Obamacare’s Nightmare Scenarios

May 14 2013 @ 11:32am

So you’re not depressed enough by the IRS outrage or the DOJ’s secret seizure of AP emails? Even Jon Cohn lists five ways that the ACA could disappoint. One of his concerns:

Administration officials say they expect strong competition. And it’s worth noting that the Massachusetts exchange, which most closely resembles the one the federal government is setting up, has generally only offered a handful of plans, and yet premiums have remained low. (The limited choice has also arguably been easier for consumers to navigate.) But Massachusetts gives officials power to aggressively negotiate bids, in order to drive down prices and encourage competition. In many states, exchanges will lack that authority. Jay Angoff, a former insurance commissioner from Missouri who worked on Obamacare, says it’s possible that what develops is “a government-compelled, taxpayer-subsidized market, but most of the inefficiencies of the [current] system are still there.” For insurers, that’d be the best of all worlds.

Which is why, at some point, surely, if only for fiscal reasons, the government will have to step in. Suderman highlights other potential problems:

[L]arge numbers of the uninsured are likely to have their work disrupted. Already we are seeing anecdotal evidence and government jobs data suggesting that employers are capping hours for part-time workers in response to the law’s requirement that employers provide health coverage to full time employees. Small businesses are reportedly weighing the possibility of firing employees or turning them into contractors. Researchers at UC Berkeley recentlyestimated that 2.3 million workers are at risk of having their hours cut back because of the law.