All-Savers Certificates and Obamacare

 

 

 

During the Ford Administration, the government was desperate to halt inflation. When Carter was president, interest rates reached 18%. One of the solutions was the “All Savers” Certificate. The idea was that if more people would save, the banks would have more capital to lend and since the supply of money for lending would increase interest rates would go down. The program didn’t work. Why? Because almost no one signed up.

Thirty years later we have the Affordable Care Act, otherwise known as “Obamacare.” Sign-up for the program was to start in November, 2013, but due to well-publicized technical issues, a mere 15,000 were able to sign up. Now that the technical problems are fixed, another 50,000 have signed up. And this in a country of over 350 million people. I heard one of the senators from Kentucky who helped draft the legislation explain that the senators “assumed” that every State would have an insurance exchange, sort of an online flea market where people could buy insurance. Unfortunately, just as with All-Savers, the assumption was wrong. Half of the States didn’t buy in. Now it comes out that the only way, the only way that the program can work is if droves of healthy young people sign up. The program is counting on them to pay for care for the older uninsureds. People believe that the only issue with the program is a mysterious web problem. It’s not. The whole program is based on false assumptions, not on a glitchy web page. Young people aren’t signing up. With three weeks left in the year, less than 100,000 people have signed up nationwide. More people bought All-Savers.

The sad thing is that the U.S. already has institutions which could address these issues. Expanding Medicaid is the obvious choice. “Oh but you can’t do that,” they say. Why not leave the design of the horse to a committee and hope we don’t get a camel?