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Poor delivery leaves Obamacare virtually stillborn

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Fears are mounting that US President Barack Obama’s health care reform package will be permanently derailed by its botched introduction.

More than two months after it was officially launched to great fanfare, the website through which many Americans were supposed to buy new and improved health insurance cover remains riddled with bugs and technical glitches that frustrate the attempts of many.

As at the end of last month, fewer than 30,000 people had been able to choose a health insurance policy through the federal website HealthCare.gov.

Underlining the extent of the problem, a senior US Health Department official told Congress on 19 November that about 30 per cent of the site had yet to be developed.

The failure of the website has turned into a massive political headache for President Obama, undermining voter trust and confidence, and threatens to cripple the hard-fought reform.

The website failure has given life to two separate, yet related, crises.

The website was meant to function as an exchange, allowing consumers – many of them purchasing health insurance for the first time in their lives – to select an insurance policy from a range of offerings from private health funds.

Under Obamacare, health insurers are banned from rejecting consumers with pre-existing illnesses, or from charging them higher premiums. The trade-off for the funds was that, with everyone required to have insurance, they would for the first time have access to a much larger pool of young, healthy people to help defray the risk posed by older, more frail members.

But the difficulty people experience in signing up has fuelled concerns that only those with a significant incentive to sign up – particularly those with a serious, pre-existing illness – will successfully enrol, while the young and healthy will by and large give up, leaving insurers with a disproportionate share of the ill on their books. This in turn would force them to put up premiums, creating an even greater deterrent for the healthy young to sign up, and creating,  as The Economist put it, “a dreaded ‘death spiral’ of soaring premiums and tumbling enrolment”.

The second problem is that many people have had their existing health insurance cover cancelled as insurers have moved to adapt their offerings to fit in with the requirements of Obamacare, leaving them without a policy.

President Obama has tried to fix this problem by announcing insurers would be allowed a year’s grace to extend cancelled policies, but many insurers have baulked at the complications and expense of resuming discarded policies, while the re-emergence of older skimpier plans could undercut the competitiveness of new offerings through Obamacare.

President Obama’s political opponents have been unable to hide their glee at Obamacare’s massive problems, while advocates of health system reform are increasingly despairing of the Administration’s ability to fix what has become a huge political and administrative mess.

Adrian Rollins