By lambert strether. Originally published at Corrente.
Rahm’s little brother Zeke has an Opinion piece in the Journal on ObamaCare. First, the state of play on the health insurance exchanges:
Setting up the exchanges will pose a host of technological challenges, such as digitally linking an individual’s IRS information (which determines a subsidy level) to the insurance offerings in the individual’s home area and to employment data [and DHS data for citizenship and credit reporting data] —while simultaneously factoring in Medicaid eligibility [which varies by state].
Bugs in the computer software are bound to pop up, and the quality of the user experience will undoubtedly need improvement. … But IT problems aren’t the ones that should keep you up at night. Such glitches will be ironed out within a few years, and certainly by 2016 browsing your health-insurance exchange will be very much like browsing Amazon and other online shopping sites.
That’s their story and they’re sticking to it.*
So now to “the young invincibles,” who are key to the success of ObamaCare:
Insurance companies worry that young people, especially young men, already think they are invincible, and they are bewildered about the health-care reform in general and exchanges in particular. They may tune out, forego purchasing health insurance and opt to pay a penalty instead when their taxes come due.
The consequence would be a disproportionate number of older and sicker people purchasing insurance, which will raise insurance premiums and, in turn, discourage more people from enrolling. This reluctance to enroll would damage a key aspect of reform.
Insurance companies are spooked by this possibility, so they are already raising premiums to protect themselves from potential losses. Yet this step can help create the very problem that they are trying to avoid. If premiums are high—or even just perceived to be high—young people will be more likely to avoid buying insurance, which could start the negative, downward spiral of exchanges full of the sick and elderly with not enough healthy people paying premiums.
Fortunately, there are solutions. First, young people believe in President Obama. They overwhelmingly voted for him. He won by a 23% margin among voters 18-29—just the people who need to enroll. The president connects with young people, too, so he needs to use that bond and get out there to convince them to sign up for health insurance to help this central part of his legacy.
Leave aside all that shinola about the “bond” young people have with Obama; 2008 is so over. And does anybody really care about Obama’s legacy except Obama? And leave aside the student debt crisis, and youth unemployment, even if it is horrific.
What’s one thing you know about young people today, maybe the most obvious thing? That’s right: They’re totally wired, totally digital, totally computer-savvy. (They are also said by some to multi-task and have very short attention spans.)
So if you had an Internet product, and you wanted to turn young people off, right at the point of purchase, what would you do? That’s right: You’d build a platform that was “buggy,” with a “user experience” that “needs improvement,” that has “glitches,” and that will take three years to straighten out.
Which is exactly what ObamaCare’s exchanges are going to be like, according to Rahm Emmanuel’s little brother. Yikes.
NOTE * Never mind that on Amazon you’re comparing a book to a book, or a laptop to a laptop, or on Expedia an airline flight to a flight. In those cases, both terms of the comparison are known; the goods are commodities. The information asymmetry between buyer and seller is quite small (and there are reviews. Will there be reviews on the exchanges? Why do I doubt that?). However, on the exchanges, plans are compared by actuarial value (even if expressed in dollars), and those values “differ substantially” from insurer to insurer (Kaiser). And so the information asymmetry between buyer and seller is much greater, and the exchanges cannot fix it (and worse, sucker citizens into believing they’re comparing lemons to lemons when in fact they are not).