"Your current health insurance is being canceled and you consider other available policies unaffordable."
Is this a right-wing talking point, designed to gin up opposition to the health care reform widely known as Obamacare in an effort to see it fail? On the contrary, this quote comes from a recent document (PDF) issued by Kathleen Sebelius, the Secretary of the U.S. Department of Health and Human Services. She's also responsible for the "rollout" of Obamacare, which has joined New Coke, the Edsel and Showgirls on the list of worst new product launches in American history. As bad as those fiascos were, at least they had the decency to disappear quickly after the public rejected the merchandise. Obamacare will be a constant, unwelcome presence in 2014 that permeates nearly every economic and political development during the year.
It's also likely to get worse rather than better. The administration just eliminated "the individual mandate" to purchase insurance if your policy was canceled, but not if you were previously uninsured. This move came in response to a request from six Democratic senators, a sure sign that Democrats are starting to panic.
This is a serious change, however, and it could lead the entire plan to unravel. No one will be happy with a law that imposes the individual mandate on one set of workers (the uninsured) while exempting another (people who lost their insurance). The easiest solution to this problem is exempting everyone from this mandate, but that would also doom the program. Obamacare is not fiscally sustainable unless some people are forced to buy insurance policies beyond their needs, since the excess revenues from these purchases are used to fund the law's other mandates and subsidies.
Democrats are discovering that they're stuck between the sharp rock of Obamacare economics and the hard place of political reality. Canceled policies and higher premiums -- for some customers -- were always at the core of the "reform," but the president didn't sell the plan that way to his party or the country (and of course Republicans rejected the sale entirely). Democrats are now scrambling to find a way to square the circle through desperate, Hail Mary policy fixes that will make a chaotic situation even worse and lead to more unintended consequences. The public's already strong opposition to Obamacare will build as the rollout rolls on.
This will naturally affect the 2014 elections in Wisconsin, including the big enchilada, Scott Walker's bid to be reelected (again!) as governor. The state's Democratic Party chair has decreed that Mary Burke shall be the party's candidate to take on the governor. Burke is a cautious, largely untested figure who spent over $100,000 of her money to win a Madison school board seat. She will run from the Obamacare issue, but she won't be able to hide. Ads will be run; billboards will be posted; questions will be asked that she will dodge uncomfortably on camera, providing fodder for more ads and billboards.
This will anger much of the Democratic base, which supports Obamacare and doesn't like the establishment's field-clearing power play. The party base wants a contested primary, and it's likely to get it since state Sen. Kathleen Vinehout appears ready to throw her solidly progressive hat in the ring. If/when this happens, it will ignite a primary battle between the party's head and its heart that Burke will (probably) win in the end, but not before she burns through the personal funds she has likely planned to devote to the campaign. Burke doesn't have the resources that, say, Herb Kohl or even Ron Johnson have, so she will find it difficult to spend without limits in the general election. Meanwhile, the party's funds will be stretched wafer thin as Democrats defend once-safe seats across the country that are now in play because of anger over Obamacare. In this tough political environment, how much out-of-state money will flow to a political novice running against an incumbent governor who's handily beaten seasoned political pros in two statewide votes in the last four years?
Almost none. Which means Scott Walker will have the airwaves largely to himself between September and November 2014 to tell the public about the mess he inherited and his record as governor, which continues to improve.
On November 5, 2014, Wisconsin progressives will wake to find that not only has Scott Walker been elected statewide for a third time, but the GOP has taken back the U.S. Senate and increased its House majority. Republicans will also be calling Obamacare the worst domestic policy reform since Prohibition (also warmly embraced by progressives, let's not forget), and the battle to deliver the knockout blow to this wobbly but still-standing program will enter its next phase.
This news will undoubtedly make many isthmus residents sad, and some might need a hug. Too bad Madison's Snuggle House didn't make it through 2013.
Happy New Year.
Larry Kaufmann is an economic consultant based in Madison.
