September 26, 2013 - The Obamacare
that consumers will finally be able to sign up for next week is a long way from the health
plan President Barack Obama
first pitched to the nation.
Millions of low-income Americans won't receive coverage. Many workers at small businesses won't get a choice of insurance plans right away. Large employers won't need to provide insurance for another year. Far more states than expected won't run their own insurance marketplaces. And a growing number of workers won't get to keep their employer-provided coverage.
Every branch of the federal government played a role in weakening the law over the past three years, the casualty of a divisive legislative fight, a surprise Supreme Court ruling, a complex implementation and an unrelenting political opposition. The result has been a stark gap between the promise of Obamacare and the reality - one that has fueled a deep vein of skepticism about the law as it enters its most critical phase.
"Oh, I've heard of Obamacare, yes, but I didn't know all that was involved," said Cindy Bishop, a part-time worker from Lexington, Ky., who stopped by an Obamacare information booth at the state fair last month. "Everybody that I have ever talked to is totally against it. They're afraid all the doctors are going to pull out, and you're going to have to be like Canada and have to be on a waiting list."
Obama will take a lead role during the six-month enrollment period in trying to convert critics like Bishop. He doesn't expect to boost the subpar approval numbers, at least not in the near term. Democrats stopped anticipating a bump a long time ago when voters defied prediction after prediction that they would fall in love with Obamacare.
His best defense against Republican repeal efforts is a robust consumer response, and his best hope to soften years of public antipathy is a successful rollout. That's why Obama is asking millions of Americans to just give the law a chance - go to the Web, sign up for a health care plan starting Oct. 1 and claim a new benefit that's there for the taking on Jan. 1. It's also why Republicans are mounting such an aggressive last stand this week to revoke funding for the law.
The early hiccups may not matter in the long run if the Affordable Care Act survives Republican challenges and goes on to become an entitlement as popular as Social Security or Medicare and if the early gaps between hope and practice narrow as more states agree to expand Medicaid.
Administration officials said the regulatory delays won't have a significant impact on the overall implementation. And already, despite the unceasing GOP campaign to sink the law, Obamacare has exceeded expectations in some significant ways.
The growth rate for health care costs has slowed to its lowest level in decades, although experts dispute whether the recession or Obamacare should receive the credit.
More than 3.1 million young adults gained coverage because they could stay on their parents' insurance; 17 million children with pre-existing conditions can no longer be denied coverage; and insurers have been forced to issue more than $500 million in rebate checks to consumers because they failed to spend at least 80 percent of premiums on medical care.
"The Affordable Care Act has put historic consumer protections in place that have improved the quality and cost of health insurance and will soon provide a simple way for uninsured Americans and their families to shop for quality, affordable coverage in the health insurance marketplaces," White House spokeswoman Jessica Santillo said. "The landmark improvements to the health system are taking effect on time and are already helping make better coverage available at a more affordable price."
The broad pillars of Obamacare remain intact: the exchanges, the subsidies and the security of coverage for so many Americans who otherwise couldn't afford it. But in ways large and small, the changes to the law are making the reality of health reform more challenging.
Chief Justice John Roberts
handed the Obama administration an unexpected victory last year with his 5-4 opinion upholding the law. Less understood at the time: the dramatic consequences for his split-the-difference solution that a mandatory Medicaid
expansion must be an option for each state.The decision gave Republican governors another tool to derail the law. Only 25 states are expected to expand access to the program next year, leaving many of the poorest Americans with no insurance options.
"It's underappreciated how fundamentally the Supreme Court changed the law when it made Medicaid
a state option," said Drew Altman, president and chief executive officer of the Henry J. Kaiser Family Foundation. "The law that is being implemented is not really the law that passed the Congress."
The Congressional Budget Office estimated in 2010 that Obamacare would reach 32 million uninsured over a decade. Now only 25 million people are expected to get covered over the next decade.
As written, the law required states to expand the Medicaid
program to cover people who make up to 133 percent of the federal poverty level - or about $31,000 for a family of four. Now there will be a coverage gap for people who are too poor to qualify for federal subsidies to purchase insurance on the exchanges but not poor enough to access Medicaid
in states where governors refused to broaden the program.
In Texas, where Republican Gov. Rick Perry is one of the law's staunchest foes, that decision will have a wide-reaching impact, said David Lopez, president and CEO of The Harris Health System
in Houston, one of the nation's most uninsured cities.
Of the 1.5 million patients who visit his hospitals or clinics each year, about 400,000 would have qualified for Medicaid
payments if Perry had expanded the program, Lopez estimates. But now, nearby residents will be forced to pick up the tab.
"If we don't have Medicaid
expansion, the responsibility of the care of those individuals falls back to the local community," he said.
Obamacare supporters predict that Republican governors will eventually agree to widen Medicaid
access. In the past week alone, Pennsylvania Gov. Tom Corbett and Michigan Gov. Rick Snyder took steps in that direction.
Republicans haven't even gotten close to repealing Obamacare - Democrats insist they never will. But they've made the law exponentially tougher to implement than the White House anticipated.
The extent of the challenge became clear soon after Obama wrapped up the East Room signing ceremony in March 2010.
White House aides quickly got to work on a technical corrections bill to clean up messy language in law. They assumed Congress, as it has done so many times in the past, would send it through. Republicans refused - and that cemented flaws in the law that continue to cause problems.
For instance, workers can opt out of their employer insurance - and go on the exchange - if their share of the premium is more than 9.5 percent of their household income. But the law calculates that based on the worker's premium, not the whole family's. Advocates of the law have dubbed that "the family glitch" - one that will limit coverage.
Congressional Democrats had also assumed that most governors, particularly Republicans who consider local control a core party philosophy, would set up and run their own state-based exchanges. Drafters of the law didn't even add the federal backstop until late in the legislative process.
But only 16 states and the District of Columbia decided to take the lead. Six others are partnering with the federal government. The federal government will run insurance exchanges by itself in the other 28 states.
"I didn't support Obamacare, but it is the law of the land," New Mexico Gov. Susana Martinez, a Republican, said in March when she signed a bill to set up an exchange, which later was converted to a state-federal partnership for 2014. "My job is to implement this law in a way that best serves New Mexicans."
The disparity adds another layer of confusion to the rollout. A recent Pew Research Center survey found consumer awareness about the exchanges is much lower in states that have deferred to the federal government. Only 44 percent of people in those states said they'd have access to an exchange versus 59 percent in places with state-based exchanges or state-federal partnerships.
"Everyone knew it was complex," said Alan Weil, executive director of the National Academy for State Health Policy. But as the law is actually put into practice, "you see more complexity than anyone thought when the law was passed."
Despite more than three years of Republican efforts to stop Obamacare, the vast majority of changes to it have come from the Obama administration.
The White House delayed the employer mandate for at least a year to allow time to sort out the complicated reporting requirements. The administration also decided that the CLASS Act - a long-term care program championed by the late Sen. Ted Kennedy - was financially unsustainable.
A consumer protection - the limit on out-of-pocket health costs for individuals - was pushed back to 2015 after the administration heard that insurers and employers needed more time to comply. And in most states, workers at small businesses will have only one plan to choose from in the health exchanges next year, not the multiple choices they were supposed to have.
The West Wing doesn't apologize for the delays. Aides said the president has made clear to his staff that if something isn't working well, they should pull back on it until the kinks are worked out.But they've taken a hit for that approach. Republicans have rallied around the delays and changes as signs that the entire law is going to crumple eventually.
"The Democrats were wrong on the law in terms of what it was going to do for the cost of care, and they were wrong on the law in terms of people's opinions of it," said Sen. John Barrasso (R-Wyo.), one of the Senate's leading critics of the law. "It was bad policy and bad politics. They got it wrong on all accounts."
During the run-up to the health law, Obama frequently touted the Cleveland Clinic as a model for the health system: "They actually provide great care cheaper than average," he repeated at an October 2012 debate with former Massachusetts Gov. Mitt Romney.
But as full implementation approaches on Jan. 1, 2014, clinic leaders say the government - through Obamacare's cuts in hospital payments, Ohio's refusal to expand Medicaid
and sequestration - is removing significant funding from the health system very quickly. And last week, the clinic announced it was cutting $300 million from its budget and laying off workers.
"We know we're going to get paid significantly less," said Dr. Delos Cosgrove, the CEO and president. "This is not just Cleveland Clinic. This is every CEO that I've talked with across the country."
Throughout the nation, health industry leaders say the law had some good goals of expanding access, but it's far from perfect. Those views are coming into sharper focus now, just weeks ahead of when people can begin to sign up.Obama promised during the health care fight that people who liked their employer-provided coverage would be able to keep it.
But several large employers have announced plans to curtail employer coverage, particularly for part-time workers. Grocery chain Trader Joe's said this month that it wouldn't provide insurance to part-time employees because they could get a better deal on the exchange.
Opponents of the law also cite widespread concern that even if consumers can keep their plans, they might have to switch physicians or networks.
Democrats say that nothing in the law requires employers to drop coverage and that some employers are making these changes independent of Obamacare. But Republicans have jumped on each employer announcement with warnings that Obama is not living up to that promise - and that eventually, few employers will provide insurance.
In Kentucky, even the law's supporters are worried about that possibility.
"I think it's going to be a good thing," Louisville resident Becky Denton told POLITICO after visiting the state booth promoting the health exchange. "It's going to have to be tweaked. I'm sure there's - like all this stuff with the small employers."
Turning to her friend, Denton cited a front-page story in the local Courier-Journal: "Did you see this morning that UPS is dropping the spouses off policies because of Obamacare?"
Still, many health experts such as Cosgrove say the health system needs to cut costs - and that Obamacare is a good start to revamping the health system.
"We clearly needed a change. The law is not perfect. I don't think there's ever been a perfect law," he said. "But we will see some things that will go very, very well and other things that will be less than anticipated."