The Patient Protection and Affordable Care Act, which even President Barack Obama calls Obamacare, is approaching a moment of truth, and it’s not likely to be pretty. Starting Oct. 1, Americans without health insurance supposedly will be able to sign up online for standardized affordable coverage through marketplaces operated by their state, the federal government or a combination of the two.
Both the mechanics and the politics of setting up these marketplaces, also known as exchanges, have proved difficult, and several states have indicated they may be unable to meet the Oct. 1 deadline.
Significantly, these states include California, viewed as a model by Obamacare’s advocates. The Golden State embraced the federal health-care law when it passed in 2010. It was the first state to create an exchange, called Covered California, and it has broad political backing in a state where Democrats hold the governorship and a legislative super-majority.
Peter Lee, executive director of Covered California, downplays the importance of possibly missing the Oct. 1 deadline for online enrollment.
“The date we care about is Jan. 1, when coverage takes effect,” he told the Los Angeles Times.
Lee said that Californians anxious to sign up before online enrollment is available can do so through call centers, enrollment counselors and insurance agents. California as well as Connecticut, Maryland, Vermont and Washington have already set up call centers; a number of other states plan to do so before the end of September.
Whether or not states make their deadlines, Obamacare will make a difference. By January, insurance companies will no longer be able to deny coverage because of pre-existing medical conditions, drop policy-holders who become ill or set dollar limits on the amount of insurance.
These are important changes, but the test of whether Obamacare achieves its ambitious goal of providing health care for millions of uninsured Americans hinges in large measure on whether the exchanges work as advertised. Seventeen states and the District of Columbia will set up exchanges and another seven states plan to partner with the federal government, which will operate the exchanges on its own in the other states.
Persons who are not insured by their employers or on Medicaid, the federal-state program that provides health care for the poor, will be able to enroll for coverage on the exchanges if their annual income is less than $45,960 for an individual or $94,200 for a family of four. Shoppers will have the choice of at least two levels of plans, three or four on some of the exchanges. Many enrollees who can’t afford even the least expensive policies will be eligible for federal subsidies to help them buy insurance.
With exceptions, individuals who do not obtain health care insurance by March 1 face a penalty of $95. Republicans detest this provision, which the Obama administration refers to as a mandate and the U.S. Supreme Court in upholding the law in 2012 called a tax.
But the question about the mandate is not its constitutionality but its sufficiency. Since the penalty is a pittance in comparison to the cost of even the cheapest plans that will be offered on the exchanges, many experts question if it will induce young, healthy Americans to sign up for health insurance. If they don’t, the cost of health insurance for everyone else will increase.
The exchanges are plowing other uncharted territory. Will policies actually be “affordable,” as advertised? Kaiser Health has provided considerable detail on its website about what various plans will cost in different states, but only time will tell if they are affordable.
A survey by National Journal found that “for the vast majority of Americans, premium prices will be higher in the individual exchanges than they’re currently paying for employer-sponsored” benefits. An analysis by the Stanford University School of Medicine reached an opposite conclusion and suggested that some employees may dump the coverage they receive at work to sign up for cheaper coverage on the exchanges.
In any case, work-based health coverage seems headed for the dustbin of history. Many large employers (IBM, for instance) are dropping health coverage for new employees or part-time employees (Trader Joe’s.) And many workers have never had employer-sponsored health benefits — or indeed any coverage at all, which is the rationale for Obamacare in the first place.
Perhaps the trickiest question about Obamacare is whether the uninsured know enough about its provisions to enroll in the exchanges. The early evidence suggests they do not.
Kaiser Health, an assiduous tracker of Obamacare, found in an August survey that 62 percent of the uninsured and an identical percentage of young adults (18 to 25 years old) did not understand how the law would affect themselves or their families.
It gets worse. Forty-four percent of those surveyed did not even know that Obamacare was law: they were divided among those who were unsure of its status or thought it had been repealed or overturned by the Supreme Court.
So it’s not surprising that slight majorities of Americans surveyed by Kaiser and Gallup oppose Obamacare. Opposition may be growing as deadlines near; a recent USA Today/Pew Research Poll found a 52-43 majority against the law.
The states that are designing their own exchanges are waging media campaigns to close the information gap, and the federal government is chiming in with a less well-funded effort in states where they will operate exchanges. But the knowledge gap remains immensely challenging.
Another potential challenge is physician availability. To hold down premium costs, insurers are limiting the number of doctors and hospitals available to patients who buy insurance through the exchanges. The Los Angeles Times, reviewing the situation in California, found that Health Net, an insurer with many of the cheapest policies, will provide less than a third of the doctors who are available under employer-insured plans. Blue Shield, another leading insurer in California, is expected to provide half as many doctors for exchange enrollees as it does for those with employer-based insurance.
California, which seeks to enroll 1.4 uninsured people through the exchanges, has advantages over most states. Covered California has signed up a dozen insurers, giving uninsured Californians broad choices, and is heavily promoting enrollment. In Missouri, in contrast, the exchange operated by the federal government is, according to The New York Times, “being run like a covert operation, with no marketing or detailed information about its products or their prices.”
Missouri is an extreme version of the situation that prevails in a number of states where Republicans control the statehouses. One stark example is Florida, where Republican Gov. Rick Scott is trying to stop county health departments from assisting people to sign up on the exchanges.
Actions such as these have led nonpartisan economist and historian Zachary Karabell to blame Republican hostility to Obamacare for rending much of it unworkable.
Writing in a blog distributed by Reuters, Karabell described Obamacare as “an uneasy blend of free-market incentives and government regulation” that was seeking through competition to provide universal access to health care at a reasonable cost.
“But that assumes that states implement it in good faith,” he wrote. “The staunch opposition of Republicans has meant that many states with little regulation of insurance companies or health care are delaying or actively resisting many aspects of the bill.”
Obamacare’s difficulties aren’t entirely the fault of its opponents. The Health and Human Services Department delayed repeatedly in spelling out the services that exchanges must provide, squeezing states in their effort to prepare. The Obama administration stumbled on another provision of the law requiring employers with more than 50 full-time employees to offer health-care coverage or pay fines before deciding in July to delay this requirement for a year. Although probably necessary, this postponement has encouraged Republicans and some business groups to believe they can repeal this provision altogether. It promises to be a prominent issue in the 2014 midterm elections.
Despite all the start-up difficulties, Obamacare supporters remain optimistic that the Affordable Care Act will become popular once those lacking health insurance are able to buy it at reasonable cost. They point out that momentous social legislation of the past — Social Security, Medicare and voting rights laws, for instance — faced both fierce political opposition and implementation difficulties.
But Obamacare is in a class by itself. The Civil Rights Act of 1964 and the Voting Rights Act of 1965 had enforcement mechanisms that Obamacare lacks. Social Security and Medicare are centrally administered federal programs. Once they were enacted, states had little say in what happened next.
The exchanges that the Affordable Care Act will create are a novel experiment both in federalism and in what Silicon Valley calls “coopetition,” an awkward coined word that describes cooperation between government and private entities. People will enroll for insurance coverage on state or federal government websites. They will buy insurance from private companies. Many of the newly insured — if they are sufficiently informed to do so — will then go back to the government to obtain subsidies in the form of a tax credit for this coverage.
Will this work? No one really knows, but the exchanges represent an imaginative approach to the unsolved problem of providing health-care coverage for millions of Americans who never see a doctor unless they wind up in an emergency room. If the exchanges succeed in even a few large states, it’s likely that other states will copy the results.
At least that’s the hope of Obamacare’s advocates.
— Lou Cannon, a Summerland resident, is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally. Click here to read previous columns. The opinions expressed are his own.