Government Shuts Down as Obamacare Exchanges Open

Washington DC

Brinksmanship politics has led to a shutdown of the United States government — the first in seventeen years but the eighteenth in the history of the country. The Affordable Care Act — the health care reform championed by President Barack Obama — left Congress divided. At 1 a.m. Tuesday morning, the House of Representatives voted, mostly along party lines, to convene a special conference between the two bodies of Congress in order to compromise on how to fund the government, specifically in regards to the health care law.

Many Republicans strongly oppose any spending bill that funds the Affordable Care Act, a position they have reiterated during all votes over temporary funding measures. For their part, Senate Democrats have indicated that they are unwilling to hold that conference because they have been asking for months for a meeting to discuss the full-year budget, but will not do so while the government is shut down.

Meanwhile, implementation of the health care reform’s cornerstone provision — the insurance exchanges — is essentially complete. On Tuesday morning, while federal workers reported to work either to clear off their desks or to work with the possibility of going without pay, the state marketplaces opened for enrollment. October 1 marks an important day in the history of the Affordable Care Act, which was designed to provide subsidized health care to millions of uninsured Americans and make health care more affordable for many others, the most ambitious social program implemented in the United States since Medicare was passed in the 1960s. The irony is that the exchanges opened the same day as the government was shut down because lawmakers in the House and Senate could not agree on funding the health care law.

Since the Affordable Care Act was first passed in March 2010, Republican opposition of the health care reform has become a standard party position. Some have argued the law is a “jobs killer.” Others have said that the founding fathers would not approve it. Senator Orrin Hatch wrote in a piece for the Hill that that to come to “any other conclusion” than that the mandate is unconstitutional and “requires treating the Constitution as the servant, rather than the master, of Congress.”

Still, others have blamed Obamacare’s provisions for increasing the cost of health insurance for business and individuals, an accusation that the Democrats deny. Republicans, despite having introduced the idea of the individual mandate as the party’s alternative to President Clinton’s health-reform bill, have fought implementation for months, and House Republicans committed to passing a short-term spending bill only if discretionary spending for the Affordable Care Act is eliminated.

As the possibility of a government shutdown began to seem more likely last week, policy experts warned that cutting off funds in a government shutdown would not stop funding for the implementation of the health care reform. “A shutdown per se doesn’t stop the Affordable Care Act,” Doug Holtz-Eakin, a former director of the Congressional Budget Office who now leads the American Action Forum, an advocacy group opposed to the health law, told Bloomberg.

The Affordable Care Act relies primarily on mandatory spending, not appropriations, meaning government inaction would not prevent the exchanges from being operational. The massive computer system will still connect federal agencies, from the Internal Revenue Service to the Department of Homeland Security, to determine whether customers are eligible for coverage and if they qualify for federal subsidies to make coverage more affordable. “None of these agencies will in their entirety shut down, and their computer infrastructure is a pretty essential thing,” Holtz-Eakin added.

Exchanges are the key provision of Obamacare, designed to allow consumers to comparison-shop for health insurance policies in online marketplaces where their collective bargaining power will theoretically foster competition and drive down prices. Except for the provision that mandated each stated expand Medicaid, in a July 2012 decision, the Supreme Court upheld the constitutionality of the law and the exchanges.

As Michael Horowitz, who was general counsel for President Ronald Reagan’s budget office during a during government shutdown, told The New York Times, the White House has room to maneuver in that it can decide which workers should be furloughed, which agencies to close entirely, and what systems are deemed vital. In such situations, many government functions continue. Social Security checks are still be sent out, and Medicare still pays doctors and hospitals. ”For Congress to ask for a shutdown when the opposite political party is in charge of the White House is my definition of insanity,” Mr. Horowitz.

“The Affordable Care Act is moving forward. That funding is already in place. You can’t shut it down,” Obama told his Republican opponents in a televised statement at the White House on Monday. Comparatively, in an interview with CNN, Texas Senator Ted Cruz, who campaigned vigorously for fellow Republican lawmakers to vote against any spending proposal that funded Obamacare, said that what he wants “is to keep the government running and at the same time to deal with the harms, the millions of Americans who are at risk of losing their healthcare, are facing skyrocketing insurance premiums.”

Millions of Americans, 7 million to be exact, are expected to sign up for insurance via the exchanges before the open enrollment period ends March 31, 2014. A further 8 million are expected to become eligible for Medicaid in states that chose to expand the program. The majority of the early enrollees to the exchanges are expected to be proportionally older and sicker compared to the broader population, as well as more likely to have been without insurance for some time.

The process of shopping for coverage was meant to be as easy as comparison-shopping for an airline ticket or a hotel room through a site like Priceline. However, delays in the implementation process and technical problems mean the exchanges will not be fully operational for another week. The Department of Health and Human Services, which operates federal marketplaces in 36 states that chose not to create their own systems, has said technical glitches are likely.

“We will fix them and move on. Is it a sign that the law is flawed and failed? I don’t think so. I think it’s a sign that we’re building a piece of complicated technology,” Secretary Kathleen Sebelius said in a Tuesday statement seen by Reuters. So far, reported the publication, initial checks on 18 of those federally-facilitated exchanges found that some users were shown error messages like: “We have a lot of visitors on our site right now and we’re working to make your experience here better. Please wait here until we send you to the login page.”

Health department officials also said Tuesday that the multimillion-dollar media campaign to educate prospective beneficiaries would continue, targeting young and healthy Americans, especially black and Hispanic men between the ages of 18 and 35 in large cities in Florida, Texas, Illinois, and California. To function as intended, the marketplaces need a broad, healthy risk pool to keep staggering rate increases from occurring.

The premiums of healthy, cheap-to-insure people cover the big bills for the relatively small number of sick people. So if the exchanges don’t enroll enough young, healthy people, insurers will have to raise everyone’s premiums. However, spending from the opposition has outpaced the media campaigns run by Obamacare supporters by more than four-to-one. Data shows that the health care reform remains unpopular with around 46 percent of the public.

Follow Meghan on Twitter @MFoley_WSCS

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