The Audacity of Change


Like most guys’ spouses, my wife has a number of things she would like me to change. I know this because she keeps a mental list of them, and on occasion likes to pull out the list. Over a period of time I have checked in with my buddies on this topic, and have come to accept these little feminine quirks as part of life. Besides, most of the changes she wants have to do with the speed (or lack thereof) of my responding to her questions on technology, such as: Why is my email not working? I know that I should look at these little things as an opportunity to help, to grow, or to simply demonstrate a superior level of knowledge. But, as a self-centered male, it is hard to change.

In 2008, then-Senator Barack Obama was elected President of The United States on a bold platform of change. Yes it was wrapped in the shroud of hope, but there was little doubt that young Barack was committed to the pursuit of his vision. It was that resolute spirit that attracted young voters and ultimately landed him in a rent-free bungalow on Pennsylvania Ave.

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Pain Is The Touchstone of Growth?

On its own, vision doesn’t count for much, though it is a necessary starting point. Such is the case for the Patient Protection and Affordable Care Act that we have come to love so much that we call it Obamacare. If I were a late-night comedian, Obamacare would offer a bountiful harvest of jokes about the well-documented history of government ineptness. Unfortunately, I majored in finance. Well, we all have regrets.

208116_5_In defense of the President, former Treasury Secretary Lawrence Summers points out that the mere passage of Obamacare has cured the big problem: spiraling healthcare costs. True, the recent numbers suggest that cost inflation is moderating; but it will take the Congressional Budget Office to opine before Obamacare earns full credit for this miracle. In the meantime, we face lots of pain before any real gain.

Over the course of the past five years, the world has witnessed the functional breakdown of the U.S. government’s legislative branch. (Some would place this period of dysfunction closer to 20 years, but that’s just being political). Public opinion pollsters are desperately searching for new adjectives to describe the public’s absolute disgust with Congress. The inability of the Administration to work with Congress has rubbed off on the President, with his approval ratings at an all-time low.

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One hears a constant babble from his opponents–that it is the President’s own inflexibility, his own insistence on having his way–which is the root of the problem. As a country, we have a government at many levels that doesn’t work, period. If history is a lesson, change is necessary for survival. But just like we acknowledged earlier, change is hard to accept.

The signature theme to the Obama administration is now guaranteed to be the Affordable Healthcare Act passed in March 2010. The number of people who have read all 2,700 pages of the legislation are, no doubt, fewer than the paltry number of people who signed up for the program since its October 1 start date.

In the beginning, the political right scoffed at Obamacare with disdain, but without much substance. Those members of the Tea Party who could read, didn’t read any more of those 2,700 pages than anyone else. But now with the program over a month old, we are beginning to understand how difficult it is to change.

The Pain

The flaws that have already shown up have been so well-documented and debated that a simple listing should suffice:

1. After more than three years in development, the software doesn’t work.
2. The few people who have managed to sign up are older Medicare and Medicaid patients.
3. Younger (healthy dudes) are not signing up.
4. Younger people are being threatened with the loss of existing healthcare coverage. (Barack promised we could keep our health care!)
5. Certain hospitals that serve poor areas are losing subsidies and forced to reduce service.
6. The sheer complexity of the change lends itself to large-scale fraud.
7. As many state insurance exchanges are functioning poorly as are functioning properly, demonstrating the Federal Government has no monopoly on ineptitude.

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The fact that the software is not functioning properly is unconscionable. How can people be expected to have faith in their government when they are presented with non-functioning technology? If Apple can create Siri and correct the flaws in Apple Maps, why can’t the government get it right the first time, or simply postpone the release date? The Administration had three years to get the website up and freezing. If it takes as long (and we suspect it will) to get it functioning smoothly, the political implications for the Democrats represent a disaster in the making.

There is little reason for optimism. Notes from the White House meetings in early October showed this: IT folks were working to fix individual bugs, in spite of the fact that the overall system was simply not functioning. No one is making any predictions any longer as to when the website will be functioning.

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So When Is There Going To Be Growth?

The President was quoted as saying, “No one is more angry than I am.” The solution to the mess has been handed to a very successful gentleman steep in entrepreneurial success and economic knowledge. Trouble is, Jeffrey Zients hasn’t any IT credits on his CV. However, at the introductory presentation, we noted that both men wore the same color ties (IBM blue). If not on the right page, at least they are on the same team.

Spiders Eat Their Young

A Ponzi scheme is where you collect money from new investors to pay interest or dividends to existing investors. Health insurance works in a somewhat similar fashion. In the case of the Affordable Care Act, money is collected from young people who are super healthy in order to pay for the moldy old coots who have been chomping on Big Macs and slurping 64 oz. sodas for the last 40 years, and now have Type 2 diabetes.

Charles Ponzi designed a scheme.

Some young people actually need healthcare coverage. President Obama promised that anyone who already had healthcare coverage they liked could continue with their existing plans. We now know that was politically smart, but an unforgivable lie. Many of those health plans that appeal to the young and healthy won’t pay enough to help the old and infirmed. Therefore, those plans are being legislated out of existence. Anecdotal evidence suggests this: Many young people facing loss of present coverage also face an increase in premiums of 50%-100%, with large deductibles as well.

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Ponzi schemes work best when the victim is na√Øve, but young folks these days don’t fit that profile. Using an example from, let’s assume minimal coverage for a person 25-30 years of age could amount to roundly $5,000 per year. This would include a deductible of more than $1,000. In the event a young and healthy person does not sign up by March 31, there is a fee charged. The fee starts at 1% of income for 2014 to as much as 2.5% by 2016.

So if you are a young and healthy person earning $50,000 a year, here are your choices: Spend $5,000 a year on healthcare coverage where the first $1,000 is out of your pocket; or give the government $500 in 2014, $1,000 in 2015 and $1,500 in 2016. If you have any common sense you will realize that your odds are better paying the fine than helping subsidize somebody’s 95-year-old grandmother.

The premise of health care is rational. The strange part of the proposition is that the very people that Barack Obama depended on for his Presidential run are the same people he appears to have quietly screwed. Politically speaking, that’s not cool.

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There is no shortage of opinion on Obamacare. Right now there is more opinion that fact. Based on its 2,700 pages, this has never been truer: Much more is to be revealed. Unfortunately, if the first salvo is any indication, how can any rational person expect anything good to be forthcoming?

Health care is more than Obama’s legacy; it is the future of the Democratic Party. Just as the tragedy of 9/11 set in motion a series of events that spun out of control with the Bush administration, screwing up health care is likely to have a similar adverse impact.

If Obamacare were the Powerball lottery, one suspects the line to sign up would be blocks long, but it’s not. We are dealing with something that is not sexy and only rewarding in a negative way. (Congratulations, you only have to pay the $1,000 deductable for your new heart.) We are told that people are taking this seriously, reading and reading as many a 8-10 times before trying to make an informed decision. Who ever wrote these things must have sold long-distance telephone service in the 1990s.

There is nothing objectionable about having universal health coverage. Other countries have it and it works fine. Ecuador is a shinning example. Yet there are few areas of our economy with more entrenched interests and more barriers to change than health care. Just ask Hillary Clinton, the last to advocate sweeping healthcare changes. The odds are long, yet the audacity of hope continues. Good luck, Mr. President.