President Obama said Thursday that the Affordable Care Act is working, but he acknowledged that “growing pains” are causing some Americans to be hurt by escalating insurance prices in marketplaces created under the law.
The president said rising premiums and diminished competition in ACA insurance exchanges in some states are especially problematic for people who do not qualify for federal subsidies that the law provides. He proposed that his successor in the White House and the next Congress provide larger tax credits to encourage young adults to buy coverage through the marketplaces and raise the income thresholds to make the subsidies available to more middle-class families.
Obama portrayed the 2010 law revising the health-care system as a “starter home,” saying, “You hope over time you can make improvements.” He sought to tamp down public concern that some major insurance companies are abandoning the marketplaces that are a core part of the law and that remaining insurers are raising their rates. The higher prices do not affect most Americans who still get coverage through a job, the president said, and most of the approximately 10 million people with marketplace health plans are buffered by their subsidies.
Nevertheless, he said, “If you are one of the people who . . . doesn't qualify for a tax credit, these premium increases do make insurance less affordable.” He cast the idea of expanding subsidies as a way to “smooth out the kinks” in the law at a time when the ACA already has helped to drive down the ranks of the uninsured to about 10 percent of the U.S. population. “I don't want anyone to be left out without health insurance,” Obama said.
His 50-minute speech in Miami was a recitation of the law's accomplishments, a repudiation of persistent Republican efforts to tear it down and a road map for refining the law attached to his name — Obamacare — after his tenure in the White House. Coming less than two weeks before the fourth enrollment season begins on Nov. 1 in ACA marketplaces, his remarks also were an attempt to frame the law's benefits as the administration will face a fresh test of the popularity of the health plans the law created.
The subsidy expansions that he proposed embroider on an idea he first broached in an article he wrote about the law that was published in July in the Journal of the American Medical Association. The president also renewed his urging for additional states to join the 31 that have expanded Medicaid as the ACA allows. And he reiterated a position he has adopted this year that consumers would be helped if the government allowed a public insurance alternative in parts of the country that lack enough private companies selling ACA health plans to create market competition.
Reciting a familiar list of ways the law has helped people, whether they have marketplace insurance or any other kind, the president said that the doomsday predictions of the law's GOP naysayers have not been borne out. But he said that “doesn’t mean there aren’t some legitimate concerns about how the law is working now. The main issue has to do with folks who still aren’t getting enough help.”
Without giving specifics, Obama suggested that money for expanding subsidies could be found because congressional budget analyses have shown that the law is costing the country less than was predicted when it was enacted in 2010.
The size of rate increases for the coming year vary significantly from state to state, but attention has focused on some marked hikes, especially in states in which some insurers are dropping out of ACA marketplaces. Both the spikes and withdrawals are motivated by the fact that, on balance, ACA insurance customers have turned out to be sicker than expected and thus are using more medical care.
In Minnesota, for instance, the 2017 insurance premiums in the marketplace for individuals are increasing by 50 percent to 67 percent. In Arizona, the Blue Cross Blue Shield plan on the exchange is raising rates by 51 percent. Around the country, jumps of more than 20 percent are common.
In Miami on Thursday afternoon, Obama cited Social Security, Medicaid, Medicare and the creation of Medicare drug benefits, as he said, “No major social innovation in America has ever worked smoothly at the start.”
He mused that perhaps the partisan furor that has dogged the law will subside once he leaves office. “They can even change the name of the law to Reagancare, or they can call it PaulRyancare,” he quipped. “I don’t care about credit, I just want it to work.”