Don’t know how, besides sheer arrogance, they missed that “perception” aspect.
I guess they’re relying on the media to help them blame the private insurance companies for the failure.
That’s what fascists do, and it’s why they prefer fascism to communism. They control, but any negatives can be blamed on the “owners”.
I believe you have correctly diagnosed it: sheer arrogance. Every single person in the Administration drips with it.