Health & Medicine

Taking the pulse of Obama’s health care law at age 5

The HealthCare.gov website, where people can buy health insurance, on a laptop screen, is seen in Portland, Ore., Nov. 12, 2014
The HealthCare.gov website, where people can buy health insurance, on a laptop screen, is seen in Portland, Ore., Nov. 12, 2014 AP

With more than 50 congressional repeal votes, a near-death Supreme Court experience and a botched marketplace debut to its credit, the Affordable Care Act has had a tortured five-year existence as the Republican Party’s legislative enemy No. 1.

And since President Barack Obama signed the health care measure into law on March 23, 2010, its troubled legislative history isn’t close to being fully written.

Yet another Supreme Court case threatens to topple one of the law’s main pillars, there’s bipartisan support in Congress to eliminate the tax on medical devices – one of the law’s primary funding mechanisms – and a slight majority of Americans still have negative views of the sprawling legislation.

But despite the political head winds, experts say Obama’s legacy-defining law is quietly accomplishing the goals it was created to achieve.

The nation’s uninsured rate has plummeted as more Americans enroll in Medicaid or in federal and state marketplace coverage.

The law’s consumer protections and insurance-benefit requirements have improved the quality of coverage for millions of people who get health insurance outside the workplace.

Premiums for marketplace health insurance have largely been reasonable and have increased only moderately thus far. Long-term cost estimates for providing coverage under the law have been falling.

Early Congressional Budget Office projections showed the law would trim the federal budget deficit by $124 billion from 2010 to 2019, while its repeal would increase the deficit by more than $100 billion from 2013 to 2022. The CBO can’t update the law’s projected impact on the deficit because of forecasting difficulties.

While it’s too soon to declare a summary judgment on the law, its early success usually would quiet most naysayers.

“Most of the dire predictions made by the critics of the ACA have not come to pass,” said Drew Altman, president and CEO of the Kaiser Family Foundation.

But the law may never overcome the bitter politics that surrounded its enactment and that partly define its legacy.

Long viewed as a government overreach, the health care law has been problematic for those who want the private insurance market to dictate who gets health insurance and what it should cost.

Fiscal conservatives argue that the federal government can’t afford the roughly $1.2 trillion it will cost to subsidize health care for millions of Americans under the law from 2016 to 2025, according to CBO estimates.

Moreover, the law’s requirement that most Americans have health insurance is seen as an infringement on individual freedom. The Supreme Court ruled in June 2012 that the so-called individual mandate didn’t violate the Constitution.

As the poster child for the nation’s partisan divide, the law has eclipsed its health care roots, Altman said, and become “a symbol for its critics of bigger things they’re upset about.”

“They don’t like the president. They don’t like the direction the country is moving in. They don’t like the role of government,” Altman said. “At this point, I think we can ask the American people whether they think the ACA will take us to Mars or solve the climate change problem and we would get a perfect split between Democrats and Republicans.”

That split has come to define not only the politics of the law but also its implementation.

Twenty-eight states and Washington, D.C., have used the law’s Medicaid expansion to widen program eligibility for more low-income adults and children. For states that do so, the federal government pays 90 percent of the new enrollees’ medical expenses in 2015 and 2016 and no less than 90 percent thereafter.

Most of the states that haven’t adopted the Medicaid expansion are led by Republican governors or majority-GOP legislatures. But public and fiscal pressure to accept the federal Medicaid funding is prompting more GOP governors to soften their opposition.

Convincing Republican-majority state legislatures to do the same, however, has proved a tougher sell. Red-state politicians say they’re leery of the federal government’s long-term promise to pay 90 percent of new enrollees’ care.

Even with 22 states not participating, enrollment in Medicaid and the Children’s Health Insurance Program has grown by nearly 11 million people, or 18.6 percent, since just before the health insurance marketplaces opened in October 2013.

<div id="ACAcredits"> <h3>Federal marketplace tax credits by state</h3> <p>In 2015, more than 8.8 million people have signed up or re-enrolled in health coverage on the federal marketplace. Eighty-seven percent will get a monthly tax credit to help pay for their coverage which averages $263.</p> <p style="font-style:italic;">Click on states below to see the enrollment details and impact of premium tax credits by state. 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And 11.7 million people have re-enrolled or signed up for marketplace coverage this year, according to the latest government figures.

The national average cost of premiums for the lowest-priced marketplace “silver” plan – which covers at least 70 percent of medical expenses – increased just 2.9 percent this year, according to a new report from the Urban Institute, a centrist research center.

But storm clouds are brewing. The U.S. Supreme Court will decide in the coming months whether subsidies to help purchase marketplace coverage can be provided only in the 16 states – and the District of Columbia – that set up their own insurance marketplaces.

The plaintiffs in the King v. Burwell case cite a section of the health law that says the tax credits can be applied only to coverage purchased “through an exchange established by the State.” The Obama administration maintains that a full reading of the law makes clear that Congress intended to provide the credits in all states.

If the court sides with the plaintiffs, an estimated 9.3 million people in the 34 states that use the federal health insurance marketplace at HealthCare.gov would lose their tax credits next year, according to the Urban Institute. The ripple effect could undo much of the progress the health law has made in cutting the nation’s uninsured rate.

The Gallup-Healthways Well-Being Index survey found that the nation’s uninsured rate fell from 16.3 percent in the first quarter of 2010, when the Affordable Care Act was signed into law, to 12.3 percent for the first two months of 2015.

That works out to roughly 9.7 million fewer uninsured people, said Dan Witters, research director for the Gallup-Healthways survey.

Over the next decade, the CBO expects the health law to further reduce the number of uninsured Americans by “24 million to 25 million in most years relative to what would have occurred under prior law.”

If the plaintiffs prevail in King v. Burwell, an estimated 6.3 million people would probably become uninsured next year in the 34 states that would lose the subsidies, the Urban Institute predicts.

In Congress, support is building to repeal the ACA’s medical-device tax. The medical-device, insurance and pharmaceutical industries face new taxes and fees under the health law because they’ll see substantial new revenue as more Americans are required to buy health insurance or face tax penalties. The Senate Republican budget proposal for 2016 would repeal the medical device tax.

Aggressive industry lobbying and the sprinkling of device makers across a wide swath of states have fostered support for the tax-repeal measure among several Democrats, such as Sens. Al Franken and Amy Klobuchar of Minnesota and Elizabeth Warren of Massachusetts.

Repealing the tax would create a $30 billion funding shortfall for the health law and require Congress to come up with the money from another source.

Industry lobbying has already cut the tax in half, from 4.6 percent to 2.3 percent. And because the excise tax can be deducted from a company’s income taxes, the true impact will be more like 1.4 percent instead of 2.3 percent. A research and development tax credit of nearly 2 percent further eases device companies’ tax burden.

The device industry claims the tax will hurt the industry’s job growth, but a recent analysis by the Congressional Research Service found “fairly minor effects, with output and employment in the industry falling by no more than two-tenths of 1 percent.”

The analysis, however, did say the tax was “challenging” to justify since excise taxes are typically designed to discourage undesirable activities, such as tobacco use.

“These justifications do not apply, other than weakly, to the medical device case,” the report says.

As the health care law hits age five, it’s way too early to pass judgment on its effectiveness, said health care blogger Robert Laszewski. The law’s main provisions have been in place for only about 18 months, Laszewski said. Marketplace insurers are still being subsidized by the federal government, and only about half of the estimated 22 million marketplace plan members the CBO envisions in coming years have purchased coverage.

“I would rate Obamacare, 18 months after implementation, as incomplete,” Laszewski said. “Anybody who wants to look at Obamacare and talk about whether it’s a success or a failure, call me in 2017.”

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