The rollout of Obamacare has been a disaster. You did build that, President Obama. (Charles Dharapak / AP)
The disastrous rollout of the $634 million Affordable Care Act health exchange this month is the latest in a long line of flawed Obama administration investments. From green energy startups to the health market overhaul, the White House has wasted billions in taxpayer dollars.
Meanwhile, Aon Hewitt’s private health insurance exchange serving thousands of corporate employees has launched without a glitch. How come? Because when it comes to his federally-funded businesses, President Barack Obama didn’t build that.
“Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges,” sneered the president in the 2012, belittling American entrepreneurs. “If you’ve got a business – you didn’t build that.”
But Obama has it backwards. Private enterprise creates markets at enormous financial risk to entrepreneurs and investors. Government infrastructure follows. Henry Ford built the auto industry; the resulting tax revenue built roads. Private investment demands results, or the capital goes elsewhere. By contrast, the president is spending taxpayer money with political, not financial, goals. No business plan. No beta test. No consequences. If the Obamacare exchange is a catastrophe, so what? Taxpayers can’t disinvest.
“Obama would have had his own resources at risk if this were a private company,” says Michigan political consultant Stu Sandler. “But it’s not. The result is hundreds of millions of dollars spent on a website that doesn’t work.”
As the federal health exchange was crashing, a private health exchange serving businesses like Walgreens’ 160,000 employee workforce was going smoothly. Why?
Because the exchange’s creator, health consulting firm Aon Hewitt, has had to meet customer demands or lose business. So before it rolled out its exchange in 2011, Hewitt first beta tested its exchange on its own employees.
Despite over three years of preparation, Obamacare tripped out of the gate (“It’s not even ready for beta testing in my book,” computer programmer Luke Chung told CBS News). Imagine if the White House had subjected its own executive branch employees to it first?
Hewitt then rolled out its innovative exchange for Sears and Darden Restaurants in 2012. The exchange is designed so that businesses give their employees “credits” (subsidies) to shop multiple insurance plans for their health needs. Unlike the clunky, one-size-fits-all federal exchange, Aon Hewitt spokeswoman Maurissa Kanter says her firm administers health benefits to 9 million employees, conducts client sign-ups on a rolling timeline rather than opening to everyone on the same day.
Impressed, Walgreens this year signed up for the Hewitt exchange, along with more than a dozen other companies. Satisfied customers Sears and Darden have also renewed their contracts for 2014.
“We can offer better coverage options through the private exchange for our employees,” says Walgreens spokesman Michael Polzin. Wary of previous government-run health efforts like Medicaid, companies like Walgreens have resisted dumping their employees into the federal exchanges – even as they feel compelled to provide employees health coverage in a competitive labor market.
Obamacare has already broken its promise to allow employees to keep existing coverage. Walgreens employees, meanwhile, have been able to keep their coverage with Blue Cross and United Health, while getting more insurers and more plans. Without government-imposed mandates that make insurance premiums prohibitive for young people, the Aon Hewitt exchange offers high-deductible plans for healthy consumers at just $5 a month.
The president compared the Obamacare meltdown to Apple’s difficulties in rolling out its latest iPhone operating system. But the Apple comparison only magnifies Obamacare’s biggest flaw: It doubles down on employer-provided health care rather than liberating insurance markets by extending the health tax credit to individuals. Giving individuals the power to buy their own health care would decouple health insurance from employment and vastly expand their range of insurance options, just like they have in smartphones.
“Apple can’t allow its stockholders to face this sort of failure,” says Sandler. “It has doubled over to fix the problem to prevent losing customers.” Because Apple built it.
Henry Payne’s column runs every Tuesday online. Payne is a Detroit News editorial writer and editorial cartoonist. He also is editor of The Detroit News Politics forum. Email him at: email@example.com.