Historians take note: What America looked like before Obamacare

CORRECTION: An earlier version of this post incorrectly named the organization that produced the report. It is the Commonwealth Fund.

It has yet to be fully implemented, but the president’s health-care law is already being hailed as a failure, with unforeseen consequences, or a huge success, depending on whom you ask.

The truth, of course, is that it’s too soon to tell. The rollout was marred by Web site malfunctions and fewer signups than hoped for. But even if it hadn’t just been extended, the original sign-up deadline has yet to be crossed. And, ultimately, the program will have to be judged against what it seeks to fix.

So what did America look like before the Affordable Care Act (i.e. in 2010, 2011 and 2012)? Well, a large slice of Americans lacked adequate health coverage, according to a Tuesday Commonwealth Fund report. About 79 million — more than one in four Americans — either lacked health insurance or were underinsured (defined as those who were insured, yet spent a high share of their income on medical care).


Health insurance, pre-Obamacare. (Commonwealth Fund)

Huge chunks of the poor suffered from inadequate coverage, a problem that was spreading into the middle class as well. The recent past was characterized by “a decade or more of people losing health coverage and a steady erosion in the financial protection of insurance has also put middle-income families at risk,” according to the report’s analysis of recent Census data.

Here’s a look at how the report describes pre-Obamacare America:

1. The poor disproportionately lacked adequate coverage

Exactly 20 percent of Americans live below the poverty level. But 37 percent of the uninsured non-senior adults qualify for that demographic. Even more — exactly half — of the underinsured lived below the poverty level in 2012.


Health insurance, pre-Obamacare. (Commonwealth Fund)

2. There was wide variation among states

Massachusetts, which pioneered universal health care creating a health exchange in 2006, had the lowest rates of inadequate coverage by 2012. There, 14 percent of the population was underinsured or uninsured. Texas had it worst — 38 percent of the population lacked adequate coverage. In Massachusetts, just four percent lacked health insurance altogether, while in Texas, more than one in four — 27 percent — did.

The Northeast was home to several states with low rates of lacking coverage. The South and West were home to many states with higher rates.


Health insurance, pre-Obamacare. (Commonwealth Fund)

3. Inadequate coverage afflicted people in the middle-income range, too

More than nine in 10 of the 79 million with inadequate coverage had low- to middle-incomes, as falling below 400 percent of the poverty level. (People with incomes between 100 percent and 400 percent of poverty are eligible for tax credits to pay insurance premiums under Obamacare.)

Among those in the middle-income population — earning between 200 percent and 400 percent of the poverty level — rates of adequate coverage were highest in Hawaii and Massachusetts, where only 9 percent were uninsured or underinsured. Adequate coverage was most lacking in Texas, Alaska and Wyoming, where 28 to 31 percent of the middle-income population were uninsured or underinsured.


Health insurance, pre-Obamacare. (Commonwealth Fund)

4. Insurance costs were outpacing income increases

For a decade, health insurance was getting expensive at a faster rate than incomes were accumulating for middle- and low-income families.

You can see that acceleration in how fast premiums on employer-sponsored insurance plans rose. In 2003, the average annual premium was about 15 percent of the median household income for non-seniors. By 2012, it had risen to 22 percent, as shown in the two maps below. By that year, only in Minnesota did premiums account for a share smaller than 17 percent of the median income.

While premiums rose, the value of benefits fell, too. Deductibles more than doubled for plans provided by larger and small employers.

“This increase — plus other cost-sharing or limits on benefits — has left insured patients paying a higher share of medical bills,” the authors write. “With little or no growth in incomes over a decade, insurance and care have become less affordable.”


Health insurance, pre-Obamacare. (Commonwealth Fund)

5. About one in 10 was outspending the Obamacare premium threshold

Based on new data, the report’s authors estimate that 29 million non-seniors were paying more on premiums than they would be required to under Obamacare. In most states, between 12 and 14 percent were paying in excess of the new law’s thresholds. The poorest of this group would be eligible for Medicaid under the Affordable Care Act’s expanded program, but about half the states have declined or not yet opted into it.

“[I]f all states participate in Medicaid expansions, at least 11 million insured people with high premiums compared with incomes could receive premium help based on their income alone,” the authors estimate.


Health insurance, pre-Obamacare. (Commonwealth Fund)

The success of the law will be measured by how it addresses the problems described in the report and at what cost. It has potential to “change the insurance and access map of the country,” but it could also fall short and just convert the uninsured to underinsured, the report’s authors write. Whatever its impact, Obamacare will be measured against the baseline laid out above.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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