Skip to main content

Why I signed up for Obamacare

By Reihan Salam, CNN Political Commentator
December 26, 2013 -- Updated 1810 GMT (0210 HKT)
STORY HIGHLIGHTS
  • Reihan Salam: I oppose Obamacare but I decided to sign up for the New York exchange
  • He says New York premiums falling dramatically because of individual mandate
  • Salam says Obamacare likely will have to be revised or scrapped due to low enrollment
  • He says conservatives need an alternative to Obamacare and it will cost money

Editor's note: Reihan Salam, a CNN contributor, is a columnist for Reuters; a writer for the National Review's "The Agenda" blog; a policy adviser for e21, a nonpartisan economic research group; and co-author of "Grand New Party: How Conservatives Can Win the Working Class and Save the American Dream."

(CNN) -- The deadline for enrolling in the Obamacare insurance exchanges for those who want coverage that starts on January 1 is about to pass.

Late last week, I became one of the 189,000 New Yorkers to sign up on New York state's partner exchange, NY State of Health. New York is one of 14 states that elected to set up its own exchange rather than rely on the federal government to do so. It is also one of the states that have accepted the Medicaid expansion.

In other words, New York, led by a popular Democratic governor, Andrew Cuomo, is all-in on Obamacare, and I decided to go along for the ride. I did this despite being opposed to Obamacare, and I am increasingly convinced that it will eventually have to be either drastically reformed or replaced outright.

Reihan Salam
Reihan Salam

Hardly anyone denies that Obamacare is in trouble. Though enrollment in the new exchanges has increased in recent weeks, it has still fallen far short of expectations. Many households that had purchased individual insurance policies in the past have had their policies canceled, and it is widely expected that many small business will receive cancellation notices in the year to come.

Last year, the Obama administration argued before the Supreme Court that the individual mandate was so essential to the success of the Affordable Care Act that it was inseverable. Yet last week the Department of Health and Human Services announced that it would not enforce the mandate against the not inconsiderable number of Americans who've had their policies canceled.

The Medicaid expansion has succeeded in providing more low-income Americans with insurance coverage, though not in the more than 20 states that have so far refused to take part in it. President Barack Obama and his allies had expected that as Obamacare implementation demonstrated the benefits of the new health law, the public would come to embrace it.

A new CNN/ORC International survey instead finds that 62% oppose the law, an increase of 4 percentage points since November. So far, at least, it seems as though the more familiar people become with Obamacare and its consequences, the less they like it.

Sen. Manchin pushes for ACA delay
First lady tapped to sell Obamacare

Like most Americans, I am an Obamacare critic, and I've been making the case against the President's approach to coverage expansion since it started to take shape. This isn't because I oppose government's role in helping people secure insurance coverage.

I'm convinced that we would be far better off as a country if all Americans had enough health insurance to protect themselves from financial disaster, and that government can and should provide a health safety net.

But Obamacare does both more and less than that. It limits innovation by insurers and providers that can help contain costs. It leaves many of the most dysfunctional aspects of America's health system, such as the monopoly power of big medical providers, largely untouched.

It treats different households with the same income levels very differently, depending on how they happen to buy insurance. Its sliding-scale subsidies provide at least some families on the exchanges with a strong disincentive against earning more income. And by raising the bar for what counts as acceptable private insurance, there's a real risk that it will lead to a net decrease in the number of people who have private insurance.

When I envision an ideal health system, I don't doubt that it would involve insurance marketplaces where consumers can compare different policies to make informed decisions. That is what the insurance exchanges are at their best. The big problem with the Obamacare exchanges is that they don't give insurers the option of offering consumers a wide range of products suited to their needs, and they don't offer enough flexibility on pricing.

Obamacare's defenders often claim that conservatives are hypocritical to oppose the law because it relies on the kind of insurance marketplaces that conservatives favor. What these critics miss is that the problem isn't having insurance marketplaces per se. Rather, Obamacare is narrowly constraining the kind of products available on the marketplaces, and in doing it is pricing a fair number of cost-conscious consumers out of the market, even after factoring in subsidies.

I should also note that I don't think Republicans have great solutions for America's health care woes either.

During the 2008 presidential campaign, Sen. John McCain introduced a controversial plan for coverage expansion that I greatly admired and which the Democrats fiercely attacked. Ever since then, Republicans have been extremely gun-shy about offering ambitious health reform proposals of their own.

I was sympathetic to the Massachusetts coverage expansion law that passed in 2006 under then-Gov. Mitt Romney, which struck me as a reasonable solution for an affluent state with a small uninsured population. (The Massachusetts experiment hasn't turned out as well as I had hoped, but that's a story for another day.)

And I've advocated a number of reforms designed to expand coverage, such as more federal funding for high-risk pools, federal and state reinsurance programs designed to make insurance more affordable and tax reforms designed to limit the health insurance tax subsidies that flow to high-income households while increasing those that flow to low- and middle-income households. None of these reforms is cheap, which is why they are opposed by the many of the same Republican lawmakers who oppose Obamacare.

Eventually, the GOP is going to have to recognize that any durable health care fix is going to cost money -- less than Obamacare, perhaps, but not nothing. For now, however, millions of Americans like me who don't believe that Obamacare is the right way forward for the country will have to learn to live with it.

For all my concerns about the Obamacare exchanges, I will say that as a healthy (knock on wood) New York City resident who is not eligible for subsidies, my experience with NY State of Health has been a good one. The reason is that New York state had already made a mess of its individual insurance market before Obamacare, and Obamacare might actually make it better, at least temporarily.

New York is one of relatively few states in which average premiums will be substantially lower in Obamacare's first year then they have been in the recent past, as Avik Roy of the Manhattan Institute observed in November. Roy estimates that average premiums in New York will decline by 40% under Obamacare, the biggest decline in the country. They will increase by 179 percent in Nevada, the state with the biggest increase.

So why are premiums going down in New York?

New York -- like Maine, New Jersey, Vermont, Washington and Massachusetts -- already has regulations on the books that impose community-rating and guaranteed issue on all insurers. That is, insurers have to accept all comers, regardless of health status, and they are strictly limited in the extent to which they can charge different consumers different amounts for insurance. But these states, with the exception of Massachusetts since its 2006 health law went into effect, don't impose a mandate.

The result has been that sick people have flocked to the individual insurance market while healthy people have avoided it at all cost, and this in turn has led to higher premiums.

By pushing healthy people to buy coverage, the individual mandate allowed insurers to lower premiums in the individual market in Massachusetts, and insurers are betting that it will do the same in New York. Indeed, some researchers have called New York state a "poster child" for the individual mandate.

The question for insurers and New Yorkers buying coverage on the exchanges is whether the relatively low premiums on the New York state exchange are sustainable.

If the individual mandate is never enforced (a very real possibility), insurers could find themselves losing enormous sums of money as the problems that plagued New York's individual insurance market in the past reassert themselves. (There are, to be sure, more attractive alternatives to the individual mandate that state governments might embrace, like default insurance.)

People often accuse conservatives of rooting for Obamacare to fail. I'm personally rooting for an outcome in which all Americans can have access to affordable health coverage. I'm just deeply skeptical that Obamacare is the best way to achieve that goal.

But if I'm wrong, if Obamacare and the new health insurance exchanges turn out to be a great success, I will be among the beneficiaries.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Reihan Salam.

ADVERTISEMENT
Part of complete coverage on
April 18, 2014 -- Updated 2047 GMT (0447 HKT)
Jim Bell says NASA's latest discovery support the notion that habitable worlds are probably common in the galaxy.
April 18, 2014 -- Updated 1817 GMT (0217 HKT)
Jay Parini says even the Gospels skip the actual Resurrection and are sketchy on the appearances that followed.
April 18, 2014 -- Updated 1752 GMT (0152 HKT)
Graham Allison says if an unchecked and emboldened Russia foments conflict in a nation like Latvia, a NATO member, the West would have to defend it.
April 18, 2014 -- Updated 1311 GMT (2111 HKT)
John Sutter: Bad news, guys -- the pangolin we adopted is missing.
April 19, 2014 -- Updated 1710 GMT (0110 HKT)
Ben Wildavsky says we need a better way to determine whether colleges are turning out graduates with superior education and abilities.
April 18, 2014 -- Updated 1026 GMT (1826 HKT)
Charles Maclin, program manager working on the search and recovery of Malaysia Flight 370, explains how it works.
April 18, 2014 -- Updated 1250 GMT (2050 HKT)
Jill Koyama says Michael Bloomberg is right to tackle gun violence, but we need to go beyond piecemeal state legislation.
April 17, 2014 -- Updated 1845 GMT (0245 HKT)
Michael Bloomberg and Shannon Watts say Americans are ready for sensible gun laws, but politicians are cowed by the NRA. Everytown for Gun Safety will prove the NRA is not that powerful.
April 17, 2014 -- Updated 1328 GMT (2128 HKT)
Ruben Navarrette says Steve Israel is right: Some Republicans encourage anti-Latino prejudice. But that kind of bias is not limited to the GOP.
April 16, 2014 -- Updated 2323 GMT (0723 HKT)
Peggy Drexler counts the ways Phyllis Schlafly's argument that lower pay for women helps them nab a husband is ridiculous.
April 16, 2014 -- Updated 1642 GMT (0042 HKT)
Rick McGahey says Rep. Paul Ryan is signaling his presidential ambitions by appealing to hard core Republican values
April 16, 2014 -- Updated 1539 GMT (2339 HKT)
Paul Saffo says current Google Glasses are doomed to become eBay collectibles, but they are only the leading edge of a surge in wearable tech that will change our lives
April 15, 2014 -- Updated 1849 GMT (0249 HKT)
Kathleen Blee says the KKK and white power or neo-Nazi groups give haters the purpose and urgency to use violence.
April 16, 2014 -- Updated 1156 GMT (1956 HKT)
Sen. Sheldon Whitehouse and Rep. Henry Waxman say read deep, and you'll see the federal Keystone pipeline report spells out the pipeline is bad news
April 16, 2014 -- Updated 1153 GMT (1953 HKT)
Frida Ghitis says President Obama needs to stop making empty threats against Russia and consider other options
ADVERTISEMENT