The Patient Protection and Affordable Care Act, or Obamacare, is finally off the critical list. If Obamacare were a patient we could say that the condition was stable, but with an uncertain prognosis. If the health-care law were instead an army, we might quote Winston Churchill, who described a crucial British military victory during World War II, as “not the end ... not even the beginning of the end but, perhaps, the end of the beginning.”
Whatever the analogy, Obamacare remains an uncertain work in progress for the federal government and the 14 states and District of Columbia that operate exchanges, or marketplaces, at which the uninsured can enroll for health-care insurance. (Idaho and New Mexico will this year join the list of state exchanges, boosting the number to 16.)
In their first year of operation, state exchanges have varied widely in performance. Covered California, the sophisticated health-care exchange in the Golden State, has despite early struggles enrolled 1.4 million people, about a fifth of the national total. Executive director Peter V. Lee announced last Thursday that Covered California also enrolled 1.9 million Californians in Medi-Cal, the state version of Medicaid, which provides health coverage for low-income Americans.
Lee called the figures “a huge number” and said the enrollees “are part of history.”
Exchanges in at least a half-dozen other states joined California in exceeding their original goals. The Connecticut exchange, Access Health CT, signed up 200,000 peope for health insurance, double the initial estimate. Other exchanges that have performed well overall include Kentucky, Michigan, New York, Rhode Island, Vermont and Washington.
In contrast, exchanges in Hawaii, Maryland, Massachusetts, Minnesota and Oregon have completely flopped — although not for lack of trying. All of these states have Democratic governors committed to Obamacare. They have stumbled because of technological hurdles that unprepared state officials have been unable to surmount.
Lack of technical expertise also nearly did in the federal exchange, HealthCare.gov, last October. The repeated breakdowns accompanying the federal rollout for a time threatened the existence of the health-care law and eventually led to the resignation of beleaguered Health and Human Services Secretary Kathleen Sebelius.
The No. 1 problem of the exchanges that failed was explained cogently by Sabrina Corlette of the Georgetown University Health Policy Center to the Los Angeles Times: “You have government employees who are well-intentioned, good people but who don’t understand software code and basically have to trust that the vendors they hire know what they are doing. There was such a gold rush on the part of these vendors that there was lot of over-promising and underpricing.”
Nationally, the Obama administration claims that 8 million people have signed up for health insurance and 3 million for Medicaid on the various exchanges. These numbers are somewhere between an estimate and a guess. Even Sebelius acknowledges that 10 percent to 20 percent of the sign-ups may not have paid their insurance premiums. A 20 percent-falloff would mean that only 6.4 million of the sign-ups actually had bought health insurance. On the other hand, the Medicaid figure is almost certainly low, given the late spurt in California and other states.
Also uncounted are people who bought policies directly from insurance companies, avoiding the complexity and delay of the exchanges. There could be millions of such people, “hiding in plain sight” as The New York Times puts it. What isn’t known, in addition to their numbers, is how many of them previously had health insurance policies that were canceled despite President Barack Obama’s unfortunate promise that anyone who liked his health insurance policy could keep it.
Much of the mystery about the numbers should be cleared up relatively soon as exchanges and insurers digest the enrollment data. The data has lagged because the administration extended the March 31 enrollment deadline, allowing those who had applied but had been unable to enroll to complete the process without penalty. Covered California did even more, moving its deadline to April 15.
Whatever the final numbers, more Americans now have health insurance than at any time since the Great Recession. The Gallup-Healthways-Well Being Index found that the national rate of medically uninsured dipped to 15.6 percent in the first quarter of 2014, a 1.5 percent decline since the fourth quarter of last year and the lowest rate since late 2008. A survey by the RAND Corp., confirmed Gallup’s findings and added a surprising twist. RAND found that the largest number of new signups for health insurance — about 8.2 million people — came not from the exchanges but from expansion of workplace insurance, which declined during the recession.
Despite the spurt in insurance coverage, the health-care law remains unpopular. A Gallup survey in mid-April found 43 percent of Americans approve of the law and 54 percent disapprove. This finding, grim as it is for Democrats, may understate the impact of Obamacare as an issue in this year’s midterm elections in which Republicans are favored to hold the House of Representatives and take control of the Senate. A USA Today-Pew Research poll found that two of three of those who consider Obamacare “very important” oppose the law.
Still, it won’t be easy for Republicans to turn back the clock. As conservative writer Byron York observed in a thoughtful analysis in the Washington Examiner, Republicans face a practical problem now that Obamacare is in place.
“Exchanges are running — many of them badly, but running,” York wrote. “Subsidies are being paid. Insurance companies have changed the way they do business. Medicaid has been expanded. Special taxes are being collected.”
Over time the health-care law could become embedded into the fabric of American life, as Social Security and Medicare did in prior generations. Republicans have no hope of repealing the law over Obama’s veto while he is in the White House. By 2017, even if a Republican is president and his party controls Congress, 24 million Americans will be receiving health care through the exchanges and another 12 million will be covered under Medicaid and the Children’s Health Insurance Program, according to estimates by the Congressional Budget Office. The vast and interlocking health care and insurance industries would have a shared interest in preserving the law.
But Obamacare is not yet a done deal. The economic viability of the law depends upon the enrollment of enough young and healthy people to offset the higher costs of insuring those who are older and generally less healthy. Until we know what percentage of these supposed “young invincibles” actually signed up, it’s impossible to determine if insurance companies will be able to offer affordable policies going forward.
There are other potential pitfalls. One of the thorniest is a provision of the health-care law that penalizes businesses with more than 50 employees unless they provide health insurance. Trying to avoid a political firestorm, the Obama administration delayed this provision last year. Small business advocates and some economists would like to see this provision abandoned entirely on grounds that it discourages small employers from hiring, but it would take a change in the law to accomplish this.
Will there be changes in Obamacare? Embattled Democratic candidates trying to defuse the issue in their current campaigns have called for “reform, not repeal,” but it remains to be seen if this is anything more than a campaign slogan. Still, there are small signs that some Democrats may be serious about reform and that some Republicans, despite their high-decibel campaign for repeal, agree with them. Recently, the House passed by voice vote a bill that made a minor change in the health-care law by eliminating a cap on deductibles on small-group health insurance policies.
The preconditions for a genuine congressional conversation on health-care reform would be acceptance by Republicans of Obamacare as the law of the land and acknowledgment by Democrats that it needs improvement. That’s a conversation, if it occurs at all, for after the midterm elections. For now, Obamacare must be content that the sterling performance of a few state exchanges has enabled it to survive. The patient is indeed off the critical list, but he’s still a long way from reaching the recovery room.
— 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.