10 Years And One Pandemic Later, Obamacare’s Impact Is A Lot Clearer

Illustration: Rebecca Zisser/HuffPost

Monday is the Affordable Care Act’s 10th anniversary and two of its architects, former President Barack Obama and House Speaker Nancy Pelosi (D-Calif.), had originally planned to mark the occasion by attending a special event at American University in Washington, D.C. 

It was supposed to be a reunion of the officials who led the effort to pass Obamacare and had been present at the White House signing ceremony on March 23, 2010. 

Now the event, like so much else, is canceled because of the coronavirus pandemic. Organizers said they may find a way to reschedule but, for now, celebration of the Affordable Care Act will have to wait. 

And maybe that’s not surprising, given the controversy and tumult that has surrounded the law ever since it was proposed.

The effort to pass the legislation lasted a year and would have collapsed if Obama, Pelosi and then-Senate Majority Leader Harry Reid (D-Nev.) had listened to all the political advisers counseling them to give up at every difficult moment. 

“We had an opportunity of a generation,” Pelosi told HuffPost recently. “We were not passing it by.”

When the law was finally enacted, she and her allies understood that it was not everything it could be or everything they wanted it to be. The mantra, from Obama on down, was that the new law was a “starter home” for health care reform ― with a strong foundation, solid roof and sturdy walls.

It would need expansion and improvement, but they figured those upgrades would come with time. 

That is not what happened.

Republicans won control of the House in the November 2010 midterm elections and, almost immediately, launched their campaign to repeal the Affordable Care Act. And although they failed, just barely, to pass repeal legislation, they managed to undermine the program in myriad ways, big and small.

Partly because of those efforts, and partly because of how the law was written, the Affordable Care Act looks different today than its architects imagined it would. Polls indicate that the program is more popular than it’s ever been, thanks partly to a backlash against GOP repeal efforts, but its shortcomings have also become more obvious.

Tens of millions of Americans remain uninsured or under-insured, facing large out-of-pocket costs, which among other things deter people from getting the health care they need. That’s a scary prospect at any time, but it’s especially scary when a once-in-a-generation pandemic is sweeping across the country. 

Already, lawmakers are scrambling to help people pay for coronavirus tests and treatment. And it looks like there’s a lot more work to do.

But if the law’s weaknesses were never more apparent, the same goes for its strengths. 

If the Affordable Care Act were not law, if the U.S. health care system still looked like it did before, the number of uninsured and under-insured Americans would be dramatically higher. And there would be fewer options for the millions losing income and jobs in the coming months, as the pandemic-stricken economy grinds to a halt.

Those are not small things.

The Cost Of The ACA’s Compromises

One reason the 2010 signing ceremony felt like such a milestone was history. Every Democratic president since Franklin D. Roosevelt had at least contemplated pursuing major health reforms. Most had failed and the most recent attempt, Bill Clinton’s, was still a fresh memory. 

Democrats were determined to avoid past mistakes and decided ― for better or worse ― that the best way to do that was to minimize disruption of existing insurance arrangements, borrow conservative ideas in order to win over some Republicans, make peace with potentially hostile interest groups, and avoid a huge price tag that they believed would scare the public.

They settled on a reform framework that kept overall spending under $1 trillion, at least for the first 10 years, and more than paid for itself with a combination of spending cuts and tax increases. 

To expand insurance, they relied on Medicaid for the poor and a new marketplace of subsidized, regulated insurance for people buying coverage on their own ― while very deliberately leaving employer coverage largely untouched. 

To limit the cost of medical care, they decided to alter the way Medicare paid for services and a change in the tax treatment of employer coverage.

This approach represented a compromise on what most Democrats considered an ideal system. And once the congressional debate began, leaders had to make even more concessions. They faced unrelenting hostility from Republicans, but also resistance from many in their own party. 

“It was a puzzle that you had to do 535 times, because you were basically solving it for every member of the House and every member of the Senate,” Nancy-Ann DeParle, who ran the White House Office of Health Reform under Obama, told HuffPost in a recent interview. 

Lots of people remember how then-Sen. Joe Lieberman, the independent from Connecticut who caucused with Democrats, killed the public option ― a hoped-for government-run insurance plan that was going to offer an alternative to private coverage and might have someday grown into a version of “Medicare for All” in which the federal government insured everybody directly.

Many fewer remember how then-Sen. Evan Bayh, a Democrat from Indiana, insisted on concessions to the medical device industry. Those concessions involved easing up on a tax the industry faced, which rendered it even harder for lawmakers to make the health care budgeting work.

“It was dead so many times,” Harry Reid recalled, describing the Affordable Care Act as “the most important thing I did in my entire congressional career, over many decades, and also the most difficult.”

The deals Democratic leaders made with industry and with their own members shaped the legislation in ways that affected its implementation. This was especially true for the newly regulated private insurance plans available to people buying their own coverage. 

Because these plans now had comprehensive benefits and because insurers could no longer deny them to people with preexisting medical conditions, they were more expensive. 

The law’s tax credit subsidies were supposed to offset the higher prices, and millions got comprehensive insurance because of them. But the subsidies tapered off as income rose and cut out altogether at four times the poverty line, which today is about $100,000 a year for a family of four. 

As a result, many middle-income families found the only coverage available was expensive ― in some cases, prohibitively expensive ― and even then came with high deductibles. Making matters worse, Obama had promised that people could “keep their plans” if they liked them. 

But once the new system launched in 2014, many insurers simply stopped offering their old policies. When Americans with those plans found out, they were furious. 

The Price Of The GOP’s Obstruction

In principle, softening that blow should have been easy. All it would have taken was a little extra financial assistance, with a little more government spending, in order to provide more of a cushion for the higher prices. But Republicans refused to endorse that idea or any others that could shore up the system. 

Instead, they looked for ways to attack the law. And they found quite a few. 

One particularly important blow was the defunding of a “risk corridor” program designed to insulate insurers from major losses. That led to the shuttering of some smaller insurer plans while forcing bigger ones to raise premiums, to the point where many people who qualified for little or no subsidy stopped buying plans.

Republicans did even more damage to the Affordable Care Act’s expansion of Medicaid. In 2012, the Supreme Court upheld most of the law against a constitutional challenge. But in that same decision, it effectively made the Medicaid expansion optional for states. In any state where Republicans had the power to block expansion, they did.

GOP opposition to Medicaid expansion has left millions of low-income people, mostly in the South, without insurance. Many of those states are also the ones where newly reformed private insurance markets have struggled because the Affordable Care Act’s design puts a lot of discretion in the hands of state officials. Where officials are ambivalent about or hostile to the law, as they have been in places like Tennessee and Iowa, the state markets have tended not to work well.

But it’s been a different story in states like California and Michigan, where officials have been enthusiastic and the markets have been stable. These are also the states that expanded Medicaid early and where, as a result, the number of people without insurance has fallen to the lowest levels.

The Impact Of The ACA On Finances ― And Health

Nationally, the number of people without insurance was at an all-time low when Obama left office. People who had asthma, diabetes or a history of cancer or heart disease finally had a way to buy comprehensive coverage, just like people in good health, with no markup for their preexisting conditions.

Even people paying more for their insurance had benefits, like a prohibition on annual or lifetime caps on payouts, that could save them from financial ruin if they were hit with a catastrophic illness or injury.

Insurance numbers alone don’t prove that the Affordable Care Act has been beneficial. But there’s now a large body of research that shows people have better access to care, are less likely to face financial distress from medical bills, and are probably healthier as a result.

That last part is important because, traditionally, it’s been the most difficult link for researchers to establish. And even now the evidence that the Affordable Care Act has improved health is far from definitive. But several studies point very strongly in that direction. 

Some found that previously uninsured people who gained coverage because of the Affordable Care Act were less likely to show up at the hospital with advanced, life-threatening versions of conditions like appendicitis and diverticulitis, most likely because they had sought care earlier. Others found that pregnant women who got coverage received better prenatal care, with health benefits for them and their babies. 

Yet another group of researchers focused exclusively on the Medicaid expansion and found that its beneficiaries were less likely to die from cardiovascular problems.

One of the most compelling pieces of research was a byproduct of federal efforts to boost insurance enrollment. In 2016 and early 2017, the Treasury Department identified 4.6 million people who hadn’t signed up for insurance and sent letters to 3.9 million of them. 

That set up a natural experiment, comparing those who got the letters from those who didn’t. Those who received letters signed up for coverage in higher numbers and, among middle-aged adults, they were less likely to die in the two years that followed. For every 1,648 people who got the letters, one extra person lived.

“Dozens of studies over the past six years, or even the full decade really, on the Affordable Care Act have shown that … the net effects are really positive,” Benjamin Sommers, a Harvard economist who conducted some of the most definitive research, said in an interview. “People can afford their care. People get better preventive care, more chronic disease care. They feel better and they live longer.” 

The Future Of The ACA

The letters in that Treasury Department study went out right before the Trump administration took over ― which is important because President Donald Trump began attacking the law on literally his first day in office.

Repealing the Affordable Care Act was a core promise of his 2016 presidential campaign and although efforts to pass repeal legislation failed (just barely), Trump has taken a number of budgetary and regulatory actions to further undermine the law.

The most blatant were a series of funding cuts to the advertising of HealthCare.gov, the federal website for people buying coverage on their own, as well as to groups that help individuals navigate that process. The most significant attack on the law may have been new regulations that allow insurers to sell “short-term” plans not subject to the Affordable Care Act’s insurance regulations.

These short-term plans can actually last up to three years (in theory), making them an alluring alternative to people who think plans compliant with Affordable Care Act standards are too expensive. But the short-term plans frequently aren’t available to people with preexisting conditions, lack key benefits and have huge out-of-pocket costs. Those out-of-pocket costs have, among other problems, made it difficult for coronavirus patients to pay their bills.

The Trump administration still isn’t done. Right now it’s supporting a lawsuit challenging the Affordable Care Act’s constitutionality. It’s a bonkers case that virtually nobody in the legal establishment takes seriously. But the Republican state officials who first brought the lawsuit have asked the courts to throw out the entire law and the Trump administration has endorsed that recommendation.

If that happens, 20 million people could lose coverage, according to projections from the Urban Institute.

The Supreme Court has agreed to take that case, whose central argument has already prevailed before some Republican-appointed judges in the lower courts, although the justices will not hear the dispute until their next term. And with the coronavirus threatening so many people, it’s hard to know what the legal, political and policy environment around health care will even look like nine months or a year from now, when the justices are expected to decide the case.

One possibility is that Democrats will emerge from the 2020 elections with unified control of the federal government, for the first time since 2010, and that they will make another run at health care reform ― if not to pursue the creation of a full-fledged Medicare for All system, with truly universal coverage and government control of prices, then at least to make some of the improvements they had hoped to make all along.

“We knew it was not perfect, that it had some problems,” Reid said of the Affordable Care Act. If Democrats get control of the government, he said he hopes they can start by undoing the damage Trump has done to the health care system and then add a public option.

Though Reid is no longer in office to work on such reforms, Pelosi is. She has said she thinks Medicare for All is not realistic, but she has endorsed making the insurance subsidies more generous, as California just did for its own residents.

For now, the focus of politics is the pandemic. And if it highlights the Affordable Care Act’s shortcomings, the law’s architects, like DeParle, say it also reinforces an idea that is part of the law’s core philosophy: that it makes sense to insure everybody because everybody is vulnerable. “It was important to get this foundation laid ― of everybody being in the system together,” she said.

When the pandemic ends, Obama, Pelosi and all of their allies may finally get a chance to have that celebratory event they’d originally planned for this week. 

It could be a long wait. But it’s been a long wait already. And sometimes that’s what it takes for a law’s impact to become clear.

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