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The Long View on Health Insurance Reform

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Much has been written about the rough rollout of Obamacare. It's been front page news for the past month as every piece of the Healthcare Exchange rollout has gone under an intense level of scrutiny. Those who hated the program have lined up for another parting shot while supporters of the program have unleashed their own frustration, namely at Kathleen Sebelius, the current Cabinet Secretary for Health and Human Services.

So...... is all of this bad for the President and health insurance reform? Not so fast.

I'll predict in 6 months we'll all look back on this as a blip that momentarily fouled a landmark program.

The first gift that the Obama White House gave Republicans was the train wreck of a roll out. Today, we all know is that The Healthcare.gov site had not been thoroughly stress-tested by computer programmers prior to the launch. That goof was horribly embarrassing for all involved. Worse, it gave a Christmas gift to those who hated any idea of health insurance reform. However, when HHS wanted to fully fund the website creation and launch, they could not get an extra nickel from a Republican Congress and instead had to beg, borrow, and steal from their own internal programs to fund the site's construction. They were hobbled from the start. In that sense, the GOP continues to be part of the problem and skillfully deflected blame to the Obama White House.

We should also put things into perspective. We live in a nation where people will camp outside an Apple store for the latest and greatest in iPhones but are left furious when it takes a little longer than necessary to walk through a website that might save their lives. There is a cognitive dissidence I find troubling.

Going forward, the narrative will be all about improvements in online access. We are already seeing daily improvements in speed, bandwidth, and decreased hold times. People are being routed faster to the right places. The site goes offline for four hours in the middle of the night so that upgrades and patches can be administered. The "Technical Surge" to fix the problem is in full swing.

The second gift the President gave to the Republican Congress was the constant assurance that anybody who had their current coverage would be able to keep it. When the insurance industry mailed off an avalanche of cancellation notices, the White House was caught off guard by both the number of cancellations and to Republican glee, and again, Christmas came early politically.

Like any internet launch, bugs will emerge from the woodwork and be solved with an army of technical help. That's what is going on now and those who predict or proclaim its early death will look foolish in several weeks when the ease of access forces them to eat their words or contradict their earlier statements.

However, when you get beyond the false outrage, something interesting emerges. First, those impacted by the cancellations had health insurance plans that were simply substandard, normally only for catastrophic care. Thankfully, the days of shoveling hundreds of dollars per month to Aetna to address catastrophic care will be gone because they do not address the root cause of healthcare increases. The best way to keep costs low is to route people to the right healthcare locations. Sending poor families into Emergency Rooms is the most expensive way to handle problems but sending them to a doctor with smaller copays can generate better results at lower costs.

However, the big improvement is that nobody can be denied for having pre-existing conditions and these were traps set by insurance companies to remove "at risk" clients from their bottom line. Before Obamacare, 45,000 per year would die without healthcare insurance.

For example, one of Ron Paul's main campaign advisors from is 2008 campaign, Kent Snyder, died of viral pneumonia after a long battle with cancer. Because he was repeatedly denied health insurance because of his "preexisting condition," he died broke with $400,000 in medical bills. While friends tried to raise funds to help, it was only a drop in the bucket. Kent Snyder was one of the 50 million without a safety net of health insurance access. He might even be alive today with Obamacare and that must be a bitter irony for his family and his belief systems.

Today low incomes earners are able to find better replacement policies often at a much lower cost because of government subsidies. However, that narrative has only begun to get some traction in the last week, after Healthcare.gov's website woes controlled the news cycles for several days. Now people are seeing the benefits.

People forget that this is par for many other industries. Detroit has a volume of regulations when it comes to building cars. We hope that all cars come with four wheels, a steering wheel, a gas pedal, and much, much more in working order. However, there are a raft of safety and environmental regulations that repair the harm to our environment and keep our passengers safe. We are a better nation for that and that same approach will translate into intelligent health insurance reform.

Perhaps the Obama White House can be found guilty of sugarcoating details as we transition to a smarter health insurance reform. Oversimplifying the argument by saying that nobody would lose their healthcare probably kept the reform package from blowing up in Congress. Now he has got to redraft his argument to say that even if you lose your coverage, you will find a better solution through Healthcare.gov. Once people see the success of that taking place, the arguments will die down--for now.

Big Programs often have early missteps. When John Kennedy inspired us "to go to the Moon in this decade and do the other things--not because they were easy but because they were hard," the first rocket ships blew up on the pad or exploded midair into a spectacular fireworks display because they needed to work out the bugs in the circuitry. For those first years, it did not appear that any of our astronauts would return alive and there would be a Soviet flag on the moon. Well, thanks to Neil, Buzz, NASA, and a generation of engineers and scientists, we got there first and have gone on to build other great things.

Social Security and Medicare were created to make sure that we did not consign the old into poverty. Medicaid did the same for the poorest of the poor. However as the middle class hollows out and the benefits our parents received is replaced by bottom line profitability, somebody has to step up for middle class families who are one illness away from going broke. Barack Obama did just that.

Today Social Security and Medicare are highly popular programs, some might say too much so. For all of the whining that took place when they were enacted, there would be rioting if they were to disappear. Just ask George W. Bush, who wanted to privatize Social Security after winning the election in 2004. It ruined his second term. The first government shutdown was all about Medicare costs and Clinton held firm while Newt Gingrich fell to pieces. In the end, those who called either program "Socialized Medicine" might whistle a different tune now that they receive it.

In a world where we are living far longer than when either Social Security and Medicare were created, we will have go back and tinker with things to ensure long term solvency. However as we look ahead to a new age of health insurance reform, we can address the solvency of many middle class families who can now get insurance when pre-existing conditions or shoddy plans made health insurance out of reach for them.

The best news of all is that as we move to a new world of health insurance reform, according to Aon Hewitt, a healthcare consultancy, in 2013 overall healthcare costs only increased by 3.3%, which down from 4.9% in 2012 and 8.8% in 2011. That is good news for everybody.