Every week – nearly everyday – we hear about a new “glitch” in the implementation of the president’s health law.  Last week, we found out that states are behind schedule establishing “exchanges,” the regulatory bodies that will oversee the sale of insurance to people not covered by employer-sponsored plans.

But Americans should keep in mind that ObamaCare is not a good law that is being executed poorly. The real problem with implementation is that ObamaCare is a fundamentally flawed law.  Moreover, the law’s creators were aware of its design flaws, but passed it anyway, hoping to fix things as they went along.

Indeed the law already has had some massive make-overs of its most egregious flaws: A paperwork-tsunami provision that would have forced businesses to file 1099 forms for other businesses (not just individuals) has been repealed. ObamaCare’s long-term care insurance program was also scrapped when bureaucrats had to admit it was financially unsound.  And it took a Supreme Court case to remind Washington that states could not be forced to expand their Medicaid programs.

But many problems remain.  One important design flaw was the creation of a new federal subsidy that was authorized only in states that establish their own exchanges.  This puts in jeopardy the law’s functionality – from the subsidies to the taxes and mandates they trigger – in 34 states that have refused to create their own exchanges.

The restriction of subsidies to exchange-establishing states was intentional, not a “glitch.”  This was one way the federal government expected to coax all states into creating exchanges.  It just didn’t work, as many state lawmakers recognized that running an exchange was a raw deal: a costly endeavor without meaningful control.

While the IRS has attempted to correct this through a regulatory “interpretation,” it’s not clear that the agency has the authority to deliver these subsidies in 34 states.

When money for the law’s Pre-existing Condition Insurance Plan ran out earlier this year, this was played off as another unanticipated implementation hiccup.  Enrollment was cut off, denying some40,000 applicants still waiting for coverage.   Yet lawmakers knew funding for this program was insufficient when passing the law.  Even the CBO warned that $5 billion in funding was far too low.  

Similarly, HHS Secretary Kathleen Sebelius – who this summer has been approaching outside organizations asking for money to implement the law – admitted during a Capitol Hill hearing that she and others knew from the outset that the law was not passed with enough funding. 

Could it be that lawmakers avoided properly funding the law in order to get a more favorable CBO score, so they could misrepresent the law as “deficit-neutral?” This was no glitch; this was a part of the smoke and mirrors.

Finally, anyone with an understanding of economics could see that the law’s employer and individual mandates would not work as advertised.  

Employers seeking to avoid the penalties associated with the employer mandate are slashing employees’ hours to keep them from full-time status (which requires coverage or triggers the penalty).  This was predictable. 

ObamaCare advocates originally promised widespread decreases in premiums – $2500 on average – but now they are walking back on this promise and explaining that higher premiums are simply the price we all must pay to get more coverage (as mandated by the law).  This isn’t a “glitch” either.

For some Americans, the law may actually incentivize them to become uninsured. Yes, there is a penalty for that, but the penalty is so low ­– especially when compared to the price of insurance – that many people could be better off waiting until sickness or catastrophe strikes to buy insurance.  After all, the law’s “guaranteed issue” provision means we can buy insurance from a hospital bed, because insurers will no longer be able to take health status into account.

As healthy individuals exit insurance pools, premiums will go higher for those who remain.  That’s something creators of the “Affordable” Care Act should have known.

There are many more examples of programs and provisions in the law that will no doubt be called “glitches” when they turn out badly.  But each time we hear a headline about how “far fewer than expected” benefit from ObamaCare, or how the costs are “much higher than anticipated,” let’s remember that it’s not the law’s implementation that is the problem.  It was a messy, dishonest legislative process that produced a terrible, fundamentally flawed law.


Hadley Heath is a senior policy anaylst at the Independent Women's Forum.