Obamacare Fiasco Isn't a Single-Payer Conspiracy

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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I'm spending my morning listening to various contractors testify before Congress. Back in the day, when I worked for a tech consultancy, the technical term for what is going on in this hearing was "Not it!"

Every consultant has sat in a meeting like this, where you painfully try to duck responsibility for unknown bugs and/or the client's bad decisions while not enraging the client by pointing out the various ways that various powerful people in the institution messed up the implementation. Having been in that position several times myself, it's hard not to feel empathy for the folks getting grilled. Hope you got those change orders in writing, guys.

The contractors who are in charge of the new federal health-insurance website, HealthCare.gov, are trying to sound hopeful about the program working fine by Dec. 15. But their enthusiasm seems a bit strained, and given that they have little incentive to say otherwise, I doubt they'll convince anyone. The fear that the system might not be ready by Dec. 15 has naturally triggered speculation on both sides of the aisle about what might happen if the system really and truly fails.

The interesting thing is that people on both ends of the political spectrum seem to believe that the answer is the same: single payer. What Walter Russell Mead dubbed the "pivot" to single payer has begun as various folks point out that if we only had a total government takeover, these issues wouldn't put the whole system in danger. I've seen more than a few progressive commenters suggest that maybe an epic fail will finally open the way to the single-payer system we should have had in the first place.

In private, and occasionally in public, conservatives are expressing the same fear. There's a pretty popular conspiracy theory running around to the effect that this was the Barack Obama administration's intent all along: Design this big Rube Goldberg apparatus that couldn't possibly work, and when it fails, sweep in and "fix" things by enacting the single-payer scheme you wanted all along.

QuickTake Understanding Health Insurance Exchanges

Perhaps they did want single payer all along, in their secret heart of hearts, but it's ludicrous to think that they were capable of designing and pulling off a conspiracy of that magnitude. Moreover, even if they had, their conspiracy is going to meet the same end as all other evil conspiracies do in the movies. Even if the Patient Protection and Affordable Care Act fails spectacularly, single payer is not going to happen in America anytime soon.

Here's why: Most Americans have insurance, and most Americans like that insurance. That's why the administration designed such a complicated, kludgy system; they had to at least be able to claim that all the people who had insurance they liked would be able to keep it. Obviously, this wasn't quite true -- folks who buy in the individual market often experience big price hikes, and some folks with employer-provided insurance are eventually going to see it altered or dropped. But it leaves the employer-sponsored health-care system relatively intact, compared to just taking over the insurance market.

Oh, there were other reasons, too: Trying to get rid of the insurance market would have obviously triggered a giant war with the insurers and other providers. But that is not what made single-payer fundamentally impossible, so clearly unworkable that the administration didn't even seriously consider it. What made single payer impossible is the fact that tens of millions of voters have employer-sponsored insurance that they basically like, and they would freak out if you told them it was being replaced by a government-run national health-care program. Progressives could spend all the time they wanted talking about how awesome things are in Canada, but it wouldn't have altered the fundamental political calculus. People are loss-averse; they worry more about losing what they have than they do about some unproven potential gain.

If Obamacare's insurance reforms break the market, that calculus still won't change: Most people will still have insurance they like, and they will not be willing to give it up in order to solve problems in the individual market -- which now covers about 5 percent of the population and is expected to ultimately cover something over that. Even if the individual market functionally disappears, most people will still be covered, and most politicians will be unwilling to endorse a program that takes away what they have. There is no path to single payer from even a spectacular Obamacare implosion -- for the same reason that there was no path to single payer before Obamacare was passed.

Ironically, single payer seems much more plausible if the system succeeds. One possible path along which the health-care law could develop is that more and more employers dump folks onto the exchanges, breaking the link between employment and insurance for millions of Americans. If that happens but other problems remain -- such as rising premiums -- then you can imagine a series of reforms that ultimately leads to single payer, probably starting with a public option. Employers would probably still provide supplemental health insurance as a benefit, the way some do in the U.K., but it would be a relatively cheap add-on, not a huge portion of your compensation package.

So dash your hopes and allay your fears. An Obamacare failure would be bad in many ways, and it would mean significant changes for the insurance market. But we're not getting the National Health Service anytime soon.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net