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Cure for health care overhaul

The rollout of Obamacare could hardly have gone worse. To understand what happened and judge whether things might improve, notice that the problems fall into three fairly distinct categories: defects in the plan, defects in its initial execution and defects in the way it was sold. In the end, only the first will matter.

The website failure is a case of bungled execution — a landmark of managerial incompetence. Glitches were to be expected, but this has turned into something else. Apparently, officials saw it coming. The only surprise is that the White House, despite knowing what was at stake, stood there and let it happen.

The other big embarrassment is that insurance policies are being canceled despite President Barack Obama's promise that people could keep them. Again, the fault isn't with the plan — it's with the way the plan was sold. Obama's promise was either an audacious oversimplification (if you're feeling generous) or a bald-faced lie (if you aren't). Even so, the cancellations don't point to fatal defects in the design, any more than does the website farce.

The Patient Protection and Affordable Care Act was always intended to disrupt the individual health-insurance market. Forcing insurers to meet new standards was a core goal. The grandfathering of pre-reform policies was presumably intended to limit the initial disruption, but insurers declined to play along.

More generally, the reform aims to create new patterns of risk-pooling, cross-subsidy and cost recovery across the industry. It's a far-reaching restructuring — and its effects, by the way, won't be confined to the individual market.

Instead of trying to explain what was about to happen and why — no easy task — Obama and his allies offered false reassurance. They decided to say that the reform, though ranking as a world-historical achievement, was at the same time no big deal.

This made no sense, but they said it anyway to get the law passed.

Despite the current outcry, the reformers will be forgiven for all this if the plan ends up working. Remember that its main purpose — to widen access — is compelling. For that reason alone, it deserves to succeed, and with running repairs, it still might.

However, it has flaws the country hasn't yet grasped. It fails to achieve fully universal coverage. (The emerging Medicaid gap, caused by states failing to expand eligibility, compounds that problem.) Instead of simplifying the financing of U.S. health care, the reform makes it even more complicated by providing means-tested subsidies in the form of tax credits. Its defense against getting too many sick people and not enough healthy ones in the risk pool is questionable: The penalties for opting out may be too mild. Above all, its cost controls are so far statements of intent, not incentives embedded in the design.

These are all aspects of the compromise that the Obama administration thought it had to strike with public opinion. Rather than attempting to replace the employer-based model at a stroke, the Democrats bolted new bits and pieces on to a badly broken system. "Medicare for all" would have been one way to solve or ameliorate all of the problems I just mentioned — but the White House calculated that the country didn't want government-run health care. That was no doubt correct, and the past few weeks are unlikely to have changed the country's mind.


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