July 28, 2017 at 5:55 PM
The Affordable Care Act has reshaped the nation's health-care landscape in a way the country has not seen since the passage of Great Society programs in the 1960s. For more than seven years, it has been the foundation for a slew of new regulations and a massive redistribution of funds within the medical system. And it has changed what Americans expect of their government — which is why Republicans, despite having used the ACA as a political rallying cry for seven years, have encountered such difficulty in peeling it back.
For the moment, the ACA appears to have cemented its place in the American firmament, and its continued existence is likely to make some aspects of the law — such as the expansion of Medicaid coverage in 31 states and the District of Columbia — nearly untouchable. Its overall popularity reached 50 percent in a Kaiser Family Foundation poll this month, up from 43 percent in December.
But it still faces major challenges, including that more than three dozen U.S. counties on the federal exchanges may lack an insurer next year, premiums on the individual market are rising, and President Trump has suggested repeatedly that he hopes to see the ACA market collapse in the months to come.
The law known as Obamacare has achieved some of its central aims, including driving the percentage of uninsured Americans down to historic lows, eliminating lifetime caps on insurance coverage and expanding the extent to which insurers had to cover services including preventive care and mental and substance-abuse treatments. But it has failed to contain rising health-care costs, while expanding both the amount of money the federal government spends on health care and its role in dictating the terms of the insurance market.
Hoover Institution research fellow Lanhee J. Chen has spent years arguing that the country needs to tackle the ballooning costs of entitlement programs such as Medicaid and allow consumers more choice in the kind of health-care coverage they buy. In the wake of the collapse of health-care legislation in the Senate, Chen said Friday that he was struck by "how the Affordable Care Act is so deeply ingrained, in many ways, in the fabric of American public policy."
He noted that even requirements such as staying on one's parents' insurance until the age of 26, or getting coverage regardless of preexisting medical conditions, "have reached almost entitlement-like status for many Americans. That's sort of staggering for me."
Or as bioethicist and oncologist Ezekiel Emanuel, one of the ACA's architects, put it in an interview Friday, "It's going to structure health care in this country for the next 30 or 40 or 50 years, just the way Medicare and Medicare did for 40 or 50 years."
Tennessee Insurance Commissioner Julie Mix McPeak, president-elect of the National Association of Insurance Commissioners, spent Friday conferring with other insurance officials trying to get answers on whether lawmakers and the administration would be willing to commit to providing the billions of dollars in cost-sharing reduction payments that help offset low-income consumers' out-of-pocket costs under the ACA's individual market.
While the answer to that is elusive — and McPeak warned that "that window is rapidly closing," since insurers must submit final 2018 rates by Aug. 16 — she had no doubt that the task before her was to make the current system work.
"It is the law of the land, and we are going to enforce it as such," McPeak said.
Some insurers are losing money on the exchanges. CareFirst BlueCross BlueShield chief executive Chet Burrell said his company is on track to lose $200 million on the individual market this year. But an increasing number of them are breaking even or seeing a track to becoming profitable.
"This is year four, and we're comfortable with how we are doing financially. We see the light at the end of the tunnel, and we continue to grow," said John Lovelace, president of government programs at UPMC Health Plan.
A bipartisan group of senators have begun discussing if they can deliver on the two major fronts that insurers and regulators have been clamoring for: the cost-sharing subsidies, which would cost about $7 billion this year and $10 billion in 2018, and additional funds for a national reinsurance program. Without those guarantees, many companies offering plans on the exchanges predict they will either hike insurance rates dramatically or withdraw from the markets altogether.
Medica, a Midwestern insurer that is the sole company signed up to offer plans statewide on Iowa's and Nebraska's exchanges next year, is now revisiting the rates that it filed with regulators. To account for the possibility that cost-sharing reductions won't be made, the company is likely to request additional increases anywhere from 12 to 20 percent, said Geoff Bartsch, vice president and general manager of individual and family business at Medica.
In Iowa, one of the states where Medica will be the only insurer selling plans on the exchange, the company already requested a hefty increase of 43.5 percent.
There are 40 counties currently at risk of having no insurer selling plans on the exchanges, which could leave 27,660 people without coverage, according to a Centers for Medicare and Medicaid Services analysis last updated Wednesday. There are also 1,332 counties projected to have a single insurer.
Dan Holler, a vice president at Heritage Action, the advocacy arm of the conservative Heritage Foundation, said the battle to unwind the ACA is not over — in part because the law is failing. The idea of a bipartisan solution was unrealistic, he added, in part because Democrats' proposals all involve spending more federal funds.
"In some ways, a very public failure is certainly embarrassing for the Republican Party, and extraordinarily frustrating for conservatives," Holler said. "The hope is that it is such a stunning setback that the holdouts in the Senate look at the new reality and say, 'Wow, this isn't what I thought was going to happen. I don't want to be stuck tweaking around the edges of Obamacare. Let's get back to the table.' "
Like any major policy shift, there have been winners and losers under the ACA. A recent analysis by Mark Farrah Associates suggests that the number of consumers buying individual insurance off the exchanges dropped 29 percent over the past 12 months. None of those people get subsidies, unlike more than 80 percent of those on the exchanges.
"They're completely unprotected from these big rate increases," said health-care consultant Robert Laszewski.
Alan Fischler runs a small law practice in Bethesda and buys health insurance for his family of four without the aid of federal premium subsidies. Fischler is a Democrat and a supporter of the ACA, but he says that the premium increases have, for the first time in his life, made him feel victimized. Last year, his family's premium was $15,000 for the year, but it nearly doubled to $28,000 in 2017. The family deductible also went up, meaning that his family is essentially on the hook for $41,000 in medical costs before the "insurance" really begins to cover medical costs.
"This is for a family that probably uses under $10,000 of medical a year," Fischler said. "It's for the first time caused me to think about it — we'd never go without insurance, but the question is how do you not become a victim?"
But for others, especially the working poor, the 2010 law has afforded them a new level of economic security. Of the roughly 20 million Americans who have gained coverage since its passage, more than half came from the expansion of Medicaid to childless adults and low-income parents earning up to 138 percent of the federal poverty level.
"For Americans who are living closest to the poverty line, what the ACA has done is assured them that they will be able to have affordable, real coverage," said Frederick Isasi, president of the advocacy group Families USA.
And that has created a new political constituency. Sen. John McCain (R-Ariz.), who cast the deciding vote that doomed the Senate health bill, did it in part because his state expanded Medicaid, and many including the governor and the state Chamber of Commerce opposed rolling that back.
More broadly, the percentage of uninsured non-elderly Americans averaged around 16 percent between 1995 and 2007, according to the Kaiser Family Foundation, and then rose during the ensuing economic recession. In 2016, this rate dropped to 10 percent.
Many policy experts across the political spectrum, as well as elected officials, said the very expansion of health coverage makes it more urgent that policymakers take steps to curb the cost of medical care.
"Once everyone's in the system, one of the challenges is, how do you pay for it all?" Emanuel said. "And the focus becomes on cost."