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
November 24, 2014 -- Updated 2310 GMT (0710 HKT)
If Obama thinks pushing out Hagel will be seen as the housecleaning many have eyed for his national security process, he'll be disappointed, says David Rothkopf.
November 25, 2014 -- Updated 1311 GMT (2111 HKT)
The decision by the St. Louis County prosecuting attorney to announce the Ferguson grand jury decision at night was dangerous, says Jeff Toobin.
November 25, 2014 -- Updated 0857 GMT (1657 HKT)
China's influence in Latin America is nothing new. Beijing has a voracious appetite for natural resources and deep pockets, says Frida Ghitis.
November 24, 2014 -- Updated 2151 GMT (0551 HKT)
Iranian President Hassan Rouhani speaks during a press conference in the capital Tehran on June 14, 2014.
The decision to extend the deadline for talks over Iran's nuclear program doesn't change Tehran's dubious history on the issue, writes Michael Rubin.
November 21, 2014 -- Updated 1925 GMT (0325 HKT)
Maria Cardona says Republicans should appreciate President Obama's executive action on immigration.
November 21, 2014 -- Updated 1244 GMT (2044 HKT)
Van Jones says the Hunger Games is a more sweeping critique of wealth inequality than Elizabeth Warren's speech.
November 20, 2014 -- Updated 2329 GMT (0729 HKT)
obama immigration
David Gergen: It's deeply troubling to grant legal safe haven to unauthorized immigrants by executive order.
November 21, 2014 -- Updated 0134 GMT (0934 HKT)
Charles Kaiser recalls a four-hour lunch that offered insight into the famed director's genius.
November 20, 2014 -- Updated 2012 GMT (0412 HKT)
The plan by President Obama to provide legal status to millions of undocumented adults living in the U.S. leaves Republicans in a political quandary.
November 21, 2014 -- Updated 0313 GMT (1113 HKT)
Despite criticism from those on the right, Obama's expected immigration plans won't make much difference to deportation numbers, says Ruben Navarette.
November 21, 2014 -- Updated 0121 GMT (0921 HKT)
As new information and accusers against Bill Cosby are brought to light, we are reminded of an unshakable feature of American life: rape culture.
November 20, 2014 -- Updated 2256 GMT (0656 HKT)
When black people protest against police violence in Ferguson, Missouri, they're thought of as a "mob."
November 19, 2014 -- Updated 2011 GMT (0411 HKT)
Lost in much of the coverage of ISIS brutality is how successful the group has been at attracting other groups, says Peter Bergen.
November 19, 2014 -- Updated 1345 GMT (2145 HKT)
Do recent developments mean that full legalization of pot is inevitable? Not necessarily, but one would hope so, says Jeffrey Miron.
November 19, 2014 -- Updated 1319 GMT (2119 HKT)
We don't know what Bill Cosby did or did not do, but these allegations should not be easily dismissed, says Leslie Morgan Steiner.
November 19, 2014 -- Updated 1519 GMT (2319 HKT)
Does Palestinian leader Mahmoud Abbas have the influence to bring stability to Jerusalem?
November 19, 2014 -- Updated 1759 GMT (0159 HKT)
Even though there are far fewer people being stopped, does continued use of "broken windows" strategy mean minorities are still the target of undue police enforcement?
November 18, 2014 -- Updated 0258 GMT (1058 HKT)
The truth is, we ran away from the best progressive persuasion voice in our times because the ghost of our country's original sin still haunts us, writes Cornell Belcher.
November 18, 2014 -- Updated 2141 GMT (0541 HKT)
Children living in the Syrian city of Aleppo watch the sky. Not for signs of winter's approach, although the cold winds are already blowing, but for barrel bombs.
November 17, 2014 -- Updated 1321 GMT (2121 HKT)
We're stuck in a kind of Middle East Bermuda Triangle where messy outcomes are more likely than neat solutions, says Aaron David Miller.
November 17, 2014 -- Updated 1216 GMT (2016 HKT)
In the midst of the fight against Islamist rebels seeking to turn the clock back, a Kurdish region in Syria has approved a law ordering equality for women. Take that, ISIS!
November 17, 2014 -- Updated 0407 GMT (1207 HKT)
Ruben Navarrette says President Obama would be justified in acting on his own to limit deportations
ADVERTISEMENT