Early in 2013, the Congressional Budget Office estimated that seven million people would enroll for coverage through ObamaCare exchanges in 2014. To hit that number, three million enrollees seemed the minimum marker for the first day of January. With just six people making it through the system on October 1, and barely 100,000 by the end of November, the ACA roll out appeared to be in deep trouble.
That was the theme of our early November report. The Healthcare.gov website had crashed in spectacular fashion, sufficient in explosive brightness to obscure the Republican-led debacle of a sixteen-day federal government shutdown in October. People couldn’t enroll as promised in the ACA. Moreover, the actions of insurance companies conforming to basic benefits standards mandated by the ACA resulted in the cancellation of several million less-than-adequate policies.
Mind you, Medicare and Medicaid benefits for roughly 100 million Americans stayed in effect. The one hundred and sixty million people with employer-sponsored coverage weren’t affected at all. The vast majority of people purchasing insurance policies in the open market before the ACA took effect were able to keep those policies moving forward, and the canceled insurance policies were often fundamentally inadequate in providing effective coverage. Note also that a large subset of purchasers whose policies were canceled, once they successfully navigated the ACA enrollment maze, found better coverage at far less cost, especially when ACA-related tax subsidies were applied. Still, some enrollees found that real coverage would cost more than the plans which they could no longer buy. For this, Obama-Care, once again, became an easy target for all frustrations with the health care system in the United States.
After years of unsuccessful efforts to defeat ObamaCare, with the President’s 2012 reelection over Mitt Romney’s promised first-day repeal the ultimate test, Republicans finally found a narrative with political bite.
During the debates leading up to passage of the law, the President, reading the clear history of the failed Clinton Health Security debate of 1993-94, made a sound-bite promise to the American people. Despite all of health care’s problems, the Clinton initiative demonstrated that people are overwhelmingly risk averse when it comes to their existing insurance. As one pundit commented, in the nineties debate about competing visions for change, everyone’s second choice was to do nothing.
Obama learned the lesson and uttered the now famous line, “Under the ACA, if you like your current coverage, you can keep it.”
Well, not exactly, especially if it’s crummy coverage. Or maybe your current plan doesn’t meet the technical requirements of the new law, but a better plan is available. If you are on Medicare, Medicaid, or have employer coverage, you are okay. But still the President’s sound bite wasn’t true. We’ll let historians reflect on the self-satisfaction of Republicans that Barack Obama has opened himself to the cynicism which they saw in Democratic exploitation of President George W. Bush’s failed WMD claims or his “mission accomplished” moment. Hope -and-Change Obama could finally be caricatured as Washington’s latest Pinocchio.
The daily and anecdotal stories finally took their toll in the monthly polls which have provided our objective scorecard over the four years of this series. The Kaiser Family Foundation’s Health Tracking Poll for November reported the effects of the roll-out debacle. The theme of our earlier reporting was how remarkably stable opinion had remained throughout the ObamaCare creation saga. Month after month, the favorable view of the ACA trailed the unfavorable view by three, sometimes four, percentage points. While the nominal reports would float up or down by several points, reflecting growth or decline in the undecided category, the division between positive or negative remained clustered.
Many, especially among the uninsured, were less informed. Partisan affiliation was the strongest predictor of attitude. Repeal/replace was closely related to improve/expand. Cutting government subsidies never scored favorably.
While this familiar overall pattern remained the basis for the November report, the numbers moved dramatically. September’s favorable number had been 39%. November’s favorable dropped to 34%. Conversely, September’s 43% unfavorable jumped up to 48% in November. Support among Democrats plummeted from the mid-70s to 55%. Support among independent voters dropped from the 40s to 33%. The meager 12% of Republicans who supported the law in September declined to 7% by November.
For the first time in the ObamaCare debate, the daily flow of events and reports from Washington translated into a fundamental shift in opposition and support among the American people.
December’s Kaiser poll showed a bounce-back among Democrats to 68% support, but further declines among independents, from 33% favorable down to 28%. When poll analysts stripped away the views of self-reported independents but who were also Republican- or Democratic-leaning voters, the residual “pure independent” category opposed the ACA 52%-25%. Also, the previously dependable gender gap in support of the law among women had disappeared in the December numbers.
While the story of early October was the Republican-led shutdown failure, the late October / early November headline was the Healthcare.gov fiasco. December was then dominated by the modest bipartisan, post-sequester budget agreement, but the underlying attitudes among voters shifted solidly in a negative direction during the final months of 2013.
Our saga has, however, been a study in contrasts. And while the news was generally negative, January 1, 2014, marked a seminal date in the transformation of America’s health care system. Whatever the ebb and flow of opinion and the resultant shifts in political debate, the insurance world changed fundamentally as the ACA became law.
Prior to January 1, 2014, during years of both political and analytical health care speeches, one of my dependable opening lines was that “Rule Number One at insurance school” was that the best way to make money in the insurance business was to cover healthy people. The underlying imperative of the insurance market was to reduce the likelihood of enrolling high-cost patients. A good friend and respected leader once won accolades for turning around the financial fortunes of a major national insurance company. To his friends in the health care world, he extolled the sophisticated management he had brought to the task. To the Wall Street Journal he admitted, “I got rid of the bad risks.”
But after January 1, insurance policies could no longer exclude patients because of their preexisting conditions. Policies could not enforce a lifetime limit on total benefit costs. Apply these change to the twenty-eight-year-old woman, between jobs, diagnosed with an auto-immune disorder. Contemplate the change for the parents of a newborn in a neonatal intensive care unit having learned that their child faces multiple surgical procedures to correct a congenital heart defect. After January 1, 2014, and under the ACA the prime directive of health insurance, to avoid risk, had been repealed.
Another major change in the purchasing of health care insurance after January 1, 2014, is that the bottom-end, garbage policies that provided an illusion of coverage are now a thing of the past. Now, all policies must include in their coverage a defined list of essential health benefits. Purchasers of insurance through the marketplace exchanges will now balance premium levels with out-of-pocket cost-sharing obligations. Moreover, some policies would limit provider networks; more costly policies might allow a broader choice of providers. Individuals and eventually small businesses would use this new structured process to compare the value and obligations of various offerings.
For two important groups in society, more major change arrived on January 1, 2014. Women will no longer pay universally higher premiums because of their gender and — in recognition of a changing economy — dependents can continue to purchase coverage through age twenty-six under their parents’ insurance coverage.
Medicaid, the federal-state program covering almost sixty million lower-income people of all ages, also experienced a basic change on New Year’s Day. Much of the commentary of the past year has focused on the five and one-half million people (we note our erroneous use of seven million in our last commentary) who reside in mostly conservative states that have not taken up the option to expand coverage with virtually total federal support. These people are now the “intentionally uninsured.”
But no matter in which state you live, nor whether that state has changed its eligibility levels for participation, Medicaid now has new and very different rules.
With the exception of a review of an applicant’s total asset levels, personal household income is now the determining factor in eligibility. Gone are the myriad categories which had treated women, men, and children with varying levels of eligibility, excluding entirely from federal benefits adults without children. This is a century defining change, in and of itself. As of the first of the year, across the United States and in regard to health care, we have abandoned the concept of the “deserving poor.” This concept, rooted centuries earlier in English Poor Law, meant that states could simply deny health-care coverage to individuals based on Dickensian-era prejudices. Now, Medicaid, determined by income eligibility alone, truly takes its place in America’s mixed continuum of public and private health insurance.
Big changes, indeed.
The next three months will continue to focus on the perils and successes of the enrollment process, eventually offering a scorecard in early April against the original seven-million-person target. More seasoned analysts will be less concerned with total enrollment and more focused on whether young and healthy persons, the so called “invincibles” will account for at least thirty percent of whatever enrollment is achieved. The fear is that an insurance pool dominated by those with illness will force carriers into large premium hikes for 2015. Currently, interim enrollment patterns fall several percentage points short of the target for younger people.
Even if the projected balance is not achieved, more seasoned observers believe that the overall support of the insurance industry for the ACA, the availability of corporate financial reserves, and internal cross-subsidy provisions in the law, will enable most carriers to minimize big premium increases, especially on the cusp of next fall’s elections.
At the end of the day, the insurance companies want the ACA to work.
We close with a sidebar comment worth watching in the months ahead. ObamaCare is headed back to the Supreme Court. After a mixed series of lower court decisions, the Court will hear the cases of Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties v. Sebelius. The plaintiffs argue that their companies are persons as defined in the Religious Freedom Restoration Act of 1993 and therefore should be exempted from providing their employees, of varying religious beliefs, contraceptive services as one of the free “preventive benefits” under the law. The argument goes that, as “persons,” the companies should be able to avoid obligations which violate the religious beliefs of their owners.
During the ACA debate, the long-standing practice of exempting religious organizations, churches for example, from rules contradicting their beliefs was observed, but the question about a private corporation having a religious belief was not accepted. As we go to press, an injunction by Justice Sonya Sotomayor has added to the debate. The Little Sisters of the Poor, a Colorado-based order of nuns who run nursing homes, argue that the ACA provision which allows them to avoid providing contraceptive coverage to their nursing home employees is not enough.
Under the ACA, religious-affiliated groups can opt out of providing contraception to their employees, but in order to do so they must sign a form affirming their objection. Once signed, the insurer must then offer contraception coverage to the employee. The insurers, for their part, have not complained, as offering coverage for contraception services is a balance-sheet winner for them compared with paying for the cost of a pregnancy.
If the Court arguments and decisions of 2012 are an example, this new round of cases will offer topics for future commentaries. The impact of the cases may go well beyond their specific issues. Here are two potential nuances.
As the Republican Party seeks redefinition for 2014, 2016 and beyond, with opposition to ObamaCare perhaps its single internal agreement, how is the expansion of the party’s appeal to women, for example, affected by a new and highly visible national debate about coverage for contraception? Will the Hobby Lobby, Conestoga or Little Sisters of the Poor cases reopen a new and highly charged cycle in the debate about corporate personhood begun in the Citizens United case?
Even more interesting is the link of contraception, ObamaCare and the American Catholic Church. To the consternation of religious women and many lay Catholics, the U.S. Conference of Catholic Bishops was a staunch opponent of the ACA’s passage. Whatever the benefits for a broader society, the ACA, as evidenced in the emerging cases, raised challenges to the Church’s moral teachings. But in 2013, Jorge Mario Bergoglio was elected Pope Francis. In one of his first statements, Francis likened the Church to a “field hospital after a battle.” With a church refocused on the wounded of society, might the future of ObamaCare become intertwined with a new debate in the American Catholic Church?
The ACA is about health care. It continues, however, to be engaged fundamentally in the evolution of the Republic. All the numbers aside, January 1, 2014 was a day of great consequence along that journey.