The Zombie Health Care Law. Republicans tried to kill Obamacare but some say the law is stronger than ever.
By Susan Milligan, Senior Writer | Jan. 5, 2018, at 6:00 a.m.
Congressional Republicans tried in vain to repeal it. President Donald Trump said he would simply let it die of its own flaws. Americans complained about it. But nearly eight years after President Barack Obama’s signature health care law was approved, the Affordable Care Act appears here to stay – and perhaps even flourish, experts say.
Having failed to outright undo the law, as they had promised constituents since the controversial measure was passed, Republicans used the December tax bill to defang the individual mandate, removing the financial penalties for people who do not carry health insurance. But even that move, which ACA backers feared would unravel the package, has not done so. In the most recent enrollment period ending in December, nearly 9 million people signed up for 2018 Obamacare – close to the previous year’s numbers and well beyond expectations.
“It’s like driving a 2010 Mazda. It takes some bumps and scrapes and dents along the way, and the end of the [individual] mandate was a pretty substantial fender-bender,” says John McDonough, former head of Massachusetts’ Health Care for All and one of the crafters, as a senior Senate staffer, of the ACA. “The car’s still running right now. It’s quite possible the car’s going to keep running until another Democratic administration is in charge. And it’s going to have a much more durable life than any of the Republicans, or even a lot of Democrats, believed 12 months ago,” adds McDonough, who teaches at Harvard’s T.H. Chan School of Public Health.
Further, changes in the law aimed at weakening it have, paradoxically, shifted Obamacare to exactly what Republicans had most feared in the development of a national healthcare program, says MIT economics professor and leading healthcare expert Jonathan Gruber: an essentially public program to subsidize low-income people. Obamacare was designed as a public-private hybrid, using taxpayer dollars to coordinate and subsidize health insurance purchased from private companies.
But the changes Republicans thought would weaken or even kill Obamacare have merely shifted it, adds Gruber, who also serves as director of the Health Care Program at the National Bureau of Economic Research. “It’s turned into a program that is much more expensive and covers fewer people, but is essentially a public program,” he says.
The law has surely taken its hits. The election of both Trump and GOP majorities in both chambers of Congress had ACA haters confident that the law would, at long last, be repealed.
But several Republican lawmakers were concerned that undoing the law would imperil funds for the opioid addiction as well as put stress on state budgets. The effort failed in the fall.
Trump then sought to weaken the elements that made the law viable. He announced in October that the administration would discontinue “Cost Sharing Reduction” payments – basically government subsidies to defray out-of-pocket costs for low-income Americans who buy insurance on the ACA markets. Finally, the administration failed to promote – or as critics charged, actively undermined – the ACA during the seasonal sign-ups in late fall.
The administration made deep cuts to advertising and promotion of the law, including cutting by almost half the funding for “navigators,” people who help patients understand the different ACA heath insurance options and choose a plan. It shut down the healthare.gov website for 12 hours on Sundays, a day when many working people would be perusing the site for plans. All of that is a backdoor way of discouraging people from signing up, helping the law collapse from non-participation, experts say.
But instead, 8.8 million people signed up as of late December, down from 9.2 million in the last year of the Obama administration. Even the cuts in CSRs haven’t felled the program, showing, as McDonough notes, that “what doesn’t kill you makes you stronger.”
On paper, the cuts in Cost Sharing Reduction payments should weaken the plan, if only by driving up premiums and galvanizing public anger to mobilize another repeal effort. About 57 percent of people who buy insurance through the Obamacare markets qualify for premium subsidies funded by the CSRs, according to the Kaiser Family Foundation, a non-partisan health research group. The payments cost about $7 billion in 2017.
In fact, the cuts in CSRs (which a coalition of states is challenging in court) have not only failed to destroy the program in the states, but has made the plan more appealing to low-income people, healthcare analysts say. Faced with the CSR cuts, insurance companies shifted the financial burden to holders of “silver” plan, the middle-of-the-market plans, in terms of cost and benefits.
Premiums for the lower-cost, higher deductive bronze plans will go up by an average of 17 percent between 2017 and 2018, according to Kaiser, while the lowest-cost silver plan is increasing an average of 32 percent. The lowest-cost gold plan is increasing an average of 18 percent, the group reports.
The silver plans, however, are the ones the U.S. government uses as a benchmark to determine the amount of subsidies to low-income people who buy any Obamacare market plan. So for many patients, the cost of a bronze plan (after the subsidy is applied) will actually be less this year than it was last year, economists explain.
That also means that the removal of the financial penalty for failing to obtain heath insurance might not have the dramatic impact both advocates and opponents of the ACA expected, analysts say. The mandate, while politically unpopular, was seen as critical to cost-controls if insurance companies were going to be forced to adhere to more popular parts of the law.
For example, Americans overwhelmingly approve of the part of the law that says insurance companies can’t discriminate or deny coverage based on “pre-existing conditions.” But unless virtually everyone buys insurance, the companies would have a customer base of sick, costly patients, including those who went out and got insured right after a diagnosis of a serious illness.
Before the tax bill passed, Americans had to pay a financial penalty on their tax returns if they failed to get insurance (though the Obama administration allowed for a hardship exemption). Without the penalty, the worry (or hope) was that people would opt out, making the law collapse.
But Americans are also motivated – perhaps more so – by affordability and availability of health plans, expert say. For some low-income patients, a bronze plan will be free, with federal premium subsidies, meaning there is no reason to stay uninsured.
“The mandate itself was relatively weak. I don’t regard the repeal of the individual mandate as the death knell for the bill,” says Scott Harrington, a professor in the health Care Management and Insurance and Risk Management departments at the Wharton School, University of Pennsylvania. A lot of people chose to pay penalties rather than get insured - including people who were actually eligible for subsidies, Harrington notes.
“It’s possible that carrots can be more effective than sticks” in motivating people to get insured, said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University’s Heinz College. “People can get a plan for zero premium – though they might not necessarily know that,” he adds.
Medicaid, too, could buttress the ACA as it faces political challenges. So far, 32 states and the District of Columbia have expanded Medicaid (sometimes in a non-traditional way, with the OK of federal waivers) under Obamacare. Before the GOP effort to repeal the law, several more states were considering expanding Medicaid, which provides health care coverage to poor people, but the uncertainty of the future of the program took away some of the impetus.
Now that the law appears to be here to stay, proponents of Medicaid expansion believe more states might come on board. Recent and looming elections could also change the equation in the coming years: Virginia’s Gov.-elect, Ralph Northam, ran on a platform that included Medicaid expansion, notes Robin Rudowitz, a Medicaid expert at Kaiser. (The state legislature will also include more Democrats, though a tie-breaking exercise on Thursday in Richmond keeps a narrow GOP majority in the House of Delegates). Kansas’s legislature had approved Medicaid expansion but failed to override a veto by Gov. Sam Brownback. A new governor might choose differently after this fall’s elections.
States hit hard by the opioid addiction problem are also eyeing Medicaid to defray the costs, Rudowitz notes, which could increase interest in the program.
And while the political fight has been going on, public support for Obamacare has been growing, according to polls. Gallup found last summer that 52 percent of Americans support the law, and in another survey, reported that just 13 percent wanted wholesale repeal.
Americans still have frustrations with the law, complaining about growing premiums and the dearth of insurance providers in some states and counties. But they like – and have grown accustomed to – such popular elements as being allowed to keep adult offspring on insurance plans until age 26, or being guaranteed the opportunity to obtain insurance despite having a pre-existing medical condition.
“People were realizing it’s actually a good thing. You don’t realize what you have until it’s gone,” Gruber says. And for the foreseeable future, it appears Obamacare is here to stay.
Susan Milligan is a political and foreign affairs writer and contributed to a biography of the late Sen. Edward M. Kennedy
Source: US News & World Report