Obamacare: Big Dig of government programs?
Although, come to think of it, it certainly wouldn’t be the only government program to resemble that illustrious undertaking in Boston:
The Big Dig was the most expensive highway project in the U.S. and was plagued by escalating costs, scheduling overruns, leaks, design flaws, charges of poor execution and use of substandard materials, criminal arrests, and one death. The project was originally scheduled to be completed in 1998 at an estimated cost of $2.8 billion (in 1982 dollars, US$6.0 billion adjusted for inflation as of 2006). However, the project was completed only in December 2007, at a cost of over $14.6 billion ($8.08 billion in 1982 dollars, meaning a cost overrun of about 190%) as of 2006. The Boston Globe estimated that the project will ultimately cost $22 billion, including interest, and that it will not be paid off until 2038.
Get used to it, if you weren’t already. They don’t say “good enough for government work” for no reason:
The biggest problem with Healthcare.gov seems simple enough: It was built by people who are apparently far more familiar with government cronyism than they are with IT.
That’s one of the insights that can be gleaned from the work done by the Sunlight Foundation Reporting Group, a Washington, D.C.-based nonprofit that focuses on government transparency. In a report filed this past week, the group examined why the system broke as horribly as it did: The contracts awarded to those who built it were, by and large, existing government contractors with “deep political pockets.”..
Why did they get the work? The report hints at a likely reason: The companies were big lobbyists, with “some 17 contract winners reported spending more than $128 million on lobbying in 2011 and 2012.” Granted, some experience with government work is vital for any contractor, and the federal procurement system is geared to favor those already doing government work, but Sunlight pointed out that the list tips heavily toward those with both existing contracts and political leverage…
One…name in particular on the contractor list probably won’t be familiar to readers, but ought to be from now on: Science Applications International Corp., or SAIC. Nominally a defense contractor, SAIC has been involved with many government projects with ghastly end results, such as New York City’s fraud- and corruption-riddled $600 million CityTime payroll software boondoggle.
But many problems with the website were not the fault of incompetent contractors. One of the main difficulties, the sign-in process and the fact that an account must be created before a person can browse programs and prices, was intentional (although I doubt they meant it to be quite as awful as it has turned out). But there actually was a reason they made people sign in and be verified before they could get price quotes, and the reason was not a trivial one, although the whole thing underscores the problems with Obamacare and the federal government in general: they figured that if they allowed people to shop around and look at prices before their income level and eligibility for subsidies had been verified, too many viewers would see the real (that is, unsubsidized) prices and freak out at the cost. The government wanted lower-income people to only see the prices they’d actually be paying, with the government (in other words, the taxpayers and/or Obamacare subscribers with more money than they) footing the rest of the bill. So the real price of Obamacare would be hidden.
It’s exactly the opposite of discount stores where they proudly display the original price so you can see just how much it’s been marked down and feel that you’re getting a huge bargain. Of course, in that case, the consumer is free to accept or reject the product, taxpayers aren’t subsidizing the shopper, and the original price may even be inflated to make the buyer think the deal is even better.
But the point of the Obamacare site was to be, if not exactly duplicitous (after all, the subsidized price is in fact what a person getting a subsidy would actually pay), then certainly to be secretive about the bigger picture of cost. But one of the hallmarks of Obamacare has been this speed and secretiveness, so why would that change now?
Even Ezra Klein has interviewed a guy who noted it (Robert Laszewski, president of Health Policy and Strategy Associates):
One thing the Obama administration has been really paranoid about is rate shock. When someone like me says there’ll be rate shock they say you have to net out the subsidies. That is a fair point. But I think what happened was when they designed their system they were so paranoid about that that they wanted to make sure people browsing got the lowest price. That required signing in so you could see subsidies. And my theory is that’s why they went to the architecture they did even though the IT systems people wanted to go another way.
So not only are the problems no simple glitch, but they are only partly the fault of the IT people. Some of this is the fault of big government itself, and why so many people hate it. But in this case the Obama administration had political goals above all else, and they sacrificed efficiency and openness to them. This, of course, is not news.
[NOTE: Another bonus of the way the website was designed was to maximize the amount of information the government could glean about even casual browsers. The way the Obamacare website is set up, there are no casual browsers.
And to be fair, the government may also have feared that if people saw the unsubsidized prices first, they run screaming from the site and never return. This, of course, would spell doom for Obamacare, since it depends on a lot of young and healthy people enrolling.]
One of the simple tenets that allowed the unblinkered to predict higher premiums for Obamacare was the principle of adverse selection. In private health care, group plans, which must accept new employees regardless of medical condition or history, have a higher incidence of claims because the have a higher proportion of people who actively need and use their medical insurance. People who can’t get health insurance privately have no choice but a group plan. Although often subsidized by an employer, the premiums for group plans are naturally higher than private insurance where relatively healthy subscribers are charged lower rates.
Obamacare is the ultimate group plan. Accepting any and all pre-existing conditions naturally drives the cost of care higher (reality always wins)
The Obamacare site seems to be using this principle of adverse selection precisely in reverse; i.e., since the premiums will be higher than current pricing we will do everything to hide the pricing from potential subscribers so as not to frighten them away. I offer the label “adverse enticement;” enticing people who don’t need your product and who can get it cheaper, even if they want it, to purchase your more expensive policy filled with options that they really don’t need.
Of course, if Humana, Aetna or Blue Cross/Blue Shield did this (hide pricing to entice unsuspecting consumers) their corporate ass would be instantly hauled into court by the anti-business leftists who are the very ones responsible for this duplistic Obamacare system.
And the l govt gets away with imposing precisely the kind of hardcore Darwinian capitalism that proponents of big govt constantly accuse the private sector of implementing. More projection from the left. Quelle surprise!!
You knew you were being lied to from the get go when you were told 30 million more people would receive medical care and it would cost less. I can only conclude democrats can’t do math of they are pathological liars.
The thing is, they need people who are not subsidized to sign up as well. Those people will face awful prices . . . why would they sign up?
Here we see the arrogance of the central planners. Always, there will be political considerations that make the system less efficient.
They were hoping the corruption would be outweighed by some sort of “economies of scale.”
…at least, those who wanted to do right by the poor. The others were only interested in furthering their own power.
It would have been cheaper to just give free care to those 30 million uninsured. What’s scary is that much more money has been spent on Obamacare marketing than on their failed “Big Dig” style website.
We’ll have to remember these millions and billions misspent (or misplaced, like $64 million of the IRS-Obamacare “slush fund”) when they inevitably start telling certain segments of the population that we just can’t afford their care, that hard decision have to be made when the funds are limited.
The people will get what they voted for – “good and hard”.
“It would have been cheaper to just give free care to those 30 million uninsured.”
Agreed, but that would not have allowed Ocare to shine a flashlight on your or my rectum.
“And to be fair, the government may also have feared that if people saw the unsubsidized prices first..”
To be fair Nancy would have known what was in it before it was signed into law/implemented. The demented clowns in DC don’t need no stinking ‘fair’.
“It would have been cheaper to just give free care to those 30 million uninsured.”
A FB friend claimed that Obamacare is revenue neutral. I can’t believe that. However, Google tends to put pro leftist arguments higher in their search results – can anyone suggest a good place to get the real scoop?
Folks, I keep telling everyone, I WAS able to get through to the NY State Exchange (2:30 am, Oct. 1), and they DON’T HAVE TO COVER PRE-EXISTING CONDITIONS — not for the Bronze and Silver tiers!
And they DON’T SUBSIDIZE the working class/lower middle class people — you can make TOO LITTLE to qualify for the “subsidies.” That’s right — TOO LITTLE to qualify for subsidies.
Yet make, at the same time, TOO MUCH FOR MEDICAID.
Sorry for the all caps, but I’ve been frustrated beyond belief: I feel like I’m shouting into the whirlwind! No one can believe me, not even my Republican friends.
You see, the Left has LIED ABOUT IT ALL again! And, being honest and honorable folk, we find it grotesque and difficult to believe that the Left are such amazing liars, so utterly brazen.
So ask yourselves: what is the purpose of this denial of subsidies to the lower middle class and working & genteel poor?
I have a theory: (1) The Leftists want everyone on the govt. teat, right? But so far, the bourgeoisie, whom all of them from Marx and Lenin on down have wanted to Eradicate, have been notoriously resistant to getting on the dole of any kind.
(2) The bourgeoisie will be getting subsidies that, in terms of need, should go to poorer folk. So they’re getting the govt. “crack,” just a little taste. . . .
(3) The Leftists have played all sorts of sordid games to disguise the true cost of even this “short-sheeted” version of Govt. Hellcare — taxing us for FOUR YEARS before doling out any cheese, e.g. All to keep the “price tag” under the magic number of $1 Trillion.
(4) It’s a calculated risk, not covering the genteel poor comme moi, because they figure that most of us will vote for Them anyway, and those of us who hate them are too powerless and moneyless to do anything much about it except bitch, moan, and die.
Thoughts? Any of you manage to get behind the Curtain and see what’s back there in other states?
One more thing: for all you boycotters, in NY State at least, “non-grandfathered plans” will cost DOUBLE YOUR CURRENT PREMIUM when you try (or are forced to) enroll.
Sorry but this is all just too…. sad. I can’t even finish reading it.
Sadness is a good emotional resource to turn into determination, relentlessness, and hate.
All of which are useful in war. Sadness, not so much.
In this case Sad=Pathetic.
I’m not really sure how this decision (to force signup before showing any plan info) really played into the debacle that is healthcare.gov, since if they’d built it the other way, it still would have blown up when users tried to actually sign in, because apparently the signup process is fundamentally broken. So, we would have had a situation where people might have been able to see the pre-subsidy prices for insurance, and then failed to be able to actually sign up for any insurance. I.e., it would have been just as broken.
The problem with healthcare.gov is, apparently, that it was built by too many contractors, building little bits and pieces, without any one contractor being responsible for systems integration. Instead, HHS was supposed to do it, which is a boneheaded move if I’ve ever heard of it. Government doesn’t have the expertise or personnel to pull off something like this, for obvious reasons. They should have delegated this to the private sector and given the entire responsibility to tech companies that know what they are doing. That’s what California did, and their health care exchange site is working just fine.
The reason they didn’t do it? Washington’s procurement process is Byzantine and it would have been illegal to do it the right way. So, they did it in the messy, ultimately incompetent way.
Government, especially the Federal government, isn’t very good at this sort of thing. It’s wasteful and inefficient. They’ll work it out but it is too bad that so many states opted not to build their own exchanges — those are the states that are suffering through this debacle the most.
Obama Democrats had too many cronies that wanted their cut of the contract money.
Not really, Ymarkasar. The irony is the tech companies that ran the Obama campaign’s web presence are SUPER competent. They pulled off an incredibly efficient, totally on the ball operation that was the wonder of both 2008 and 2012. But NONE of them were involved in healthcare.gov, and they said why: procurement rules. Working on a campaign they didn’t have to deal with DC red tape, but working on healthcare.gov there was tons of DC red tape. So, they didn’t even try to apply for those jobs — the work went, instead, to old-line government contracting companies with much less tech savvy.