Californian success shows how Obamacare can work

The Affordable Care Act is working well in a number of states running their own online health exchanges instead of HealthCare.gov

Barack Obama’s administration is telling the public that everything will eventually be fixed, and urging congressional Democrats to keep their nerve. Reuters/Larry Downing
Barack Obama’s administration is telling the public that everything will eventually be fixed, and urging congressional Democrats to keep their nerve. Reuters/Larry Downing

It goes without saying that the rollout of Obamacare was an epic disaster. But what kind of disaster was it? Was it a failure of management, messing up the initial implementation of a fundamentally sound policy? Or was it a demonstration that the Affordable Care Act is inherently unworkable?

We know what each side of the partisan divide wants you to believe. The Obama administration is telling the public that everything will eventually be fixed, and urging congressional Democrats to keep their nerve. Republicans, on the other hand, are declaring the
programme an irredeemable failure, which must be scrapped and replaced with . . . well, they don't really want to replace it with anything.

At a time like this, you really want a controlled experiment. What would happen if we unveiled a programme that looked like Obamacare, in a place that looked like America, but with competent project management that produced a working website?

Well, your wish is granted. Ladies and gentlemen, I give you California. Now, California isn't the only place where Obamacare is looking pretty good. A number of states that are running their own online health exchanges instead of relying on HealthCare.gov are doing well.

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California is, however, an especially useful test case. First of all, it's huge: If a system can work for 38 million people, it can work for America as a whole. Also,
it's hard to argue that California has
had any special advantages other than
that of having a government that actually wants to help the uninsured. When Massachusetts put Romneycare into effect, it already had a relatively low number of uninsured residents.

California, however, came into health reform with 22 per cent of its non-elderly population uninsured, compared with a national average of 18 per cent.

Finally, the California authorities have been especially forthcoming with data tracking the progress of enrolment. And the numbers are increasingly encouraging. For one thing, enrolment is surging. At this point, more than 10,000 applications are being completed per day, putting the state well on track to meet its overall targets for 2014 coverage. Just imagine, by the way, how different press coverage would be right now if Obama officials had produced a comparable success, and around 100,000 people a day were signing up nationwide.


Balanced risk
Equally important is the information on who is enrolling. To work as planned, health reform has to produce a balanced risk pool – that is, it must sign up young, healthy Americans as well as their older, less healthy compatriots. And so far, so good – in October, 22.5 per cent of California enrollees were between the ages of 18 and 34, slightly above that group's share of the population.

What we have in California, then, is a proof of concept. Yes, Obamacare is workable – in fact, done right, it works just fine.

The bad news, of course, is that
most Americans aren't lucky enough to live in states in which Obamacare has,
in fact, been done right. They're stuck either with HealthCare.gov or with one of the state exchanges, like Oregon's, that have similar or worse problems. Will
they ever get to experience successful health reform?

The answer is, probably, yes. There won't be a moment when the clouds suddenly lift, but the exchanges are gradually getting better – a point inadvertently illustrated a few days ago by John Boehner, the speaker of the House. Boehner staged a publicity stunt in which he tried to sign up on the Washington DC health exchange, then triumphantly posted an entry on his blog declaring that he had been unsuccessful.

At the bottom of his post, however, is a postscript admitting that the health exchange had called back “a few hours later”, and that he is now enrolled.


'Patriotic hold music'
And maybe the transaction would have proceeded faster if Boehner's office hadn't, according to the DC exchange, put its agent – who was calling to help finish the enrolment – on hold for 35 minutes, listening to "lots of patriotic hold music".

There will also probably be growing use of workarounds – for example, encouraging people to go directly to insurers. This will temporarily defeat one of the purposes of the exchanges, which was to make price comparisons easy, but it will be good enough as a short-term patch. And one shouldn't forget that the insurance industry has a big financial stake in the success of Obamacare, and will
soon be pitching in with big efforts to sign people up.

Again, Obamacare’s rollout was a disaster. But in California we can see what health reform will look like, beyond the glitches. And it’s going to work.