“...That’s what the Affordable Care Act is all about. It’s about filling the gaps in employer-based care so that when we lose a job, or go back to school, or start that new business, we’ll still have coverage. Nearly eighteen million have gained coverage so far. Health care inflation has slowed. And our businesses have created jobs every single month since it became law.”
The Republican counter to the President’s address, offered by South Carolina Governor Nikki Haley, gave short shrift to Obamacare, briefly mentioning it (although not by name) as one of the changes that would come if Republicans held the White House:
“We would end a disastrous health care program, and replace it with reforms that lowered costs and actually let you keep your doctor.”
I know that most people have made up their minds about Obamacare and aren’t likely to be persuaded by data and evidence offered by one side or the other. Yet Obamacare is going to be one of the top issues in the 2016 election, despite the little attention given to it last night. It’s present and future shouldn’t be based on partisan talking points, but on a factual, evidence-based assessment of what we now know about its impact. Otherwise, how will we know what is working, what isn’t and what should be changed?
Fortunately, there is a growing body of solid evidence available on its impact on jobs, access, costs, and quality. Most of it does not support the “Obamacare is disastrous” meme offered by its critics; rather, recent studies suggest that the law has helped improve access to care for millions. Yet the trend to high deductible plans is worrisome. This is what we know:
1. Has Obamacare resulted in job losses, forced people into part-time jobs, and discouraged people from working?
The evidence so far suggests that none of these predicted adverse impacts has occurred.
The Washington Post reports that “During the debate over President Obama's signature health-care law, opponents warned that the law would discourage large numbers of Americans from working, force millions into part-time jobs and make it more difficult to find work. Three new studies released this week suggest that, so far, it hasn't happened.” One of the studies, the Post observes, looked at “whether employees have chosen to work less in order to qualify for Medicaid, which became available to a larger group of people under health reform. The new research on the effects of the Medicaid expansion does not suggest that people are looking to limit their earnings. On the contrary, some might even be looking to work more.”
Bloomberg New’s Editor-in-Chief Matthew Winkler reports that the ACA has had a “benign” impact on the economy:
“The [U.S. economy’s] investment boom continues unabated after an estimated 17.6 million Americans gained some form of health-insurance coverage following enactment of the Affordable Care Act in March 2010. Instead of being the economic catastrophe predicted by congressional Republicans, all of whom voted against it, Obamacare proved benign for U.S. business and healthcare companies delivered the best total return (income and appreciation) of any industry since October 2013, when the law took effect for most people, according to Bloomberg data.”
2. Has Obamacare reduced the number of uninsured and increased access to care?
It is now an indisputable fact that the ACA has reduced the numbers of uninsured person. The U.S. Census Bureau found, “In 2014, the percentage of people without health insurance coverage for the entire calendar year was 10.4 percent, or 33.0 million, lower than the rate and number of uninsured in 2013 (13.3 percent or 41.8 million). Between 2008 and 2013, the uninsured rate was relatively stable. In 2014, the uninsured rate sharply decreased, which was the largest change in the uninsured rate throughout this period.” The Commonwealth Fund reports that the uninsured rate dropped in every U.S. state and the District of Columbia—with the biggest gains in coverage coming from states that expanded Medicaid.
Yet some ACA critics, while conceding there are fewer uninsured, argue that access has not necessarily improved because the coverage they get is inadequate, especially for those enrolled in Medicaid. But we now have a growing body of evidence that as people have gained coverage, including for those enrolled in Medicaid, barriers to access are falling as a result:
The LA Time’s Noam Levy reports that “states' Medicaid expansions through the Affordable Care Act are helping low-income patients access medical care and improving hospitals' bottom lines, according to two new studies that add to growing evidence about the benefits of the health law. Fewer low-income residents of Kentucky and Arkansas, two poor states that expanded Medicaid in 2014, reported problems paying medical bills after the coverage expansions, especially compared with residents of Texas, which has rejected the health law. And hospitals in Medicaid expansion states saw a marked decline in the share of patients without insurance compared with hospitals in states that have not broadened access to Medicaid, a second study found.”
And the same Commonwealth Fund study discussed earlier found that the ACA has reduced cost barriers to patients obtaining needed care. “Many people with no or inadequate insurance coverage skip needed care or struggle to pay medical bills. One of the central aims of the ACA is to improve access to care by removing financial barriers. From 2013 to 2014, the share of adults (age 18 and older) who said they went without care because of costs declined by at least two percentage points in 21 states. This is likely a result of expanded insurance coverage as well as improvements in the economy.”
3. Is Obamacare driving up premiums?
The evidence suggests that on average, employer-based premium increases have been very modest since Obamacare became law, especially compared to the norm 10 years ago. A survey of 2000 large and small employers conducted by the Kaiser Family finds that premiums for employer-based family coverage in 2015 increased by an average of 4 percent. The survey, which is conducted annually, also provides historical context for the current premium increase. From 1999 to 2005, the average annual premium for family coverage increased by 11% per year, slowed to 5% in 2005 to 2010, and has remained at 5% from 2010 (the year Obamacare became law) through 2015.
Another report from the Kaiser Family Foundation reports that there is considerable volatility in the premiums charged for health plans offered through the ACA’s health insurance marketplaces, with “the percent change from last year in the benchmark [silver plan] premium ranges from -10.6% in Seattle, Washington to 38.4% in Nashville, TN. The simple average of these rate changes is 10.1% before accounting for the premium tax credit.” After the tax credits subsidy is included, though, a typical 40-year old non-smoker making $30,000 a year would be able to find a marketplace plan in 2016 that costs him slightly less out-of-pocket than in 2015, with a weighted average reduction of 0.7%.
4. Is healthcare becoming unaffordable because of high deductible plans?
Deductibles, co-payments, and co-insurance for health plans offered by employers have been going up for a long time now, well before Obamacare became law. But deductibles are continuing to increase even with the ACA capping total out-of-pocket expenses. The ACA limits the maximum amount that people have to pay out-of-pocket, yet even with the limits, high cost-sharing plans may still result in expenses that make healthcare unaffordable for many. In 2016, total out-of-pocket costs (deductibles for qualified health plans, whether offered by employers or through the law’s health insurance marketplaces, are capped at $6,850 for individuals and $13,700 for families. The law also requires qualified health plans to offer coverage for preventive services that receive an A or B rating from the U.S. Preventive Services Task Force at no out-of-pocket cost to the insured. The Kaiser Family Foundation’s employer survey reports that since 2010, “deductibles for all workers have risen almost three times as fast as premiums and about seven times as fast as wages and inflation.”
My take on all of this is that Affordable Care Act has done a lot of good for a lot of people, and the “Obamacare is disastrous” meme just isn’t supported by the facts and evidence.
Obamacare hasn’t wrecked the economy, caused job losses, or forced people into part-time work. The ACA has provided coverage to more than 10 million people who otherwise would have gone without it, driving down the uninsured rate to unprecedented lows. Those who have gotten coverage have better access to health care as a result of it, including the millions who became eligible for Medicaid. Premiums in plans offered by employers aren’t skyrocketing, and in fact, have increased modestly and by considerably less than the annual double-digit increases seen 10 years ago. Premiums in the ACA’s marketplace plans have been more volatile and variable, yet most people can still find a plan with an affordable premium once tax credit subsidies are taken into account.
I realize that the data I cited above doesn’t describe everyone’s experience with the ACA. For sure, there are some employers who raised their premiums by much more than the average of 4% in 2016. Yes, there are some employers who may have cut back the hours of their employees. Studies can only inform us about what the average, or typical experience, has been. Much of the opposition to the ACA, I think, comes from people whose experiences aren’t the typical ones, who saw their hours cut, or their premiums go up, or heard about people that had such experiences, and they conclude from this, not unreasonably, that this is the case for everyone else. Such stories provide a powerful narrative to politicians who oppose the ACA. Yet there is another powerful narrative, the stories of millions of Americans who, because of the ACA, have access to affordable healthcare.
My biggest worry is that the continued growth of high deductible plans will make health care unaffordable for too many, even with the ACA’s limits on total out-of-pocket costs and coverage of preventive services. Obamacare didn’t create the high deductible problem, but it didn’t solve it either.
In an ideal world, I would love to see candidates and political parties, Republican and Democrat, agree to keep the many things about Obamacare that are working, while making improvements to address the problems created by high deductible plans, narrow networks, and other shortcomings that the law didn’t address or make better. Not that I expect that to happen anytime soon, of course.
Today’s question: What is your reaction to the evidence on Obamacare’s impact?
