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How Rate Shock Caused Obamacare's Web Crash

October 14, 2013

By Avik Roy

The consensus among software experts is that there is a principal cause of all the web-crashing problems with Obamacare’s federal insurance exchange. That principal cause is that Obamacare requires that you create an account and enter a bunch of personal information before browsing the website’s plans and prices. That creates a huge traffic bottleneck. (On private-sector sites like, you can browse the plans without creating an account, and then register if you want to apply for coverage under a specific plan.)

But this wasn’t a random decision by the Obama administration. The White House specifically chose to set up its website this way, so that it could make prices on the Obamacare exchange less transparent, by displaying prices that incorporate the subsidies you might be eligible for if your income is low enough. People might otherwise be scared off by the steep cost of Obamacare-based insurance. As I note today at Forbes,

" was initially going to include an option to browse before registering," report Christopher Weaver and Louise Radnofsky in the Wall Street Journal. "But that tool was delayed, people familiar with the situation said." Why was it delayed? "An HHS spokeswoman said the agency wanted to ensure that users were aware of their eligibility for subsidies that could help pay for coverage, before they started seeing the prices of policies." (Emphasis added.)

As you know if you’ve been following this space, Obamacare’s bevy of mandates, regulations, taxes, and fees drives up the cost of the insurance plans that are offered under the law’s public exchanges. A Manhattan Institute analysis I helped conduct found that, on average, the cheapest plan offered in a given state, under Obamacare, will be 99 percent more expensive for men, and 62 percent more expensive for women, than the cheapest plan offered under the old system. And those disparities are even wider for healthy people…

But the laws’ supporters and enforcers don’t want you to know that, because it would violate the President’s incessantly repeated promise that nothing would change for the people that Obamacare doesn’t directly help. If you shop for Obamacare-based coverage without knowing if you qualify for subsidies, you might be discouraged by the law’s steep costs.

In other words, the president was willing to risk botching the launch of the exchanges because he wanted to avoid the risk of advertising the unaffordable cost of health coverage under the "Affordable Care Act."

Original Source:



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