Obamacare Is Running Out of Bullets

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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There are two key signs that the administration ofPresident Barack Obama is having trouble coping with the events of the last month.

The first is what it hasn't done: attacked insurance companies. For the past four years, insurers have been a punching bag of the administration and the Democratic Party. Whenever insurers did something the administration didn't like as a result of the new health-care law, Democrats punched back, hard, with complaints about greedy insurers who were blaming the White House for their own failures.

Not this time. Left-leaning columnists and policy wonks have been suggesting that the cancellation letters were part of an insurance company scam to enroll their customers in expensive policies, but the administration itself has been remarkably oblique. It needs the insurers, especially with the exchanges in so much trouble. Their cooperation is essential to avoiding another round of nasty premium shocks next year.

It reminds me of a late-Soviet joke: A man stands in line all day for bread, only to have the baker come out and say there is none. He loses it, and begins ranting about the government. Eventually, a man in a trench coat puts a hand on his shoulder.

"Be careful, comrade. You know, in the old days, it would have been ..." and he mimes a gun pointed at the head.

The man walks home, dejected. When he walks in the door, his wife takes one look at his face and drops the plate she is holding.

"What's wrong, Ivan? Were they out of bread?"

"It's worse than that. They're out of bullets."

The administration has run out of political bullets. Unless the Affordable Care Act starts working, and delivering big benefits to more people than are losing their insurance, it can't do much to improve those sagging poll numbers.

The second sign is that the president actually said he was sorry that some people had gotten the misimpression from him that they could keep their health insurance, when they were actually going to lose their policy and be forced to buy a more expensive one. Conservatives may complain that the apology was inadequate, since the president did not admit that he'd misled people. But this is the first time I can remember this president apologizing like this. It may be sincere. It is also a sign that his administration is backed into a corner. It can't deny that this is happening, nor can it blame anyone else. What's left to it are expressions of regret.

Politico reports that the president has also ordered aides to explore administrative fixes for people who are going to be made financially worse off by their cancelled policies. This would probably involve grandfathering all the existing plans. That will create chaos, and may leave the exchanges with a poorer and sicker pool of the folks who couldn't buy insurance before. It would also mean conceding that the administration made a grave mistake when it drew the regulations for grandfathered plans so narrowly.

But until the exchanges start working, this is all the Obama administration has in the political arsenal. It may not be enough. But from the administration's point of view, it's probably better than nothing.

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