Obamacare is a lot like Crystal Pepsi

Remember Crystal Pepsi? Think back to about 1993.

Crystal Pepsi was rolled out with much fanfare and and a huge advertising campaign. Sales were good. In fact, they were better than Pepsico had expected. Sales were very good.

And yet they discontinued the product. Why? It turned out that Crystal Pepsi buyers were consumers who were already Pepsi customers. Virtually all of the Crystal Pepsi marketshare was taken from Pepsico’s mainline cola product. Sales looked good but almost every sale of Crystal Pepsi resulted in a commensurate drop in sales of Pepsi Cola. This is called market cannibalization and it can make a failing product look good as it creates a very negative impact on sales performance of its existing related products. The joy of the Crystal Pepsi product team came with commensurate suffering among the Pepsi Cola team. The net effect was the cost of separate production and distribution lines and no real increase in revenue. Crystal Pepsi had to go.

How is that like Obamacare? Almost nine out of ten Obamacare enrollees already had insurance.

Most of the people who have signed up for Obamacare coverage already had insurance, raising questions about how the healthcare overhaul will reduce the number of uninsured Americans, a new survey reveals.

Just 11 percent of those buying through the healthcare exchanges were uninsured, a McKinsey & Co. study of 4,563 consumers discovered, reports The Wall Street Journal.

Meanwhile, nearly two thirds of the people jumping into Obamacare were switching from individual or employer-paid insurance plans.

Obamacare was aimed at providing insurance for 25 million of the 48 million Americans who were uninsured in 2012, partially by expanding state-run Medicaid programs.

So tonight, as Obama praises the number of people who have signed up for Obamacare, remember two terms: 1) Market Cannibalization and 2) Crystal Pepsi.

We can rest assured that, in the coming years, Obamacare will be as relevant and successful as is the clear, crisp Crystal Pepsi today.