Obamacare headed for change, no matter who wins in November

Jennifer Graham, Deseret News
Published: October 20, 2016 8:01 AM CDT

With the U.S. spending a whopping 18 percent of its gross domestic product on health care, there's no shortage of health issues the next president must confront, such as ensuring that Medicare remains solvent and grappling with opioid addiction.

But health insurance may be foremost on the minds of many Americans as they vote, thanks to what Politico has called the "November surprise" — steep increases in health-insurance premiums that many voters will learn about just before the Nov. 8 election.

In this way, although President Barack Obama is not on the ballot, the future of Obamacare is.

The Affordable Care Act, hailed by the president as the most important health legislation since the creation of Medicare and Medicaid, is under assault, its failings assailed not only by longtime critics, but even those who were the legislation's staunchest supporters.

In recent days, former president Bill Clinton called Obamacare "a crazy system," The New York Times pronounced it "ailing," and even Obama has said "more work to reform health care is necessary." New York Times columnist Paul Krugman, an Obamacare defender, told Business Insider last month that it's looking "a little threadbare" and that "we are possibly seeing it start to unravel, not in all of the country, but at least in parts of the country."

Others are more blunt, and say it's flat-out imploding, as insurers either raise rates to cover their losses or simply pull out, as Aetna, Humana and UnitedHealthcare have done in some markets.

Although presidential candidates Donald Trump and Hillary Clinton have sharply different views on the ACA and what should happen to it, it's clear Obamacare is headed for change, no matter who wins.

Here's what has happened under Obamacare, and what every voter should know.

Under the ACA, more Americans have health insurance.

Although the exact numbers have been hotly debated, most Democrats and Republicans concede about 10 million people have been insured through the exchanges established by ACA, which the president has called “the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965.”

Another 10 million have obtained coverage through private policies or health-sharing ministries to comply with the ACA's requirement that everyone have insurance or pay a penalty (which also goes up in 2017, to 2.5 percent of your total household's adjusted gross income).

About 16 percent of Americans were uninsured in 2010, before the law took effect. The rate is now 8.6 percent, according to the Centers for Disease Control and Prevention. This allowed Hillary Clinton to declare at the second presidential debate that 90 percent of Americans have health insurance, the most ever, a claim that Politifact verified.

But some Americans have lost coverage since the ACA took effect. Writing for Real Clear Politics, conservative commentator Michelle Malkin described how her family's policy has been canceled three times since 2013. "Choices for families like mine have evaporated in the era of Obamacare," Malkin wrote.

This is partly because even policies outside of the state exchanges were affected by new regulations the ACA imposed — they can no longer deny coverage for pre-existing conditions, for example. And many companies are scaling back their premium policies because of a 40 percent tax (called the "Cadillac tax") that takes effect in 2020.

Premiums and deductibles have sharply increased.

As both Trump and Bill Clinton have noted, Americans are paying more for benefits they are using less. The Portland Press Herald in Maine recently noted that premiums there will jump to “unprecedented highs” in 2017, while the Minneapolis Star-Tribune said premiums could rise between 36 and 67 percent for thousands of subscribers in Minnesota.

The Kaiser Family Foundation analyzed plans in 16 states and the District of Columbia and found that costs of the lower-cost silver plans (the most popular ones on government exchanges) will rise an average of 9 percent. Copayments will also rise: The copayment to see a primary-care physician in the standard bronze plan will be $45 next year.

Another analysis predicts an average increase of 24 percent next year. "For family health insurance policies — the ones most difficult for workers to afford in the first place — premiums continue to rise faster than wages," Chris Conover, a research scholar at the Center for Health Policy and Inequalities Research at Duke University, wrote recently for Forbes.

While federal officials say subsidies provided through tax credits will also increase, they won’t help Americans who earn too much to qualify. The people who qualify earn between 100 and 400 percent of the poverty level; a family of four would qualify if it earns $97,200 or less. (People under the poverty level can get coverage through Medicaid.)

Subsidies are paid directly to insurers, making monthly premiums cheaper, or people can opt to receive them through tax credits.

But only those who obtain insurance through government exchanges can apply for subsidies; if you have private insurance, there's no government assistance.

And most people with private insurance will see their premiums go up in 2017, too — an average of 5 percent, said Brian Marcotte, the CEO of the nonprofit National Business Group on Health, to Sy Mukherjee of Fortune magazine.

The increases are occurring, in part, because insurers initially set their rates too low and have been losing money on the plans. Insurers have also struggled to deal with the problem of too few millennials signing up for coverage.

According to Politico, federal officials expected 40 percent of millennials to sign up for Obamacare; fewer than 30 percent did. That left "a pool of enrollees that is smaller, sicker and costlier than the expected" with not enough people to pay for them, Peter Sullivan wrote for The Hill.

Moreover, rates have been driven up by changes in the ACA that helped consumers, but cost insurers — such as letting young, healthy adults stay on their parents' plans instead of buying their own policies, and abolishing lifetime limits.

A total repeal is unlikely.

According to an NPR poll earlier this year, 15 percent of Americans said they have benefited from the Affordable Care Act, while more than 25 percent said it has hurt them.

"Most Americans are clearly unhappy with the ACA, but they were also unhappy with the pre-ACA status quo," James C. Capretta wrote recently for National Review.

And as Hillary Clinton noted at the second debate, Obamacare accomplished four popular things: Insurers can’t deny coverage because of pre-existing conditions, they can’t establish lifetime limits (“which is a big deal if you have serious health problems,” Clinton said); they can’t charge women more than men, and they must let adult offspring remain on their parents’ policies until they turn 26.

The potential loss of these provisions, as well as the sticky wicket of what would happen to the coverage of people covered through ACA, makes a total repeal unlikely, most analysts say.

Last year, when Republicans in the House were preparing to vote for the 55th time to change or repeal the law, Timothy Jost of the Washington and Lee University School of Law told Mother Jones magazine, “Talk of repealing the Affordable Care Act is like talk of repealing the interstate highway system. I mean, in theory you could do it. Nobody would want to live with it.”

The Commonwealth Fund estimates that 15 to 25 million people will lose coverage if the ACA is repealed.

Most analysts agree that the best thing to do is fix what's wrong, not start again from scratch, which is why groups like the National Academy of Medicine have been working for months to try to come up with alternate plans that could win bipartisan support.

The candidates agree on one thing.

Hillary Clinton has pledged to “defend and expand” the ACA and make health care more affordable for Americans by lowering copays, deductibles and prescription drugs; offering incentives that would encourage more states to expand Medicaid, and allowing people 55 and older to join Medicare. (Currently you have to be 65 or disabled.)

Of particular interest to families: Clinton’s plan would allow three “sick” visits per year not governed by deductibles and offer a tax credit to help people pay their out-of-pocket costs ($2,500 per individual, $5,000 per family).

The part most likely to cause controversy: Clinton wants to allow people who are in the country illegally to buy insurance on government exchanges, and she wants to ensure access to “affordable contraception and safe and legal abortion” for all women and repeal the Hyde Amendment, which prohibits the funding of abortions through Medicaid.

Donald Trump vows to repeal the ACA outright and says he will ask Congress to do this on his first day in office. He will replace it with a system that relies on private insurance and health savings accounts, with premiums that are tax-deductible. He would allow for people to shop for policies across state lines and establish high-risk pools for people with sporadic coverage. He would make the 40-year-old Hyde Amendment permanent law.

Of particular interest to families: Trump would require health care providers to reveal pricing upfront so people can comparison shop for their health services. He would allow all family members to tap into tax-free health savings accounts for out-of-pocket costs and the accounts could be inherited tax-free.

The most controversial part: Defunding Planned Parenthood.

Both candidates support letting Americans import drugs for their own use from other nations, so long as the medicine has been proven safe. (The FDA currently allows importing a three-month supply under restrictions that include the drugs address a “serious” condition with no effective treatment available in the U.S.)

Changes are coming, no matter who wins.

Small changes are coming to the ACA in 2017 regardless of who wins, thanks to new rules passed earlier this year.

Among them, according to Kaiser Health News, insurers will have to be more transparent about the size of their networks, and costs of ancillary charges like radiologists and anesthesiologists (which often result in unexpected bills for consumers) will have to count toward their annual deductibles.

Beyond that, some conservatives are hoping to revisit the proposal House Speaker Paul Ryan offered in June. Trump adopted some of that plan, including block grants for states for Medicaid, and, like Trump's, Ryan's plan calls for the ACA's repeal. But Capretta argued in National Review that Ryan's plan offers a gentler take on conservative principles that would not lead to "a full collapse of the individual-insurance market" as some fear a straight-out repeal would.

For Forbes magazine, John C. Goodman, known as the father of health savings accounts, wrote that Republicans and Democrats could put to rest seven years of squabbling and agree on a plan if they could drop the "technocratic details" and cooperate. Among his suggestions:

Offer everyone a tax credit (even more than Clinton's: $2,500 for individuals, $8,000 for families), while allowing insurers to adjust their benefits to cover their costs, even if this includes "some rationing by waiting" and limiting access to the most expensive drugs.

"Most people will want more and better options than this, and they and their employers can have them by spending their own after-tax dollars on more generous coverage," Goodman wrote.

In the Huffington Post, Dr. Tim Garson Jr., director of the Texas Medical Center Health Policy Institute, offered three solutions: pay physicians salaries, instead of paying them by the procedure, which could decrease spiraling health care costs; establish a new program that would cover poor people who aren't covered in the 19 states that didn't expand Medicaid; require coverage for both catastrophic health problems and preventive care.

Finally, Newt Gingrich and Tom Daschle last year devised a bipartisan plan they wrote about in The Washington Post in February. They'd like states to take advantage of a provision in the Affordable Care Act for "State Innovation Waivers" that would allow states to opt out of the federal plan if they provide the essential coverage that Obamacare does.

One thing that's unlikely to change when the new president is inaugurated: the ACA's nickname. Although it started as a pejorative (Mitt Romney was the first to use it as such, The Atlantic has reported), it's been embraced by headline writers and the president himself.

And let's face it, Trumpcare doesn't have quite the same ring.