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Where’s the Birthday Party for Healthcare.gov?

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Where’s the Birthday Party for Healthcare.gov?

October 1, 2014

I woke up this morning expecting to find the White House celebrating Healthcare.gov’s first birthday. When I saw no mention on the website, I checked California Representative Nancy Pelosi’s website and Senate Majority Leader Harry Reid’s—again, no mentions. Where is the fanfare? Where are the photo ops?

Between congratulating the 2013 MLS Cup champions Sporting Kansas City this afternoon and meeting with Indian Prime Minister Narendra Modi last night, Healthcare.gov’s birthday must have slipped President Obama’s mind. The website, which rolled out to much fanfare on October 1, 2013, seems to be working now, and one would expect the Obama administration and congressional Democrats to be touting their signature piece of legislation. News of security breaches that could compromise enrollees’ personal information should be no reason to postpone what should be a joyous occasion for the Administration. 

I visited Healthcare.gov to make sure the site was not experiencing technical problems. I was surprised that I could not enroll in the exchanges for 2015 as the law requires. It turns out the starting date was pushed back to November 15. Is it mere coincidence that the new date falls after the midterm elections on November 4? No doubt the White House factored in the likely spike in insurance premiums, especially for young people, in its decision to move the date. These price hikes would negatively affect the  success of Democrats in the elections.

The employer mandate was another Affordable Care Act provision that was pushed back to after the election. Businesses with over 49 full-time equivalent employees were originally supposed to offer insurance plans that met government requirements by January 1, 2014, but President Obama delayed the mandate, and then delayed it again.

On January 1, 2015 employers with over 100 employees must provide healthcare coverage to at least 70 percent of their workforce or face a fine of $2,000 per worker (the first 30 workers are exempt). This penalty is effectively over $3,000 since it is not tax deductible. Employers with between 50 and 100 employees will have until January 1, 2016. Once the full mandate goes into effect, growing from 49 to 50 workers will cost a business an additional $60,000. 

The center-left Urban Institute advocates eliminating the employer mandate. The mandate is only projected to increase the number of insured by 0.007 percent. Both this increase (which amounts to nothing more than a rounding error) and the $4.3 billion the IRS is expected to collect in fines from employers are not worth the disincentives to businesses hiring—especially with labor force participation at 1978 levels  and the unemployment rate hovering above 6 percent

Despite the Affordable Care Act, 31 million people will remain without insurance in 2016, according to the Congressional Budget Office, and this number is expected to remain steady until 2024 (the last year of CBO projections). Since the Affordable Care Act’s coverage provisions are expected to cost $1.5 trillion over the next 10 years, the cost per additional insured person is $10,700 a year. If the government is going to spend over $1 trillion to decrease the number of uninsured by 30 percent, why not just provide individuals with subsidies to purchase private insurance and avoid drastically disrupting a fifth of the American economy? This would also mean no Healthcare.gov and no employer mandate. 

When it comes to the Affordable Care Act, there is little to celebrate. With more unpopular and destructive aspects of the law beginning next year, it is unlikely that Healthcare.gov’s second birthday will be any happier. 

 

Jared Meyer is a policy analyst at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter here

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