IT is just over three years since Barack Obama signed the Affordable Care Act, now known as Obamacare, into law. The legislation has survived major challenges since that time, including a Supreme Court judgement, thirty-seven votes to repeal in the House of Representatives, and the Catholic Church’s contesting the requirement that insurance should cover contraception, and implementation is surprisingly on track. But the period leading up to the mid-term elections in November next year will be a critical time for healthcare reform, with the law’s provisions to expand health insurance cover, including the mandate to buy insurance and the expansion of Medicaid (the health program for the poor), due to take effect on 1 January 2014.
“The law is here to stay,” Obama declared at a White House event in May. But although he was re-elected with Obamacare as a key plank in his platform, the Republican Party remains united in complete opposition. Many Republicans have called the law a “train wreck” waiting to happen, and believe that letting the law fail, spectacularly, is the quickest way to get rid of it. “This thing can’t possibly work,” claims Senate Republican Leader Mitch McConnell, a prominent doomsayer. “It will be a huge disaster in 2014” and “an albatross around the neck of every Democrat who voted for it.”
In Congress, the grandstanding has been around votes to repeal the law, but the real GOP tactic is to do nothing. This extends not only to depriving the Obama administration of the funds needed to implement the reforms, but also to refusing to make needed technical changes to the legislation. This is a major break with the past; laws on this scale such as Medicare, Social Security, and the Children’s Health Insurance Program have been fine-tuned many times after their enactment. This element of the Republican strategy is aided by Democrats’ fears that reopening a politically charged law could threaten their re-election chances. As a result, a landmark law that almost everyone agrees has flaws is likely to take effect unchanged.
At the state level, meanwhile, a number of Republican governors are refusing to implement the provisions for expanding Medicaid and establishing insurance exchanges, even though most of the costs are covered by federal funds.
Even without controversy, implementing the Act was always going to be a complicated and protracted task. The law covers a sector that accounts for nearly one-fifth of America’s gross domestic product and its provisions have an impact not just on governments and healthcare providers but also on businesses, employers and every voter in the country.
Although the law contains many provisions, its main goal is to expand health insurance. Beginning in 2014, every Americans will be required to have some form of health insurance. Essentially that’s how the scheme funds the prohibition on insurers refusing coverage to those with pre-existing conditions. For the less well-off, the law extends Medicaid to all those earning up to 133 per cent of the federal poverty level. From 2014, those with incomes of between 100 and 400 per cent of that level will qualify for subsidies to purchase health insurance through the new state health exchanges, which will act as competitive markets for an array of approved insurance products. A different set of exchanges will cater to small businesses, which currently lack the marketplace clout to negotiate affordable health insurance for their employees. Together, these provisions will cover an additional thirty-two million Americans.
The exchanges must be ready by October 2013 so that consumers can choose insurance beginning in 2014. The Affordable Care Act envisioned most states establishing and running their own insurance exchanges, and $1.8 billion has so far been provided to help with this task. But only seventeen states and the District of Columbia are moving ahead with these exchanges; another seven are setting up “partnership exchanges” with the federal government. Twenty-six states, mostly Republican-led and including six of the ten most populous states, are leaving the job entirely to the federal government. In an ironic upending of conservative philosophy, this will see the federal government play an increased role in healthcare.
The other major healthcare initiative designed to cover the uninsured – expanding Medicaid to include more low-income Americans – is opposed by at least twenty governors. This is despite the fact that the federal government would pay 100 per cent of the costs of this expansion from 2014 to 2016, and up to 90 per cent thereafter – a deal that would see states save money because they would no longer be required to pick up the bill for uncompensated hospital care. The Supreme Court ruling last year gave states the option of choosing not to participate in the Medicaid expansion. In states that don’t commit to the expansion, people who are too poor to buy coverage in the exchanges, even with a federal subsidy, will be left without insurance. This could add up to as many as 11.5 million people, or half the people who could potentially be newly eligible for Medicaid.
SOME Republican governors, even those with Tea Party bona fides, have read the tea leaves and chosen to go with the Act. Governor Jan Brewer of Arizona, a vocal opponent of Obamacare, will expand Medicaid in compliance with the law; Governor Rick Scott of Florida has secured a waiver to expand Medicaid; and the Republican governors of New Mexico and Nevada have acknowledged the support for healthcare reforms in their growing Hispanic populations by indicating that they will support state exchanges and Medicaid expansion.
A large number of other Affordable Care Act provisions have already taken effect. The healthcare law forbids insurers to deny coverage to sick people, allows young people to stay on their parent’s policy while they are still dependents, and limits what older adults can be charged. Medicare recipients pay less for prescription drugs and preventive health services have no co-payments or deductibles. Medicare has started to reward hospitals for providing good (rather than lots of) care, and there is mounting evidence that the overall growth in health spending has slowed.
In the dozen or so states that have started releasing details of their new insurance markets, insurer interest is robust – a good signal for competition, especially in those states where one insurer has dominated. The plans to be offered from next year are also more comprehensive than many bare-bones policies currently available to individuals.
In California and Oregon, premiums for plans purchased through the exchanges are likely to be lower than previously estimated. In Washington, over 200 approved plans will be available for purchase through the exchanges. While the full range of health exchange options for small businesses will not be implemented until 2015, all of the so-called SHOP exchanges will have at least one plan available in 2014. Many states have already established websites to help consumers compare health plans and determine their eligibility for tax credits, and to provide assistance with enrolment.
ALTHOUGH President Obama’s healthcare reforms have been a political football in two election seasons, and will be again in 2014, this time it will be different. There will be no room for myths about death panels, Medicare cuts and government rationing of healthcare services. Voters will have real initiatives to judge. Still, the ability to assess the new reality will vary greatly between residents of states such as California, Oregon, Maryland, Massachusetts, New York and Vermont, who will see substantial gains from the new law, and people in Texas, Florida, Alabama and Wisconsin, where state efforts have been minimal. The risk for Republicans is that if Obamacare is assessed by voters to be working reasonably well, Republicans will be seen as obstinately standing in the way of progress. Even conservatives want to get a good deal in healthcare, especially if it costs less.
For progressives, there’s a different question. How does the reality of reform differ from their vision of it? A significant number of people would like to see universal health insurance or Medicare-for-all; for others, the problem will be that highlighted improvements have not come fast enough.
Despite all the heat over healthcare reform over the past three years, there has not been much light. A poll taken in April found that 40 per cent of Americans were unsure about whether the Affordable Care Act still existed. An additional 7 per cent thought that the Supreme Court had overturned it last year and 12 per cent thought that it had been repealed by Congress. Among those who know the law exists, divisions remain. The latest CNN poll, released on Memorial Day, shows only 43 per cent support Obamacare. But about one-third of those who oppose the law say they do so because it isn’t liberal enough. So another way to interpret these results is that 59 per cent of Americans support a system that is as liberal or more liberal than Obamacare, well ahead of the 35 per cent who don’t.
An optimist might say that this has all the hallmarks of a successful and popular initiative, albeit one that has been protracted and controversial in its implementation. And the reality is that even if a Republican wins the White House in 2016, Obamacare is likely to survive. There are two primary reasons why: people don’t like to lose benefits, and there is growing recognition that the nation and its citizens pick up extra costs when a major portion of the population is without health insurance.
Back in July 2009, South Carolina senator and Tea Party activist Jim DeMint declared that Obamacare would be the president’s Waterloo. “It will break him,” he said. But almost three years on, Obama is still in the White House, the derisive term “Obamacare” has been embraced by Democrats and the president himself, and DeMint is no longer in the Senate. •
