Obamacare’s problem isn’t just growing pains

The reviews are in for HealthCare.gov, Obamacare’s much-ballyhooed online health insurance marketplace, which launched earlier this month. The government-run exchange is a “disaster,” “really bad,” “a failure,” “terrible” and “an absolute train wreck of a website.”

That’s just what the law’s supporters are saying.

Don’t panic, though, say Obamacare’s defenders: The last big expansion of government-provided health care — the Medicare prescription-drug benefit — had similar growing pains. Eight years later, roughly 35 million Americans participate in the program. Nine in 10 enrollees are satisfied.

Obamacare’s exchanges won’t follow that path. Unlike the drug benefit, Obamacare has the support of only one political party — the president’s. More importantly, though, the law will disrupt the coverage of all Americans. That disruption will be costly and unpopular.

First, some history. In 2003, Congress passed the Medicare Modernization Act, which installed a prescription-drug benefit under Medicare. Enrollment began in 2005 for coverage that took effect in 2006.

At the time, the drug benefit — formally known as Medicare Part D — was less popular than even Obamacare is today. Just 21 percent of Americans had a favorable opinion of Part D in 2005. Obamacare, by contrast, has a comparatively lofty 38 percent approval rating.

But both parties wanted to make Part D work. The legislation enjoyed bipartisan support.

Obamacare, by contrast, was rammed through Congress along party lines. Dubious legislative maneuvering and questionable payoffs to politicians and special interests secured the votes needed for passage. Republicans remain opposed to the law — as does a plurality of ordinary Americans.

Obamacare has also saddled states with massive, unfunded implementation obligations. Thirty-six states bristled at those orders — and refused to build the state-based exchanges at the heart of the law’s efforts to expand coverage. The federal government was unprepared to take on that responsibility, as the botched rollout of HealthCare.gov proves.

Part D, on the other hand, built on the established Medicare program and targeted a well-defined group of beneficiaries — those over the age of 65. The federal government was solely responsible for the program’s implementation — and knew its audience.

Then there’s the cost differential. Next year, average Part D premiums are expected to be $31 a month. The monthly premium for the average midtier “silver” plan on Obamacare’s exchanges, by contrast, will be 10 times as much — and still post a deductible of more than $2,500.

In 45 states, coverage will be substantially more expensive than it would have been if Obamacare had never passed.

With such big upfront costs, consumers shopping on the exchanges may decide it’s cheaper just to pay Obamacare’s modest penalty for being uninsured — $95 or 1 percent of income in 2014, whichever is greater.

To ensure the solvency of the exchanges, the Obama administration estimates that 2.7 million of the 7 million people it expects to enroll in 2014 must be young and healthy. If these young folks stay away, then the exchange pools will be made up of older, sicker and costlier patients. Without premiums from the young and healthy to subsidize coverage for the old and sick, insurers will have to raise prices for those that remain. If that process repeats itself, the entire exchange system could collapse.

Even those who have coverage will pay more because of Obamacare. Starting in January 2014, the coverage that no fewer than 16 million Americans currently have will become illegal, thanks to Obamacare’s rules mandating that policies cover a panoply of expensive medical services regardless of whether patients actually want or need them.

Finally, there’s the cost to taxpayers. In May 2013, the nonpartisan Congressional Budget Office (CBO) reduced the 10-year projection of the cost of Part D that it came up with in 2011 by nearly $200 billion.

Obamacare’s price tag, on the other hand, keeps going up. The latest CBO estimate of the law’s 10-year cost is $1.8 trillion. That’s double the cost projected just three years ago, when the law passed.

Obamacare’s supporters are kidding themselves if they think that the law’s exchanges will follow the same path to popularity as Medicare Part D. The only question now is how much worse the Obamacare train wreck will be.