It’s nearly impossible to overstate how awful the rollout of the Affordable Care Act (ACA) health insurance exchanges has been.
If you’re in need of an example, look to Oregon — a state that essentially did everything right.
The Beaver State expanded Medicaid to those earning up to 138 percent of the poverty level — a decision that’s already helped the state reduce its uninsured population by more than 10 percent — and they built their own exchange, as the law intended. And how many Oregonians has the online exchange signed up?
“The state has resorted to hiring or reassigning 400 people to process insurance applications by hand,” The Associated Press’ Jonathan J. Cooper reports.
This helps explain why liberal hero Senator Jeff Merkley (D-OR) is co-sponsoring a bill that would let those who have had their insurance canceled keep their plans, even though experts say such legislation would dull the effects of reform and possibly end up raising premiums.
The disastrous launch of the exchanges should have been easy to predict in retrospect. Federal and state governments are notoriously bad at information technology, Republican states rejected building their exchanges as part of a conspiracy to undo the law and any problem with the sites was bound to be fodder for a right wing set on destroying the law.
Perhaps the administration had been lulled into complacency by the seamless rollout of the law’s initial benefits. The Medicare donut hole closed, approximately three million children and young adults were allowed to stay on their parents’ insurance until age 26, free preventive care was added to every plan in the nation. All of these things went into effect without any evident drama. Or maybe they just had too much faith in their competence. Regardless, they’re in a mess that only they can get themselves out of.
Emboldened Republicans are certain that furor about cancelations will be followed by a furor about premiums, then people losing their doctors, though there’s not much evidence that rate shock will be widespread or the vast majority of insured Americans will see any noticeable difference to their care at all. Still, the right-wing attack machine is preparing to make sure the media focuses on the negatives of the law. And right now, that isn’t a difficult task.
Soon, if the exchanges can begin to function the way California’s already is, the benefits of the law and the way it has already transformed America’s health care system will be more obvious. Until that happens, here’s a reminder of five ways Obamacare is already changing America’s health care system for the better.
Growth Of Health Care Costs Hits New Low
America’s long-term deficit problem is effectively a health-care-costs problem.
The fact that we spend more on health care than any country in the industrialized world eats up a sizable chunk of the federal budget and our economy. If we could reduce that 17.9 percent of our Gross Domestic Product (GDP) that we spend on health care to the 12 percent of GDP Switzerland and the Netherlands devote to health care, that would free up $1 trillion a year, President Bill Clinton recently noted.
Since the Affordable Care Act became law in 2010, something extraordinary has happened — the growth of health care costs has slowed, and slowed to the lowest growth since it was first tracked in 1965. While the ACA has implemented cost-saving measures on the private insurance market, which began when the economy was at its worst and have continued as it has improved, it’s difficult to credit the law entirely for controlling costs for private coverage.
However, the slowed growth of costs of Medicare and Medicaid, as shown in the chart from the White House Council of Economic Advisers above, can certainly be attributed to the law’s reforms, especially newly implemented fines in Medicare for hospital readmissions within 30 days of release.
If the trend had gone the other way, Obamcare certainly would have been blamed.
Controlling these costs is crucial as millions of Baby Boomers retire and rely on both programs. It also means that as a nation we’re paying less for health care than we would have without the ACA.
The End Of Discrimination Against The Sick
The most transformative reform in the ACA is the end of discrimination against Americans with pre-existing conditions.
HealthInsurance.org’s Harold Pollack took a look at the National Health and Nutrition Examination Survey (NHANES) and found that “1.8 million uninsured people have received a previous cancer diagnosis. More than 2.8 million have been diagnosed with diabetes. Altogether, more than 5.7 million have been diagnosed with these ailments, or stroke, emphysema, heart failure, and similarly serious conditions.”
He estimates that another nearly five million suffer from “chronic bronchitis, active asthma, liver, and thyroid conditions.”
These approximately 10 million Americans are most in need of care and until Obamacare, they were effectively denied or priced out of the health insurance market. Millions more Americans with similar conditions were indentured to their jobs for fear of never being able to find insurance if they lost coverage from their employers.
Eclectablog‘s Amy Lynn Smith is an example of one of the law’s huge winners. A freelance writer with diabetes, Smith received a cancelation notice for her current plan. She went to Healthcare.gov:
Under my current insurance plan, I’m paying $1,400 a month for coverage. Yes, it’s comprehensive. At that price, it had better be. But my rates had been going up by $100 a month annually in the last few years and, as a self-employed woman with a pre-existing condition, I didn’t have a lot of choices.
Starting January 1, I’ll be paying $530 a month for almost identical coverage. Actually, my annual deductible is less — $150 instead of $250. My prescription co-pay will be just a tad higher, but that still won’t bring me anywhere near what I’m paying per month now. The cost to see a doctor is just about the same if I stay in-network, and the nationwide network is huge. All the other benefits are comparable, with the added bonus of programs to help me better manage my diabetes. Plus, I can keep every single one of my doctors.
Millions of Americans in the private insurance market are being forced to pick new plans due to the ACA, but millions of Americans lost their insurance every year before the ACA. Having to pick a new plan is stressful but does it compare to the stress that the 10 million seriously ill uninsured Americans have lived with until this law ended the ability of insurance companies to cherrypick the healthy while the sick suffered?
More Than Ten Million Of Those Currently Insured Are Eligible For Subsidies
There are about four million Americans in the private insurance market who will likely pay more for the health insurance they currently have, according to a new study from Families USA.
For them, the cost-saving benefits and the end of discrimination against the sick will be likely little comfort. The protection from substandard plans, the limits on out-of-pocket costs and free preventive care probably won’t provide much solace to those who have had their plans canceled and now find themselves with higher premiums. Many lost plans that didn’t cover much, but a good number of the plans canceled by insurers were generous policies that companies did not want to offer to those with pre-existing conditions. These four million Americans, who nearly all earn over 400 percent of the poverty level, are the ACA “losers.” And until Healthcare.gov and the other exchanges work well, you’ll be hearing a lot about them.
However, 71 percent of the current private insurance market — an estimated 10.8 million people — will be winners. They’ll receive either entirely subsidized coverage through Medicaid or subsidies that help them afford insurance that’s as good as or better than what they currently have.
Millions more who currently don’t have insurance at all will get it, possibly for the first time in their lives. A recent study in Oregon showed that being covered has nearly immediate benefits on mental health and financial stability. Meanwhile, the vast majority of the public — who are insured through their employers — will likely notice almost no change in their coverage at all.
If the trends reverse and Obamacare begins to become popular, it will be because those who benefit from the law outnumber those who are being asked to pay more for what they have.
Photo: Andrew Bain via Flickr
Holding Insurance Companies Accountable
One of the ACA’s most direct benefits to consumers is the so-called “80/20 rule,” which, for the first time, requires insurance companies to spend at least 80 percent of the premiums they take in on care.
“Consumers benefit from the 80/20 rule in two ways,” the Centers for Medicare and Medicaid Services reports. “First, they benefit upfront because insurance companies now keep premiums lower and operate more efficiently in order to meet the 80/20 rule. And second, if an insurance company doesn’t meet the 80/20 rule, then the consumer benefits by receiving a rebate for the amount that exceeds this threshold.”
The government estimated that in 2012, 77.8 million consumers saved $3.4 billion upfront on their premiums due to the 80/20 rule and other Affordable Care Act cost-saving measures. Many Americans saw the benefit directly. In the first year the law was in place, insurers had to send out $1.1 billion in rebates. The next year, 2012, that number had dropped to $500 million, as insurers reduced overhead. The average rebate was $100 a family.
Photo: StacyA via Flickr
We’re Now More Aware Of How Broken Our Health Care System Was
You probably heard about the Florida woman who was featured on CBS News when her insurance was suddenly canceled and she was forced to pay more for coverage. After a little digging, journalists discovered that she was essentially paying $54 a month to be uninsured.
America’s health care system currently subsidizes employer-provided insurance even for the rich. While those who buy their own insurance do get some tax breaks, they often pay for plans that they rarely keep for more than two years. Often they don’t find out how limited their coverage is until they get sick.
And that’s life for the uninsured. Experts have found that 26,000-45,000 Americans die every year for a lack of insurance.
Private insurers seem to recognize that the ACA was likely the last attempt to fix the health care system of the only country in the industrial world without universal health care. If this doesn’t work, the arguments for a fully nationalized system only get stronger.
To avoid even more limits and regulations on its business, the insurance industry is doing its best to make the ACA work, according to the Los Angeles Times‘ Noam Levey:
But since 2010, they have invested billions of dollars to overhaul their businesses, design new insurance plans and physician practices and develop better ways to monitor quality and control costs.
Few industry leaders want to go back to a system that most had concluded was failing, as costs skyrocketed and the ranks of the uninsured swelled.
Nor do they see much that is promising from the law’s Republican critics. The GOP has focused on repealing Obamacare, but has devoted less energy to developing a replacement.
Healthcare industry officials generally view several GOP proposals, such as limiting coverage for the poor and scuttling new insurance marketplaces created by the law, as more damaging than helpful.
The successes of the Affordable Care Act are currently and justifiably drowned out by the failures of the exchanges. But if that changes, Americans — or at least those who are opposed to anything President Obama does — will have to be glad that the opponents of the law have lost, again.
Photo: Will1ill via Flickr