ObamaCare is bleeding out

The beleaguered ObamaCare exchange system took another serious blow recently, as the large insurer Anthem announced it would be pulling out of Ohio next year, leaving about 20 counties with zero options on the exchange. They are mulling whether to stay in Missouri and Colorado — where for huge swathes of each state, they are the only option left.

The reason? President Trump.

He has been threatening to undermine the exchange system, and so Anthem is getting out of some of its shakier positions. It's an object lesson in the weakness of super-complicated programs that require frequent attention from federal authorities. The next time Democrats take a bite at the health-care policy apple, they should strongly prefer big, straightforward options like Medicare for all — which can survive much better on autopilot.

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So what is Trump doing? He has threatened to cut the insurer subsidies that are built into ObamaCare, and according to Anthem, provided a highly unstable regulatory environment. In a Wall Street Journal article, the company blamed the threats about cost-sharing payments, as well as shrinking markets and "continual changes in federal operations, rules, and guidance." Critically, that reasoning has nothing to do with Ohio in particular, suggesting that if the chaos continues, it will likely pull out of the rest of the exchanges — throwing hundreds of thousands off their insurance and perhaps leading other insurers to bolt.

This demonstrates a rather ironic aspect of ObamaCare. The policy is politically moderate — in that it was somewhat in between what the left and right would want — but it is fairly radical policy-wise, in terms of preferring the new and experimental to the tried and true. The way that private markets allocate resources is completely at odds with how any humane person would want health-care resources allocated. As we all have witnessed over the last several years, it takes a tremendous amount of regulation and babysitting to coax functioning private insurance markets to life — and yet more effort to keep them functioning.

ObamaCare was working reasonably well. But after just a few years, it very obviously needs an overhaul. The subsidy structure is far too stingy, it countenances way too much hospital consolidation, it provides thin-to-nonexistent market options in many parts of the country, and it badly needs a public option backstop to provide options where insurers will not. On top of that, federal regulators were still working on new rules to fix problems like huge out-of-network emergency bills right up through the end of the Obama administration.

All this complexity provides two points of weakness during times of Republican government. First, Republicans might deliberately sandbag needed regulatory efforts, and semi-plausibly blame ensuing problems on bad policy design. Or, the new government may simply be too incompetent to regulate effectively, even if it wants to. Both of those things appear to be happening now. It would probably be possible to cajole or threaten Anthem into staying in the market, but Republicans — through some combination of malice and stupidity — aren't going to do it.

Either way, the result is likely to be a partial or complete collapse of the ObamaCare exchanges over the next few years — even if the Republican health-care reform bill doesn't blow them up altogether.

Medicare, by contrast, both requires far less attention from federal regulators and is far stronger politically. It does need some regulation, but not constant and endless attention just to keep from falling to pieces. And it's not a coincidence that the incomprehensibly vicious Republican health-care bill still leaves Medicare mostly intact. If you mess around with Medicare, you inspire instant enraged backlash from the most reliable voting demographic in the country.

The bill does mount an all-out assault on Medicaid, because poor people are less likely to vote, but even there Republicans have backloaded most of their cuts so they won't take effect immediately. Even someone as monstrous as Paul Ryan doesn't dare to simply delete the program at a stroke — he has to let the poison take effect over many years.

Of course, Medicare isn't completely invulnerable. But a universal single-payer program is as close as we're likely to get. Straightforward, easy-to-understand policy where the lines of responsibility are clear and the necessary regulations aren't wildly complicated or innovative is the best policy fit for the janky American state.

Next time they get a chance Democrats must get over their nerves and properly entrench universal health care.