Why the Sky Isn't Falling

According to a good many pundits, it's all over. Here's from Real Clear Politics this am: Is it Game Over for Obama by Dana Milbank at the Washington Post; The Sinking Ship of Obamacare by Kathleen Parker, also at WaPo; A New and Unprecedented Level of Panic and Chaos by Yuval Levin at the National Review; and When the Obama Magic Died by Fouad Ajami at the Hoover Institute.

The Magic Man has been revealed as an inexperienced naif, way over his head. The bedazzled American crowd has lost both interest and faith in its putative hero. Trust once lost cannot be regained. And most of all, underlying all of this, his signature project, Obamacare, is headed for the rocks.

Is this true, or even probable? Is the sky really falling? My short answer is: No! For this to be true, Obamacare would have to be fundamentally broken. Although conservatives think it is, I am satisfied that it is not. Let's review the arguments:

Conservatives claim there is a flaw in the program's design. To balance the new insurance pools, the young "invincibles" have to sign up. If they don't, the pool will skew towards the unhealthy; premiums will go up; more healthy people will decide to opt out; premiums will go up even further; and we begin the well-discussed "death spiral" that will shipwreck a badly designed insurance program. And, argue Conservatives,  the under 35s' will not sign up, because the penalties are so modest, relative to the insurance premium costs. Conservative conclusion: fundamental, unfixable program design flaw. Obamacare is doomed.

On the other side, program defenders argue that most of the young uninsureds would like to have insurance, but they have not, until now, been able to afford it. With the subsidies in the ACA, they will be able to; 60% of the uninsured will be able to buy solid insurance for less than $100 a month. What has kept this argument open has been the website problems, plus the natural tendency of those who need something the most (the not so healthy) to sign up first.

So what about the millions of people who are getting cancellation notices? How does this affect the ACA's economic model? Or is this essentially a political problem (breach of Presidential promise), not an economic one?

Our Integral President

(from theobamadiary.com, go to 00:45)

Watch the announcement/press conference and you will see how an integral leader responds to a serious, possibly existential crisis. I have never witnessed anything like this in public political life. I've seen officials apologize publicly before; I have never seen a major leader enter what I'll call the "zone of apology" (that mental and conversational space where apology is present, looked at, reviewed, analyzed and engaged) and remain there so gracefully and with such powerful presence.

Before saying more, let me offer a David Whyte poem that, for me, wonderfully expresses the power an integral leader must have to hold difficult questions easily and to face directly into the "fierce heat of living":

SELF-PORTRAIT

It doesn’t interest me if there is one God

or many gods.

I want to know if you belong or feel

abandoned.

If you know despair or can see it in others.

I want to know

if you are prepared to live in the world

with is harsh need

to change you. If you can look back

with firm eyes

saying this is where I stand. I want to know

if you know

how to melt into that fierce heat of living

falling toward

the center of your longing. I want to know

if you are willing

to live, day by day, with the consequence of love

and the bitter

unwanted passion of your sure defeat.

I have been told, in that fierce embrace, even

the gods speak of God.

By David Whyte

From Fire in the Earth

What's Trying to Emerge?

I think a successful ACA is trying to emerge, through the fog of political war. Do not think the GOP can reverse the process; the policy fundamentals are in place. For me the question is not whether a working ACA will emerge, but when this will be recognized. I've said by early summer. I'll stick with that.

What are the policy fundamentals that have been put in place, causing what I see as an irreversible process:

• Insurance Reforms - Essential benefits must be offered in all policies, except Catastrophic coverage for those under 30. Children can stay on their parents' policies until age 26. No insurance denial due to preexisting conditions. No lifetime or annual caps. Annual limit on out of pocket expenses. Community rating - no gender differences; only 3 age breaks; and a smoking/no smoking break - the end of "slicing and dicing". 80% Medical Loss Ratio for Group policies, 85% for Non Group. This represents a HUGE tilting of the scales in favor of the little guy - the middle class - and away from insurance companies. There is NO WAY people will give these new benefits up.
• Insurance Exchanges - All 50 states, plus the District of Colombia, have Exchanges (16 are state-run, 7 are jointly run by the state and the federal government, and 27 are federally run). When Healthcare.gov is fixed, people in all states will be able to buy their insurance online, if they do not have insurance on the job, and are not on Medicare or Medicaid. Between 12 and 15 million people have been buying their individual policies directly from insurers. Many of these policies do not meet ACA Essential Benefits standards and have lost their grandfathered status by making significant benefit changes post-ACA. Estimates vary - 6-10 million policy holders who will have their old policies cancelled and will have to upgrade, often paying more. Many, perhaps most of these conversions will be handled directly with the insurer. Others will choose to move or be forced to move to the Exchanges. The CBO has estimated that 2 million people would migrate from the Individual/Non-Group market to the Exchanges. This is the "crisis" we are in right now. By March 31, this tsunami will have flowed through the system.  Thereafter, there will be a gradual elimination of the remaining grandfathered plans, but this will not create the blowback of our current round. For the most part, when open enrollment begins again in October of 2014, all the Exchanges will be working well (I am confident), and people will experience the pleasure of buying insurance in a clear, transparent way - allowing comparison shopping, and absolute certainty about what you are buying, what will be covered, and how much you will be on the hook for. When these Exchanges are truly working, people will love them; and they will never go back to the old, seemingly rigged game.
• Medicaid Expansion - The ACA expands Medicaid, offering it to everyone with incomes between 100% and 138% FPL, but based on the Supreme Court ruling, states can refuse to accept the expansion. At this point, 25 states, plus the District of Colombia, have accepted the expansion; 25 states have declined. The CBO originally estimated that 9 million would sign up in 2014, and that this number would grow to 12 million in 2015, and 13 million in 2020. With the red state opt-outs, the 9 million estimate for 2014 has been cut to 4-5 million who will sign up in participating states, and 4-5 million eligible, but left high and dry in opt-out states. This will be a BIG political problem in opt-out states, where the GOP will be hammered for putting ideology ahead of the people of their states. The pressure for this will not go away, until each refusing state has changed their position. 
• Income-based Subsidies - The ACA provides subsidies for people with incomes between 138% and 400% FPL ($45,000 for an individual; $94,000 for a family of four). Subsidies are structured so that people pay from 2.0% to 9.5% of their income for insurance, depending on their income levels. Subsidies can cover the entire premium for lower income people, and become more modest as you move up the income scale to 400% FPL. What many people don't yet know is that if premiums rise, your subsidy rises to completely offset the increase. If you qualify for subsidies, and income stays constant, your personal out of pocket for premiums will only change if your income changes. Subsidy-qualified people are sheltered from premium rate shock in Year 2 and beyond. In short, the subsidy program will help millions of people buy insurance they couldn't afford, and this affordability will remain in place. 60% of the uninsured will be able to buy insurance for $100 a month or less. After March 31, 2014, whether 1 million, 7 million, or more have enrolled on the Exchanges, with 60-70% receiving subsidies, NO ONE will be able to take this benefit away.
• Individual Mandate - Beginning in 2014, everyone must have "minimal essential coverage". If not, you will be subject to a penalty (the higher of $95 or 1% of income in 2014; 2% or $325 in 2015; and 2.5% or $695 in 2016). Many analysts have focused on how modest these penalties are, relative to annual premium costs; but my perspective is that 1%/2%/2.5% of a $75,000 income will be considered relevant by people at that income level. Am confident that the individual mandate will, over time (as it did in Massachusetts) encourage most people without insurance to sign up.

Obamacare Approval

(Poll of Polls, from Andrew Sullivan at The Dish)

As Andrew Sullivan at The Dish observes, it is interesting, in fact, surprising, that the Poll of Polls shows favorables on Obamacare moving up since the October 1 web site disaster. Could it be that people generally understand about problems, even big ones, occurring during a product or program's launch period; and that, at long last, folks are coming in contact with an actual program, with specific features in the real world that they can observe and experience for themselves; and they have survived the encounter (despite GOP insistence) and are beginning to like what they see?

I think it's not only possible, but likely. What I'm really interested in is what this chart will look like next May, or June, as we move into the stretch for the midterms. And here's my prediction: the lines will have crossed, or be just about to cross, moving favorables over unfavorables for the first time. Why do I think so:

• The web site will have been fixed (before Christmas) and it is very easy now to put your info in; to compare policy options; to see what (if any) subsidy support you are eligible for, and to sign up and buy insurance (although open enrollment is closed until October 1).
• Enrollment was pretty much on target, greatly helped by the almost 2 million folks whose policies were cancelled and decided to buy new coverage on the Exchanges. Total enrollment is 6.8 million, with 2.5 million under 35.
• The cancellation crisis is behind us. Of the 6 million people who lost coverage, 3 million renewed with their insurance companies directly; 2 million went to the Exchanges, and 1 million chose to pay the fine and skip insurance.
• Large employers have continued to offer insurance to their employees, with almost no one pushing their workers out into the Exchanges. The Total number of people getting insurance at work has actually grown slightly, as more small employers, using ACA credits, are offering plans.
• Overall healthcare costs are adding a 6th year to their record of cost moderation and premium increases (on exchange and off, both group and individual) have remained moderate.
• There have been some pressure on doctors, especially in moderate income and poorer neighborhoods, as the medical system reacts to the surge of new patients from Medicaid and the Exchanges. But the system is adjusting. In some states, PAs' and Nurse Practitioners are being granted new practice authority.
• States that refused the Medicaid expansion are under enormous media  and political pressure to accept the Federal money, expand Medicaid, and stop the travesty of having people with incomes from 100%-138% of Federal Poverty Levels not  able to get subsidy support, where anyone with incomes from 139%-400% of FPL can qualify for subsidies.
• There are quite numerous complaints from people whose individual policies were cancelled, and bought on the Exchanges, that they can't use the same doctors or hospitals they could before. But the great majority of people on the Exchanges, most of whom did not have insurance before, understand how tight provider networks help reduce costs, and are satisfied with the medical services they have access to.

In short, people are encountering the real program, and finding it works fine, and that no other part of their relevant world has blown up, or even seems remotely at risk of doing so. The big adjustment in the individual market, from bare bones to a full range of essential benefits, has been made. Many are paying more, but they mostly understand that they now have much better insurance. Complaints are still heard, but now the much louder media sound is of people telling their positive, happy and hopeful stories.

Democrats running against incumbent Republicans are hammering their opponents, and through them, the GOP for misleading and frightening folks. They are telling potential constituents: don't send the Republicans back, unless you want to lose this very good thing called Obamacare.

The possibility of a huge upset in November is beginning to be discussed seriously.

That's what I think is coming. Very, very exciting.

President Obama's Interview

This is worth watching. Not just to hear the apology, but to directly experience the presence of this man responding to questions from a hostile questioner. Choose your adjectives. Mine are: present, fully awake, forthright, powerful, clear, resolute, fully listening to, absorbing and answering all of Todd's questions.

Jesus said: "Be gentle as a dove and shrewd as a serpent."

That's our President.

Amazing!

Some Demographics

(compiled by author from Google)

Obama won in 2008 and 2012 with Minorities, Millenials, Unmarried Women and Professionals (what Ruy Texeira and John Judis call the "Rising American Electorate"). In 2010, these folks stayed home, and Democrats were clobbered. What can we learn from Virginia, comparing yesterday to the race for Governor in 2009 about who might show up next November? Here's what the comparative demographics suggest to me:

• Minorities, and to a lesser extent Millenials, can show up for an off year election (i.e., non presidential elections). They turned up yesterday in Virginia, but not in 2009. They actually did not show up in New Jersey (per Ed Kilgore at The Washington Monthly), where Minority/Millenial turnout was similar to 2010, not 2012.
• Why did Minorities turn out so strongly in Virginia but not in New Jersey yesterday? My guess: Christie is not Tea Party; worked with Obama on Hurricane Sandy relief; and is not fighting Obamacare. Cucinelli in Virginia was full-throated Tea Party and called his campaign a referendum on Obamacare, which the Black community legitimately takes as an effort to destroy their leader's legacy. If 2014 becomes, like Virginia, a referendum on Obamacare, and thus Obama, Minorities (and Millenials, to a lesser extent) will show up, and that will make the difference.
• Seniors showed up in the same way they did in 2009, but it wasn't enough. Dems can win, even with the high midterm turnout from Seniors.

My conclusion: Make 2014 about Obamacare and Immigration (even if, by some miracle, serious Immigration reform is done before election day). If we do, Minorities will show up and Dems will win - not everywhere, but in enough places to retake the House.

It's Not Easy

(from theobamadiary.com)

"It's Not Easy" by Superman

I can't stand to fly
I'm not that naive
I'm just out to find
The better part of me

I'm more than a bird, I'm more than a plane
I'm more than some pretty face beside a train
And it's not easy to be me

I wish that I could cry
Fall upon my knees
Find a way to lie
Bout a home I'll never see

It may sound absurd but don't be naive
Even heroes have the right to bleed
I may be disturbed but won't you concede
Even heroes have the right to dream?
And it's not easy to be me

Up up and away away from me
Well it's all right
You can all sleep sound tonight
I'm not crazy or anything

I can't stand to fly
I'm not that naive
Men weren't meant to ride
With clouds between their knees

I'm only a man in a silly red sheet
Digging for kryptonite on this one way street
Only a man in a funny red sheet
Looking for special things inside of me

Inside of me, inside of me, yeah
Inside of me, inside of me

I'm only a man in a funny red sheet
I'm only a man looking for a dream
I'm only a man in a funny red sheet
And it's not easy, it's not easy to be me