Wayne O'Leary

American Rescue Plan Rescues Obamacare

Like Arnold Schwarzenegger’s “Terminator,” the Affordable Care Act (ACA), or Obamacare, just won’t die. What critics have justifiably called a kludge (dictionary definition: a system made up of poorly matched components) just keeps enduring against all logic. And now, the Biden stimulus package, formally enacted as the American Rescue Plan Act, has guaranteed its survival for at least another two years.

In truth, the ACA, created in 2010, should have expired on numerous occasions, either through congressional action — Republicans tried to repeal it 60 times — or by Supreme Court invalidation. It’s never been universally loved; both progressives and conservatives dislike the law or aspects of it. In that sense, it’s nothing like Medicare, which has always enjoyed near-unanimous approval since its inception a half-century ago.

By contrast, Obamacare stumbled out of the gate and just kept on stumbling in terms of popularity. Annual Gallup polls recorded steady disapproval of the ACA over most of its first decade in existence; it averaged less than a 43% positive rating through 2016 and only reached 50% in public acceptance during the Trump years, when it hovered between 50% and 52%.

The latest extensive Gallup opinion sampling, taken Nov. 5-19, 2020, puts public support for Obamacare at barely 55%. (If the ACA grows on people, as advocates claim, it grows very slowly.) Significantly, two-thirds of those approving the law, including 59% of Democrats, still want substantial changes made to it; their support is definitely conditional.

There are good reasons for this muted endorsement, which were elucidated in a series of illuminating New York Times articles by Margot Sanger-Katz and others in 2017 and again in 2020 on the ACA’s 10th anniversary. Looking at both Obamacare’s successes and failures, Times analysts reiterated what cannot be denied, that the law did some demonstrably good things.

To begin with, it expanded coverage, so that an estimated 20 million more people now have health insurance than a decade ago, cutting the overall number of uninsured Americans by about two-fifths. Most of this increase was accomplished by expanding Medicaid, an added positive because it enhanced the health of the poor and working poor.

Other worthwhile ACA features include its mandate that the employer-based private health plans covering 160 million Americans must eliminate any annual and lifetime monetary-reimbursement caps and cover the children of workers up to age 26. Finally, there’s the ACA regulation (which could probably have been promulgated by stand-alone legislation) that insurance companies can’t deny policies to those with preexisting health conditions or charge excessive prices for them; it’s easily the law’s most popular characteristic.

That’s about it so far as Obamacare positives are concerned. Now, the bad news, as Times reviewers see it. ACA marketplace policies remain very expensive on average; their premiums are higher than those of typical employer plans and have risen steadily since 2014, up two-thirds (minus subsidies) for mid-level coverage in just six years. Offsetting federal subsidies, which are income-based, don’t apply to middle-class individuals, who are also ineligible for Medicaid. For them, Obamacare exchange premiums are unaffordable. Worse, deductible levels, set by the insurers, are totally out of line to the point that many ACA policyholders can’t afford to use their purported coverage.

There are additional problems with the Obamacare kludge. For one thing, it’s failed to achieve universality; the percentage of uninsured has stalled out at around 13% and has actually trended upward over the last three years. For another, the 2012 Supreme Court decision making Medicaid expansion optional for the 50 states has allowed 14 of them to reinforce the ACA’s patchwork character by refusing to expand their programs.

Then, too, the ACA has remained the opposite of user-friendly. There are chronic difficulties in establishing eligibility, too much paperwork, and little help in selecting a marketplace plan. Above all, the ACA exchanges present the same problem as privatized Medicare Advantage: the aggravating, time-consuming need to “shop around” each year for a new plan, in order to obtain the least expensive and most suitable coverage as insurers drop in and out of the exchanges, change their plans and networks, or eliminate providers.

This catalogue of horribles, exacerbated by the negative health impact of the pandemic, has spurred renewed public interest in a government-run Medicare for All system; that, in turn, has caused the so-called ACA stakeholders (insurers, hospital chains, doctors, corporate employers) to marshal their forces and defend their turf. Those special interests, especially the insurance companies, have done really well under Barack Obama’s free-market health reform. Private insurers have profited from an enlarged captive customer base, the ability to raise ACA premiums and deductibles while limiting provider networks, and the lucrative sideline of managing expanded Medicaid programs for state governments.

In February, the Obamacare stakeholders coalesced to back the Biden administration’s commitment to expand private health insurance and work incrementally toward universal coverage by “building on the ACA,” a commitment that found expression in a financial fix for Obamacare buried deep in the recently enacted $1.9 trillion economic stimulus. A coalition of eight organizations, led by America’s Health Insurance Plans (AHIP), lobbied heavily for the American Rescue Plan and will be rewarded with billions in indirect corporate welfare over the next two years and a continuation of health-care business as usual.

The ACA fix removes the cap on annual income ($87,000 for a family of three) that had restricted eligibility to receive government health-insurance subsidies, thereby allowing upper-middle-class Americans to qualify for reduced Obamacare exchange rates. It also increases subsidy levels across the board and establishes a ceiling (8.5% of income) on what enrollees can be charged in monthly marketplace premiums. These changes, says the Congressional Budget Office, should cover an additional 1.3 million uninsured Americans for the next two years, but at a cost of $34 billion (speaking of subsidies), paid indirectly by the taxpayers to private health insurers.

Joe Biden, wedded to the ACA he helped pass a decade ago, wants to make his sunsetted program fix permanent, but the prohibitive cost of private insurance may make that unrealistic. Meanwhile, there’s the Pew Research Center poll of September last year indicating a majority of Americans want the federal government made responsible for providing health insurance, with over a third, including 54% of Democrats, favoring single-payer. The issue’s far from settled.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, May 1, 2021

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