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Kudlow: No delay, GOP

Friday, 25 Oct 2013 | 7:19 PM ET
Dra_schwartz | E+ | Getty Images

One huge political question surrounds the catastrophic launch of Obamacare: Will the administration double-talk, canceled insurance contracts for millions, terminated doctor-patient relationships, sticker shock from higher premiums and deductibility, and damage to job hiring and economic growth get the GOP off the shutdown hook for the 2014 midterm elections?

That is the question. Donald Rumsfeld would call it a known unknown. And right now nobody knows the answer.

But Christopher Ruddy, founder and CEO of Newsmax, makes an interesting point about this: "The key to stopping Obamacare is for its opponents to win in congressional elections in 2014. Delaying Obamacare only helps the Democrats who support this boondoggle."

So far, with all the problems plaguing the Obamacare website, Senator Marco Rubio is leading the Republican charge to delay the March 31 enrollment deadline and tax penalty. And a lot of Republicans are lining up behind him. But is that the right tactic? On the Democratic side, Senator Jeanne Shaheen of New Hampshire and nine of her colleagues are urging the White House to push back the same deadline. But is that just to save their re-election hides next November?

(Read more: HealthCare.gov is 'fixable' by end of November: White House)

Obama recently appointed a new team to fix the website. And that team promptly predicted a successful fix by the end of November. So if that happens, it's possible the whole Obamacare-disaster issue dies.

But according to highly respected health-industry expert Bob Laszewski, the chances of that are low. He says it will take at least a year to fix the "backend" problems — the technical links between the website, the Department of Health and Human Services, and most importantly the insurance companies, which are receiving massively error-laden information.

Laszewski says this is more important than the front-end disaster, where somebody in the Obama administration — literally at the last minute in mid-September — gave the order that the website require a detailed account-registration process before a user can shop for insurance.

Nobody knows why that decision was made. Perhaps it was to stop the media from seeing unsubsidized premium prices that undermine Obama's promise for cheaper insurance. Or maybe the Obama folks wanted to block potential registrants from pricing-structure sticker shock. Either way, the decision to put registration ahead of shopping blew up the whole system.

And it may also have blown up Obama's attempt to break the Republican party in half and carry a Democratic House in 2014.

(Watch: New fight shaping up in Washington)

And that's Ruddy's point: If Republicans hold the House and win the Senate next year, there'd be two houses to repeal Obamacare. But if the March 31 delay effort works, will voters forgive and forget a botched website launch?

Experts like Laszewski are now talking about the possibility of 16 million people getting pink slips for their current insurance. That's no insurance. No doctor. Nothing. Already, over 1 million people have lost their insurance, with cancellation notices actually soaring above Obamacare enrollment rates.

Of course, President Obama said none of this would happen. Remember? But everything has changed. And unless the system gets fixed by January 1, a lot of folks are going to be very angry as they're left out in the cold.

Holman Jenkins of The Wall Street Journal calls the whole Obamacare effort a con job. By that, he means a key Obama constituency, the young and healthy, are not going to buy overpriced insurance policies. They are the losers. And the winners are the older and sicker shoppers who allegedly are going to be subsidized by the young.

But the young are not stupid. They'd rather pay the minor tax penalty to stay out of this mess. And that means the system may go bankrupt because older and sicker customers will experience soaring premiums if the young and healthy don't show up to subsidize their care.

And guess who's going to do that subsidizing? We are. The taxpayers. And the whole cost structure of Obamacare will take another giant leap upwards -- above the Congressional Budget Office's already tripled cost estimates.

(Read more: Bad management plagues Obamacare: Ex-Obama advisor)

The net economic effects of Obamacare also will become more apparent as large companies with heavy numbers of low-wage workers cut back on hiring, reduce hours worked, take on part-timers whenever possible, and send their workers into the Obama exchanges. But those workers won't wind up in the exchanges. They'll end up in Medicaid, which is already going bankrupt.

And who's paying for that bailout? We are. The taxpayers.

The mainstream media have in large part turned against Obamacare, and all these factoids are going to be reported. So that raises the question regarding 2014: Do Republicans really want to bail out Obama by handing him a year's delay? If all the flaws in Obamacare do pan out, they may well overshadow the shutdown negatives suffered by the GOP.

I think I am lining up on Chris Ruddy's side. There's an old political adage: If your opponent is determined to hang himself, for Heaven's sake, don't take away the rope.

—By CNBC's Larry Kudlow; Follow him on Twitter @larry_kudlow

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  • Lawrence Kudlow is a CNBC senior contributor. Previously, Kudlow was anchor of CNBC's prime-time program "The Kudlow Report"