White House Integrity Problem: Next Up--Obamacare

White House Integrity Problem: Next Up--Obamacare

REUTERS/Yuri Gripas

To say that the White House has a credibility crisis these days is an understatement akin to suggesting that the IRS can sometimes be a little crabby with taxpayers. 

The lack of candor or even outright falsehoods coming from high-ranking officials in the administration of Barack Obama have become a connecting thread that joins a bunch of scandals. Whether it’s the mutation of talking points on the Benghazi terrorist attack, the parade of IRS officials who knew about targeting conservatives but never informed Congress, or an Attorney General who professed in Congressional testimony to know nothing about potential prosecution of journalists as spies three years after signing off on a warrant request to spy on Fox’s James Rosen on that very basis, Americans have been given a clear lesson on the integrity of the current administration.

Two recent polls suggest that the lesson is sinking in. The Wall Street Journal/NBC News joint survey  shows Barack Obama’s job approval number holding steady at a mediocre 48 percent, but that’s where the good news ends. 

Solid majorities believe that the scandals raise questions about the integrity and honesty of the White House – 58 percent on Benghazi and the Department of Justice scandals, and 55 percent on political corruption at the IRS.  And while Obama’s job approval holds steady since January’s survey in the same series, positive marks on his qualities have eroded significantly, such as “strong leadership” (-7 points to 46 percent), “honest and straightforward” (-5 points to 42 percent), and “good Commander-in-Chief” (-9 points to 42 percent).

In a separate survey, Bloomberg News found the same slippage on Obama administration credibility. In this case, though, the IRS scandal directly impacted their views of Obama’s integrity. A large majority (53/34) believe Obama didn’t tell the truth when he claimed to have only known of the IRS targeting of conservatives from news reports. Unlike the WSJ/NBC poll, Bloomberg saw a six-point drop in Obama’s job-approval numbers, although that comparison comes from their last survey on the question in February rather than April.

So far, the credibility crisis has its genesis more in behavior than on policy, but that may change. The more we find out about Obama’s biggest legislative victory, the Affordable Care Act (ACA), the more it becomes apparent that the White House sold Americans a bill of goods on health-care reform. 

Let’s start with the promises made about the benefits of Obamacare.  President Obama insisted throughout his presidential campaign and first term that Americans who liked their health-care insurance plans would be able to keep them, which has proven untrue for millions of Americans already.

He also insisted that the bill, with its many new coverage mandates for insurers, would still only result in lower premiums. “If you already have health insurance,” Obama told voters when he rolled out his Obamacare plan in 2007, “the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.” 

In 2008, Obama got more specific, promising that health-care reform would reduce premiums “by as much as $2500 per family.”

Fast forward to 2013.  Not only have insurance premiums risen in the three years since passage of the ACA, they’re about to explode. In California, younger adults purchasing plans on the individual exchanges of Obamacare could see those premium prices more than double from their current level. Forbes’ Avik Roy did some comparison shopping and discovered that the “bronze” level of coverage in 2014, the lowest acceptable under the Obamacare mandate, will cost a typical 25-year-old non-smoking male 64 percent-117 percent more than he paid in 2013.  For 40-year-old male non-smokers, the increase will be between 73 percent and 146 percent. 

No one who understands risk pools would be surprised at these trends.  When universal coverage and set benefit mandates are applied, they increase the costs associated with managing risk pools. Thanks to Obamacare, policies that focus on hospitalization and pay for routine medical maintenance visits with health-savings accounts – which actually do lower costs – are no longer valid under the ACA.  The increased risks and costs force insurers to charge more for coverage, not less, as Obama and his allies repeatedly promised.

Suddenly, though, Obama and his allies have changed their tune.  Instead of talk about reduced premiums, the selling point now is that price hikes are worth it for all of the increased benefits.  The Wall Street Journal notes that this argument makes Obamacare a bait-and-switch product, and further points out that the increased benefits were forced on many of the consumers. 

For instance, the same younger consumers Roy analyzed for his comparison largely don’t need comprehensive coverage, because they tend to be much healthier than older Americans. Obamacare forces them to spend thousands of dollars when they will likely only incur hundreds of dollars in costs over the same period. That’s why the very health-insurance strategy that Obamacare forbids is the one that makes the most sense for younger Americans and for reducing premiums in general.

Where does that extra money go?  It subsidizes the premiums of older and less healthy Americans, which provides a false buffer to a politically important constituency.  It also was supposed to subsidize universal coverage, another selling point of the ACA in 2010.  Does it succeed in achieving universal coverage? Not according to the CBO, which projects that 31 million Americans will still be uninsured ten years from now.

However, the average taxpayer-provided subsidies required to keep up with premium increases will rise 50 percent over the same period, “from $5,290 in 2014 to $7,900 in 2023.” 

The middle class will end up having to foot the bill for this massive entitlement program, thanks to the progressive scale of subsidies and the distribution of benefits. The failure of the Affordable Care Act to either be affordable or to provide the promised amount of care will become acutely apparent by the end of this year, as Americans prepare to comply with Barack Obama’s “reform.” 

Whatever is left of the administration’s credibility will be erased by the outcomes of its healthcare policy, but that won’t be the last word.  That will come the following November, when Democrats have to defend their bait-and-switch, goalpost-shifting defense of Obamacare.