After 62 House votes to repeal Obamacare, Congress finally passed a bill it could send to President Obama’s desk. That won’t change anything, of course, given Obama’s inevitable veto. Since it looks like we won’t be getting rid of Obamacare anytime soon, maybe it’s worth assessing how well the law is doing nearly six years after its passage.
It’s time for an Obamacare checkup.
Despite much doom and gloom portended for years by the law’s opponents, Obamacare looks surprisingly . . . healthy. Consider its performance on four major fronts.
First, expanding health insurance coverage, the law’s primary objective.
Between the year that the Affordable Care Act passed (2010) and the first half of 2015, the share of Americans younger than 65 who were uninsured was nearly halved, falling from 18.2 percent to 10.5 percent, according to the Centers for Disease Control and Prevention.
For comparison, just before the law was passed, the Congressional Budget Office projected that it would reduce the nonelderly uninsured rate to 9 percent in 2015. That CBO estimate was premised on all 50 states expanding Medicaid, though; a subsequent Supreme Court ruling allowed states to opt out, and today only 30 states and the District have expanded Medicaid. In this context, the law looks remarkably successful.
Second, cost control.
In 2010, there was a lot of discussion about “bending the cost curve.” That meant not necessarily reducing health-care spending but preventing spending from growing as quickly as it had in the years before health-care reform.
On this objective, the law has exceeded everyone’s wildest dreams.
Shortly before Obamacare was passed, experts predicted that national health expenditure growth rates would be 5.5 percent in 2013 and 7 percent in 2018. In reality, 2013 growth was 3.6 percent, and for 2018, experts now predict a pace of 5.3 percent, according to the Centers for Medicare and Medicaid Services.
Growth in health-care prices, as measured by both premiums and even overall medical care costs, has also fallen way below the pace of the decade leading up to the passage of Obamacare. Likewise, today’s trends are lower than what the Congressional Budget Office and other forecasters projected in 2010.
Lower-than-expected health-care costs have also resulted in lower-than-expected public health spending. In 2009, the CBO forecast that Medicare would cost $723 billion in 2015; according to the latest estimates, it cost about $90 billion less than that last year ($634 billion).
The question, of course, is whether Obamacare really deserves all the glory for this good news.
Some of the slowdown in spending growth is probably attributable to the sluggish recovery (and indeed, health-care spending has slowed or even fallen in other developed countries dealing with their own economic struggles). Expiring patents on some popular brand-name drugs may have played a role, too.
Most worryingly, the implementation of Obamacare’s strongest cost-control tool — the unpopular “Cadillac tax” on high-cost health plans — has been kicked down the road. Surveys of employers suggest that the threat of this impending tax has already spurred them to find ways to hold down costs, but if the tax gets delayed indefinitely, its motivating power will diminish.
Third, the labor market.
Obamacare’s passage was accompanied by fears that it would encourage people to drop out of the labor force (since they would no longer need to work to get insurance) and encourage employers to shunt full-time workers into part-time positions (to dodge a new mandate for larger firms to offer all full-time workers health insurance).
There have been anecdotal examples of workers and firms affected by both incentives. But right now this looks like the dog that didn’t bark. A new batch of studies suggests that this “job-killing,” part-time-work-shifting law has had no discernible effect on labor markets. That may change with time, of course, as more firms become subject to the employer mandate.
Finally, public opinion.
Whatever the law’s successes, Americans still seem to mostly hate it. At least, they say they hate it, even though they like what it does.
Surveys show that Americans are pretty keen on almost all of Obamacare’s specific provisions, such as guaranteeing coverage for people with preexisting conditions, the Medicaid expansion, no out-of-pocket costs for preventive care, and letting children stay on their parents’ health plans until age 26.
In other words, Obamacare has a branding issue. But given how many court and legislative challenges the law has survived, I’d say that even on this metric, our patient’s prognosis still looks good.