Caroline Baum: Banging the bongs for Obamacare
INSTEAD of outreach programs and sappy TV ads with parents imploring their kids to sign up for Obamacare, President Barack Obama needs to start thinking creatively if he wants his signature legislative achievement to be a success. What motivates kids? In fact, what motivates any of us?
Incentives. This White House has failed to grasp what makes individuals and businesses tick. Whether it's taxes or regulations, Obama doesn't understand the basis of a capitalist economy. Whoever was responsible for setting the Accountable Care Act penalty - a tax, according to the Supreme Court - wasn't thinking because it's much too low: $95 a person, or 1 percent of taxable income, whichever is greater, beginning next year. The penalty rises sharply after that. But if the point is to create an onrush of enrollees at the start, the penalty rate is cheaper for many young, healthy individuals than the premium cost of a health-care policy.
The share of 18 to 34 year olds signing up on nine of the state exchanges ranges from about 10 percent in Minnesota to 37 percent in Massachusetts, with most clustered around 20 percent, according to the New York Times. Obamacare can't work with those kinds of results. So what can the president do to drum up interest among the young and the healthy before it's too late? Here are a few ideas off the top of my head.
First, announce and advertise that everyone between the ages of 18 and 34 who enrolls on the health-care exchanges by the end of the year is automatically entered in a lottery. Winners will receive everything from a free iPhone or iPad to a full-year of health-care underwritten by Uncle Sam. Refer a friend and get a discount. Buy one (year), get one free. In states that have legalized marijuana for recreational use - Colorado and Washington - by all means, throw in a bag of cannabis.
It isn't fair, you say? Who said life is fair? Obamacare is based on the idea of young, healthy people, who don't use a lot of health-care services, subsidizing the sick and elderly. Their generation is on the hook for the debt incurred to provide for the baby boomers in retirement. So forget fair.
Second, get lenders into the act. Financial institutions could do for health-care what they did for real estate: lure potential borrowers with teaser rates that reset higher over the next few years. (Yes, the terms would be in the small print, but who reads that stuff?) Create collateralized debt obligations from health-care loans, slap a AAA-rating on them and drive the next bubble. Isn't that what some smart economists are talking about right now: the need for another asset bubble to give the U.S. economy some added oomph?
Third, change the psychology so that it's cool to have health care. Create a rap video with a half-naked heart throb gyrating to music as he sings, "Bye-bye ER, I'm gonna miss you." Or the White House could ask its friends in Hollywood to develop a reality TV show.
I was out with friends recently and happened to mention something about Medicare. They all flashed their Medicare cards, which they'd had laminated, simultaneously. I would have thought Medicare eligibility would be something to hide, not advertise, as a sign of old age. Yet my friends were quick to share this symbol of the government safety net.
If Obama and his brain trust spent as much time on creative ideas to boost enrollment as they do on creative ways to spin the truth about it, they might be surprised at the results.
Baum is a Bloomberg View columnist. Her email address is email@example.com.