3 Lessons from Obamacare's Failed Rollout

Obamacare's promoters claim that their salvation lies in millions of relatively well-off young people signing up for coverage. That simply isn't so. There aren't that many of them, especially after subtracting out the millions under age 27 who have glommed onto their parents' policies. Of the rest, only a precious few with sufficient earnings aren't already participating in an employer plan.

The big money was always going to come from exorbitant premiums extracted from high earners who are 50 and older who had been in the individual market until Sebelius regulated most of those plans out of existence. Given proponents' "keep your plan" guarantee, they should, logistics permitting, be able to get their old individual policies back. But that will make offsetting the tax subsidies given to everyone else a pipedream.

The fundamental flaw in Obamacare's entire design is that how much you pay for a good or service should be based on the interaction between supply and demand, and have nothing to do with buyers' incomes. Departing from reliance on supply and demand inevitably distorts markets. Virtually every government attempt to "fix" distortions which follow only digs a deeper hole.

3. Massive, top-down changes will have unforeseen, predominantly negative consequences.

The Affordable Care Act's proponents apparently thought that designing a takeover of one-sixth of the economy would be a breeze. Maybe that's so in Ivy League faculty lounge bull sessions, but not in the real world.

Obamacare has powerful disincentives to work. Its subsidies drop as income increases, and disappear at the four times poverty threshold. When combined with the federal income tax, the payroll tax, and state and local income-based levies, those who make as little as $30,000 per year stand to lose as much as one-third to one-half of each additional dollar they earn. The "working families" the left claims to love so dearly won't feel much like working. Those whose earnings are near the four times poverty threshold will cut back on how much they work to avoid getting above it. If they fail, their subsidy losses will dwarf any extra earnings.

Obamacare also encourages divorce and discourages marriage. Cohabiting couples almost invariably pay less, often far less, in net Obamacare premiums than identically situated married couples.

Obamacare's architects either didn't see any of these problems coming, or didn't think they would matter. Obviously, they do.

This administration's particularly repulsive brand of hubris has come back to haunt it. Its members and its party apparatus seem incapable of learning from their mistakes. Opponents, whose numbers are growing as formerly low-information voters and even liberals get mugged by reality, are going to have to legislatively take away their keys to the healthcare system.

Related: Tom Brokaw Mystified by Obamacare’s Chaotic Rollout