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Obamacare's Fatal Flaw

Updated: Tuesday, November 19 2013, 11:46 AM EST

The roll-out of Obamacare has been plagued with technological setbacks and lower-than-expected enrollment, prompting an apology from President Barack Obama.

"We fumbled the rollout on this healthcare law," Obama said last week, after millions of Americans were kicked off their existing health insurance plans despite presidential assurances to the contrary.

But insurance broker Ari Gross says an apology might not fix the mess that has engulfed the Affordable Care Act. That's because almost half his clients have lost their insurance, fallout from the new law he's not sure can be fixed.

"It's such a large animal at this point, I don't even know if there's a way to tweak it," Gross said. "In theory we could go back today, but there is no reset button."

The problem, he says, is the underlying premise of the law that healthy people were supposed to sign up to subsidize care for everyone else.

"The reality is, this system right now, it simply can't work because our young population - which is vital to the success of the system - they're not buying it," Gross said.

It's a fatal flaw in the law that may come down to numbers.

The Obama administration estimates it needs 2.7 million young healthy adults to sign up in the first year to make the law work, but so far only 100,000 people have enrolled, with no word yet on how much this small number is made up of young, healthy adults. In Maryland only 1,700 people have signed up for plans.

At the same time, Medicaid enrollment is drastically higher -- people who aren't paying into the system.

The lack of interest among the young and healthy and the growing Medicaid numbers do not come as a surprise to Towson Economics Professor Thomas Rhoads.

"These young people, they're making an economic decision, a cost-benefit analysis already," Rhoads noted. He says the low participation rate reveals what he believes to be the true purpose of Obamacare.

"I think when we really get to the heart of the matter Obamacare is really about insurance reform, not really about healthcare reform," Rhoads said.

It could lead to more drastic changes.

"The fee that people are paying if they do not get individual health insurance for them or their families, it's a tax according to the Supreme Court," Rhoads said. "So why didn't they just use a tax that's increased on everybody in order to get Medicare applied to more people?"

A single payer system, says Jeff Singer, adjunct professor of public policy at University of Maryland, would ultimately save money.

"In the United States roughly 30% of all healthcare dollars are spent on administrative costs," Singer said. "That's close to $800 billion a year that doesn't go to healthcare."

Still, Gross says he worries a system without private insurance could do more harm than good.

"We're on the cutting edge of medicine; this is where everything is happening," Gross said. "That's because we have a system where people paid for their service. Once we turn this into a federal system where's the motivation?"

Even if he's not sure that the current law can be salvaged

"This was revolutionary, but it was not built properly," Gross said.

But Singer counters that health insurance may simply be obsolete.

"I think 30 years from now we will think of private insurance in the same way that we think about blacksmiths," Singer said. "It was an activity that had a lot of use in a society in a particular historical time."

To illustrate just how much ground Obamacare has to make up, as of November 1 nearly 81,000 Marylanders have enrolled in Medicaid, while only 3,000 have signed up for private insurance.         

Obamacare's Fatal Flaw


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