.
There are two immediate crises. One is the viability of the exchanges. The law bars insurers from rejecting sick patients or charging them higher prices. Officials have yet to reveal what kind of people are signing up on the federal exchange, but it is likely that those who are already ill are the most persistent shoppers. If a disproportionate share of sick folk enroll in 2014, insurers will raise prices for the following year. This could make the healthy even less likely to sign up. Just possibly, this could spark a dreaded “death spiral” of soaring premiums and tumbling enrolment.
In Obamacare’s second crisis, many Americans have received letters telling them that their current insurance is being cancelled. Because the law requires insurers to cover certain services and forbids them to raise prices for the sick, wonks always knew that it would prompt insurers to end meagre, discriminatory plans—that was the point. To ordinary Americans, however, the cancellations were a nasty surprise. Mr Obama had assured them that if they liked their plans, they could keep them. This promise has proved particularly flimsy for the 12m-odd people on the individual insurance market. It does not help that, as they lose insurance, they are being told to buy coverage on exchanges that barely work. Trust in Mr Obama’s honesty has tumbled (see chart).
In his haste to fix these problems, there is a risk that Mr Obama will make matters worse. On November 14th he said he would let insurers extend cancelled policies by one year. The idea is to undercut more extreme proposals in Congress. Nevertheless his plan is, according to one insurance consultant, “a mammoth pain in the ass”. Mr Obama is shifting responsibility to state insurance commissioners, who must decide whether to allow the extensions, and to insurers, who must decide whether to offer them. Insurers would have to scramble to reinstate cancelled policies, which involves re-jigging software, setting new prices and so on. This must all happen fast if policies are to take effect on January 1st, as planned. Some states and insurers have already said “no”.
A bigger risk is that the “fix” harms the rest of Obamacare. The insurance lobby points out that Mr Obama’s plan will dissuade healthy people from buying more generous, costly coverage on the exchanges. This will leave insurers with a more sickly pool than they expected. That could drive up prices for 2015.
Scalpel, scissors, prayer
How bad this will get depends on how many insurers extend their plans, how many shoppers accept their offer and whether Obamacare’s tools to stabilise insurance prices actually work. Mr Obama’s deputies say they may adjust the law’s “risk corridors”, designed to limit insurers’ gains and losses. Nevertheless, some price increase seems inevitable. And as Tim Jost of Washington and Lee University points out, more controversy will come next year—insurance cancellations will be even more politically touchy in 2014, with the midterm elections.
This makes fixing health reform all the more urgent. With new competition from older, skimpier plans, Mr Obama must make it as easy as possible to sign up for insurance on the exchanges. Jeffrey Zients, a former consultant and budget official, is overseeing the repairs. He says the site should work for the “vast majority” of consumers, but not all, by November 30th.
With luck, more consumers should be able to buy coverage directly from insurers; on November 19th officials said they had made it easier to check shoppers’ eligibility for subsidies. However, each report of progress is accompanied by another problem. Republicans fret that healthcare.gov, the federal website, is not secure enough.
Perhaps the saddest thing about the Obamacare fiasco is that no rich-country health-care system is more in need of reform than America’s. On November 21st the OECD published a report that highlighted America’s staggering health-care costs and mediocre outcomes. Health spending accounts for nearly 18% of GDP, about twice the OECD average, even as 15% of Americans lack insurance. None of this will get easier as the nation ages. Obamacare tries to mend this, but it is a flawed patch placed on a flawed system by a flawed president. He does not have long to clean up the mess.