Beta Tester Revolt

“[W]hat we’re also discovering is that insurance is complicated to buy.”
—President Barack Obama, 14 November 2013

I happened to hear last week another in the seemingly endless stream of news reports on Obamacare. It was on National Public Radio and was about a White House promotion that stated that half of people under the age of 35 could get health care for $50 a month or less. As NPR reported, the government’s own numbers say that the number of people who could get insurance that cheap is actually 32 percent.

The most interesting part of the NPR piece was the reporter Chris Arnold’s somewhat blasé summation of the government’s misleading message: “So in other words, it’s like any other marketing campaign. All the pitches aren’t exactly entirely true but they get your attention.”

In a roundabout way, this highlights a fundamental problem that conservatives and libertarians have with the Affordable Care Act. If a major corporation ran high-profile advertisements that were as patently false as the above promotion or the infamous “If you like your insurance, you can keep it” assurances, it would face penalties for fraud. But who protects consumers from fraud when it’s the government committing the fraud?

Normally, that role would fall to the press, but the most pervasive media outlets seem to be acting as surprised as anyone that it has turned out that millions of people cannot keep their insurance policies.

I’ll confess to being taken aback by the furor over the canceled policies. I never considered President Obama’s repeated “If you like your insurance, you can keep it” assertion a lie because it was always so obviously untrue that I assumed no one actually took it seriously. It’s one of those falsehoods where the fault should lie with anyone clueless enough to believe it rather than with the person actually saying it. People have never had any guarantee they could keep their insurance, and nothing in the new healthcare law did anything to change that. In fact, the whole point of the law was to change the system. As NPR’s Mara Liasson cogently describes the law, it was specifically designed to be a disruptor.

But that “If you like your insurance, you can keep it” line apparently served its purpose. The vast majority of Americans, who had insurance and were reasonably happy with it, tuned out, assuming that the new law had absolutely nothing to do with them. They thought it was only about providing health care to those who did not already have it.

One of the questions we kept hearing when the healthcare.gov website bombed so badly was, why on earth didn’t they test it before rolling it out? The obvious answer is that it is being tested—now. A general principle that I remember from my days in the software business was that responsible companies do not use their paying customers as beta testers. But the fact is that insurance consumers in the individual market are now beta testers—not just for the website but for the new healthcare system in general.

Remember, originally the new system was meant to roll out for the entire insurance market on October 1. But, in a move that some argue was illegal since it changed the healthcare law without congressional action, the administration decided to delay the implementation of the new system for people who get their insurance through their employer. If not for that, we would be talking about complaints from across the entire insurance market—not just those in the relatively small individual market.

As I’ve said before, the anecdotal reports of people having their policies canceled or having to pay higher rates are not even the real problem. The real problem is that the new system is virtually designed to raise the costs of medical care and will inevitably be a drain on the government budget—on top of Medicare and Social Security, which are already on trajectories toward insolvency.

The trouble with anecdotes is that they can distort things and do not necessarily reflect the larger truth. But we pay attention to anecdotes because we can relate to people’s individual stories more easily than to reams of statistics.

The individual case that has made the biggest impression on me is that of Daily Beast columnist Kirsten Powers. Her comments may be discounted by Obama’s true believers because one of her jobs is as one of Fox News’s token liberal pundits. But she is a Democrat, a consistent Obama supporter and a veteran of the Clinton Administration, and she has gamely defended Obamacare all along, while conceding that she would have preferred a single-payer system. So it was a bit of a stunner when she went off on a rant about losing her own insurance policy canceled.

“If I want to keep the same health insurance, it’s going to cost twice as much,” she said. “There’s nothing substandard about my plan… All of the things they say that are not in my plan are in my plan, all of the things they have listed. There’s no explanation for the doubling of my premiums other than the fact that it’s subsidizing other people.”

But that was always clear—at least to me. That was always the idea of Obamacare: require everyone to buy insurance, subsidize those in the lower income brackets, and highly regulate the industry to spread out the costs.

Why is everyone acting so surprised?