Insurers in Limbo After Republicans Misfire on Repeal
Obamacare, as the Affordable Care Act is often called, is both the law of the land in the U.S. and in a kind of limbo. Signed into law in 2010, it took full effect in late 2013. It has succeeded in lowering the number of uninsured Americans sharply, even as it became the focus of Republican opposition to President Barack Obama. Under his successor, Donald Trump, House Republicans on their second try passed a “repeal and replace” bill, the American Health Care Act. But it faced united opposition from Democrats, exposed deep rifts among Republicans and was regarded by most of the public unfavorably. Republicans in the Senate are trying to write their own bill and are having a hard time finding one that can bridge the requirements of conservatives and moderates in the Senate. Meanwhile, the insurers whose participation could make or break the ACA or a replacement are watching nervously from the sidelines.
Here's what the law has and hasn’t done to meet its sweeping goals: Coverage: Obama has said that 20 million previously uninsured people gained coverage through the health exchanges created under the ACA, its expansion of Medicaid and a related children’s program and through a provision allowing young adults to stay on their parents’ plan. Surveys have found that the uninsured rate has fallen roughly by half to under 10 percent. New signups: Nationwide, 12.2 million people signed up for individual policies for 2017, down from 12.7 million for the year before. Cost of coverage: The average premium for Obamacare plans in 2017 is up by roughly 22 percent on average over the year before, to about $300 a month for a benchmark silver-level plan. But about 77 percent of current enrollees are estimated to be able to find ACA plans for less than $100 a month, once subsidies are taken into account. And premiums for family plans offered through employers — a far larger group — rose only about 3 percent in 2016, though consumers had to bear more of the costs of care. Competition: Insurers' decision to quit Obamacare mean are leading to limited options for consumers — or none at all — in many markets. Some of the biggest for-profit companies have quit the health law's exchanges after racking up big losses, including UnitedHealth Group Inc., Aetna Inc. and Humana Inc. Legislation: The bill pushed through the House by Speaker Paul Ryan would scrap most of the ACA’s taxes, gradually undo Obamacare’s expansion of Medicaid and would give states the option of allowing insurers to charge more for pre-existing conditions. The Medicaid cuts and changes to the tax credit system were the main reasons the Congressional Budget Office estimated that the plan would cover 23 million fewer Americans in 2026 than the ACA.
The dilemma in shaping Obamacare was how to preserve the country’s system of employer-based insurance for the bulk of the population while ensuring access to coverage for people too sick or poor to afford it. Making it work required a combination of subsidies for middle-income workers, increased spending on Medicaid to cover more low-wage workers, and the so-called individual mandate — the unpopular requirement that all Americans obtain insurance or pay a fine — to make sure the insurance exchanges for individual policies had enough healthy customers to balance out the cost of sicker ones. Working through private companies reduced disruption and kept the insurance industry on board, but also meant the plan did not have the kind of powerful tools used to hold down costs in countries with government-run systems.
Democrats saw the Republican's struggle to pass Ryan’s bill as proof that the country has accepted the idea that the government should intervene in insurance markets to promote universal health coverage. Even Ryan's bill, they said, retained much of the ACA’s core. Conservative Republicans said that's what they didn't like about it. Moderate Republicans said they didn’t like the fact that so many people would lose their coverage. Democrats worry that in the meantime Trump will undermine the system to force his prediction of the ACA’s doom to come true.
The Reference Shelf
- The Congressional Budget Office’s report on the version of the American Health Care Act passed by the House.
- The September 2016 report from the U.S. Census Bureau on health care coverage in the U.S.
- Positions on health care on the Trump and Paul Ryan websites.
- The Kaiser Family Foundation is tracking insurer participation in the ACA’s exchanges.
- McKinsey & Co. also tracks insurers’ rate filings.
- Blogger Charles Gaba estimates Affordable Care Act enrollment and tracks updated enrollment announcements by states and the federal government.
First published Nov. 14, 2014
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