July 18, 2013

Excerpt: "50 percent. That’s how much lower health insurance rates will be in New York in 2014, according to new approvals from state regulators."

Sarah Kliff and I have spent the last three months interviewing dozens of Obama administration officials, state-level implementers, outside experts, steadfast critics and pretty much anyone else we could think of who’s involved in setting up Obamacare. The full article going deep inside the effort to implement Obamacare is here, but as a bit of a teaser, here are 10 of my takeaways from the reporting:

1) For the White House, it’s all about the marketplaces. The White House believes the line between success and failure is perfectly clear: It’s getting enough young and healthy people to sign up for the insurance marketplaces (or “exchanges”) so premiums remain low. If seven million people sign up for the marketplaces in 2014, as CBO expects, then they need 2.7 million younger, healthier folks. Getting those folks is the administration’s top priority. If they get that right, the rest of the law — including the Medicaid expansion — will more or less fall into place.

Anything required to meet that goal — like making the data architecture work — is a priority. Anything that distracts from it, or is unrelated to it — like the employer mandate — is expendable.

2) It’s a lot like the campaign. If you listen to the White House describe the task, it sounds just like the campaign. A majority of these younger, healthier adults are non-white. They skew male. One-of-three lives in Texas, California, or New York. They’re getting microtargeted and heat-mapped and modeled. The guy running this part of the effort is David Simas, the guy who ran polling and focus groups for the re-election campaign.

This gives Team Obama a lot of confidence that they’ve got this one. Key quote: "When I hear the conventional wisdom about Obamacare," said Jeanne Lambrew, deputy assistant to the president for health policy, "this is the difference between the Karl Roves who put their fingers to the wind and the Nate Silvers of the world who looked at the numbers."

But there’s one big way in which it’s not like the campaign: Voting is free. Buying health insurance isn’t.

3) Don’t forget IT. The biggest difference between the national conversation over Obamacare and the ground-level conversation over Obamacare is the degree to which the second focuses on the IT challenge.

Making the IT work is very, very hard. It means building a data hub that lets federal-government systems from different departments and agencies talk to archaic state Medicaid systems and new state exchange systems and so on. If that data hub doesn’t work then someone trying to sign up for Obamacare will be stopped by an error message. And if Obamacare loses too many of those people on their first try, it may not be able to get them back for a second.

4) No one knows how to model politics. If you look at the experience of Massachusetts, or you talk to the people who model the way people act when buying insurance, the Affordable Care Act should be fine. The numbers work out. But no one knows the degree to which the politics around the law will change the way consumers react to it.

5) But maybe the politics won’t really matter. It’s always worth remembering that everyone in Washington is really weird. Most of the country doesn’t care much about Obamacare. They don’t have particularly strong feelings about it. And they’re never going to come into contact with something called “Obamacare,’ anyway.

In California, it’s called “Covered California.” In Connecticut, it’s “Health Access CT.” In Washington, it’s “WA State HealthPlanFinder.” People signing up for Medicaid will be signing up for the program called Medicaid. People in Washington experience Obamacare as a political abstraction and project that onto the country. That act of projection might be a huge mistake.

6) There will be glitches. It doesn’t matter how good a job the administration or the states do. Things will go wrong. When they go wrong, the media will cover them. No major program has ever rolled out without glitches. Even if 2014 goes well for Obamacare, it’s not likely to go easily.

7) Glitches may not really matter. Take it from Mark McClellan, who led Medicare and Medicaid during the troubled implementation of Medicare Part D. "The memories didn't last that long. In the end, it comes down to how good the insurance coverage is."

Fun Medicare Part D fact: Months before it launched in 2006, Medicare Part D was less popular than today's Affordable Care Act: Only 21 percent of the public viewed it favorably.

8) Different states will have wildly different experiences. California accepted the Medicaid expansion, chose to build its own exchange, is spending state money to promote the law, and is generally doing everything in its power to make Obamacare work. Texas rejected the Medicaid expansion, left the exchange to the feds, and the state’s key politicians are out there talking down the law. It’s very possible Obamacare will be a success in states like California and a failure in states like Texas. How the politics of that shake out is anyone’s guess.

9) No one knows quite what to do in states that aren’t expanding Medicaid. In those states, the poorest residents will get no help but slightly less-poor residents will get lots of help. That’s confusing for everyone involved — and a real challenge to the people trying to sign folks up for the law. How do you tell someone they’re too poor to be eligible for subsidies?

Nor is anyone really certain what will happen to the hospital systems in those states, as they’re losing out on a lot of money they were counting on. The administration’s theory is that if the law is seen as relatively successful, the economics of participating in the Medicaid expansion are so overwhelmingly favorable to the states that they’ll fall in line. But no one really knows what’ll happen in that first year or two, nor who will be blamed for the resulting mess.

10) State regulators are exhausted. When you talk to the Obama administration, you get a serene confidence that Obamacare is going great. When you talk to the Obama administration’s critics, you get a serene confidence that the law is collapsing under its own weight. When you talk to the state bureaucrats, technical specialists, and assorted other implementers, you get a harried download on just how much there is to do.

"In 2011, there was this 'we're going to save the world' mentality," said Rebecca Pearce, executive director of the Maryland Health Benefit Exchange. "In 2013, it focuses more on how do we deliver on the requirements of the law."

To wrap up: Read the whole story. Really. There’s much more there, including an update of Max Baucus’s famous “train wreck” quote…

Wonkbook’s Number of the Day: 50 percent. That’s how much lower health insurance rates will be in New York in 2014, according to new approvals from state regulators.