ObamaCare

By Ezra Klein
Published: November 13 at 1:44 pm

1. The Affordable Care Act’s political position has deteriorated dramatically over the last week. President Bill Clinton’s statement that the law should be reopened to ensure everyone who likes their health plans can keep them was a signal event. It gives congressional Democrats cover to begin breaking with the Obama administration.

2. The most serious manifestation of that break is Sen. Mary Landrieu’s “Keeping the Affordable Care Act Promise Act.” It’s co-sponsored not just by the usual moderate Democrats — Landrieu and Dianne Feinstein and Mark Pryor and Kay Hagan — but also by Oregon liberal Jeff Merkley. It’s worth noting that Merkley is up for reelection in 2014.

3. The argument Landrieu is making on behalf of the bill will appeal to many Senate Democrats. “When we passed the Affordable Care Act, we did so with the intention that if you liked your health plan, you could keep it,” she said on the Senate floor. “A promise was made and this legislation will ensure that this promise is kept.” It’s an underplayed dynamic of the current political storm that many congressional Democrats feel Obama broke a promise he made to them, as well.

4. The bill Landrieu is offering could really harm the law. It would mean millions of people who would’ve left the individual insurance market and gone to the exchanges will stay right where they are. Assuming those people skew younger, healthier, and richer — and they do — Obamacare’s premiums will rise. Meanwhile, many people who could’ve gotten better insurance on the exchanges will stay in bad plans that will leave them bankrupt when they get sick.

“I think it would be a real substantive mistake to do the Landrieu bill,” says MIT health economist Jon Gruber, a supporter of the Affordable Care Act.

5. Put simply, the Landrieu bill solves one of Obamacare’s political problems at the cost of worsening its most serious policy problem: Adverse selection. Right now, the difficulty of signing up is deterring all but the most grimly determined enrollees. The most determined enrollees are, by and large, sicker and older. So the Web site’s problems are leading to a sicker, older risk pool. Landrieu’s bill will lead to a sicker, older risk pool. Obamacare has provisions meant to stop an out-of-control death spiral, but higher premiums are a real danger. (For more on that, see “Seven reasons Obamacare isn’t facing a death spiral.”)

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