The Man Who Called It Right
Jim Capretta: America’s indispensable man on healthcare policy
BY: Andrew Evans
November 9, 2013 12:00 pm
Jim Capretta saw the Obamacare debacle coming when it was months away.
On July 5, the Obama administration released a 600 page regulation announcing a one-year delay in part of Obamacare’s implementation. States would not have to check the income of people applying for subsidies, according to the administration’s guidance. The administration simply would not be ready in time.
“This announcement is another indicator—as if we needed one—of the complete fiasco that is Obamacare implementation,” Capretta wrote the following Monday for the Weekly Standard.
It wasn’t the first delay, as a few days earlier the administration had let all big businesses off the hook for providing adequate health insurance to their employees. But Capretta saw in this latest delay a portent of the rollout disaster that America has witnessed since Oct. 1.
Capretta again called for a delay in the law, as he had been doing for months.
“Everyone should now understand that, if there is not a delay, next year will be the scene of an epic disaster for American health care,” Capretta, along with National Affairs editor Yuval Levin, wrote in April.
“Jim is the indispensable man on healthcare, just from top to bottom,” Levin said in an interview. “Because he has the deep understanding that he does of what’s wrong with the law, he’s seen things first and seen things clearest.”
Capretta’s expertise on healthcare has made him a regular fixture on Fox News, in publications such as the Weekly Standard, and before Congress over the past months.
“Every member [of Congress] who wants to be smart about healthcare talks to him, and so it’s not a coincidence that the Republican critique sounds like him and that the Republican alternatives look like his, because they really are,” Levin said.
“Some people have lots of experience in and around government. Others have a thorough knowledge of health care policy. Jim has both. And he’s smart and savvy. My rule: Always listen to Jim!” said William Kristol, the editor-in-chief of the Weekly Standard.
Capretta began his career by analyzing federal agency budgets for the Office of Management and Budget (OMB), the president’s arm that oversees the implementation of federal laws. He continued to work in government for the next 16 years, ultimately concluding his career back at OMB as an associate director under President George W. Bush.
Capretta credits his time at OMB with giving him a sense of the possibilities and limits of government policy—and showing him where Obamacare was going wrong.
“I had a sense from that [time at OMB] about what’s really possible and the limitations of that kind of process to handle some kind of major complex undertaking,” he said.
“And so it was from those experiences that I realized that what they were proposing to do and the challenges that they were taking on in this law were beyond anything that had been done in a long, long time, and it was going to be very difficult to pull off easily,” Capretta said.
While the government has other complex programs, such as the Earned Income Tax Credit and food stamps, they developed gradually over many years. With Obamacare, in contrast, the administration was trying to implement in three years a national system coordinating states, federal agencies, and private insurers, and all run online.
“Just on its face it looked like a monumental challenge to do this well,” Capretta said.
The complexity soon swamped the administration, and private insurers started to worry about whether the law would be implemented smoothly.
“Just like everybody else, I had heard from people in the industry, anecdotal for sure, but I had heard enough that they were very, very concerned, the things were way behind schedule, and that the administration … was giving no one confidence that this thing would go smoothly at launch,” Capretta said.
“Even me on the outside, I had no real inside information about anything, [but] I could tell it wasn’t going to go well, just from reading the law and reading the tea leaves of what was coming out,” Capretta said.
Capretta does not see the website as the biggest issue with the law, though.
“The president’s right and his team is right about this: this [website] isn’t the fundamental issue at stake here,” Capretta said.
“Essentially trying to force a lot of people into products that they don’t want, that still remains the most fundamental problem. And I don’t think that they’re going to be able to solve that—ever,” Capretta said.
Obamacare requires every individual to carry health insurance or else pay a penalty, the so-called “individual mandate.” The law further requires all health insurance plans to have certain minimum benefits, and as a result many insurance companies have recently notified their customers that their former plans are no longer available because of Obamacare’s minimum requirements. These customers now have to buy more comprehensive—and often more expensive—plans as a result.
“I think the country needs a more flexible, consumer driven, decentralized approach to this, not trying to centralize all decision-making in HHS,” Capretta said.
Under Capretta’s proposal, the government gives each person a fixed amount of money to help them buy insurance, leaving people free to buy the insurance they want. Various Republican reform proposals, including the one from Paul Ryan several years ago, have adopted this approach.
However, Capretta’s plan is not America’s current plan, and the next few years will determine the fate of Obamacare.
The administration will say the website is up and running by their self-imposed deadline at the end of November, even if it is working poorly, Capretta predicted. They will limp through the first year and then likely revamp the website for year two.
This botched but functioning rollout will leave Obamacare vulnerable politically, Capretta predicted. The midterm congressional campaigns will be at full speed right as enrollment opens again for the second year.
“There will be a PR battle and a political battle around trying to define whether the law was a success or failure in year one, that will culminate in the mid-term election,” Capretta said. “And so I think a lot does depend on the mid-terms, where it will become a bit of a referendum on the law. To the extent that there’s a rebuke and people say this is not really what we wanted and what we thought was coming, that could have a political effect on the further development on the law into 2016 and beyond.”
The congressional elections will certainly impact the law, but the presidential election will make the biggest impact on the law’s future, Capretta said.
“If this thing survives to 2016, and a Democrat gets elected president in 2016, then it will start to become more cemented and settled,” Capretta predicted.
But he also thought that Obamacare would not be a winning issue for Democrats in either 2014 or 2016.
“The payers”—those people losing their insurance plans, paying more because of the higher taxes and Medicare reductions, filling out more paperwork for their small businesses—“exceed the people that are benefitting from this by a substantial margin.”
His predictions have been right before.