In the midst of the troubled rollout of the Affordable Care Act, the Obama administration has done a fairly effective job persuading red-state Democrats to refrain from endorsing legislative changes that would substantively cripple the new law. But organizing skittish red-state senators is one thing; organizing Bill Clinton is another. The former president now says that the government should change Obamacare to allow everybody in the individual market who likes their plan to keep it:
How could you change the law to do this? It would be really, really hard. The main rationale for Obamacare is that the individual-health-care market is dysfunctional. Most people who can’t get group insurance — either through their job or through a government-financed plan, like Medicare — can’t get any insurance at all. Insurers have to make sure they don’t attract sick customers, so they either attach hidden conditions to their insurance to protect against covering expensive care, or else limit their policies to very healthy people. That’s why people with individual insurance are much less satisfied than people with group-based insurance.
It is true that some of those very healthy people can get cheap insurance, as long as they remain healthy. But insurance requires spreading risk from the healthy to the sick. That’s how employer insurance works, and people like that kind of insurance much more. The math is also inescapable. If insurance companies have to charge sick people less than it costs to cover their medical expenses, then the money needs to come from somewhere. Obamacare furnishes some of that money through tax credits, some of it through Medicaid expansions, but a portion comes from higher premiums to people who are healthy.
If you want to make sure every healthy person paying low rates in the individual market right now can keep their plan, then you have two choices. One is to abolish Obamacare altogether, which means making it impossible for people with preexisting conditions to get affordable insurance. Clinton doesn’t want to do that — he continues to endorse the law. The second is to come up with some other source of funding to compensate insurance companies for their losses. Clinton doesn’t say where that money would come from.
When Clinton delivered a well-received speech at the Democratic National Convention last summer, President Obama joked he should appoint the former president as “Secretary of Explaining Stuff.” Of course, if he actually had a job like that, he would be fired within days.