Published October 01, 2013
In 2009 and 2010, as the U.S. economy teetered on the precipice, President Barack Obama, to the dismay and consternation of many, spent an extraordinary amount of time and energy focusing his attention elsewhere.
The president, early in his first term, was determined to push through the single piece of legislation that will likely shape his long-term legacy -- the Affordable Care Act (ACA), more commonly referred to as ObamaCare.
Now, as a key element of that health-care reform legislation goes into effect, it’s fairly certain that few measures of the sprawling law’s success will be quantifiable until Obama is preparing to leave office in 2016 at the end of his second term.
“The big question is where will we be in 2016. That will be the key year in terms of determining the success of the law,” said Benjamin Conley, a Chicago-based attorney who specializes in helping companies comply with the complex plan.
“Whether the full force of the law will truly be enacted by then and whether it will receive the number of uninsured that was hoped for is anyone’s guess at this point. But there will be enough elements in place by 2016 to give it a fighting chance to achieve the stated goal of attaining near universal health-care coverage,” Conley said.
On Tuesday open enrollment begins for the state and federally run health-care exchanges created to provide coverage to the estimated 32 million uninsured Americans. Enrollment in the exchanges by large numbers of the uninsured is vital to the success of the larger reform effort.
Power in Numbers
At its core, the basic premise and motivation behind ObamaCare is that there is power in numbers. In other words, the more people who are insured and paying premiums the cheaper those premiums will be. And with larger numbers of Americans insured it will eventually drive down the costs for providing health care.
So participation in the exchanges will be closely watched, both by supporters of the ACA legislation and its many detractors.
Open enrollment begins Oct. 1 and runs through March 31, 2014. The government has predicted that 7 million Americans will sign up in the first year, 2.7 million of whom will be the all-important young and healthy folks whose premiums will help reduce the coverage costs for the old and infirm.
Wishful thinking? Perhaps, especially given the level of confusion expressed by some toward the reform effort and outright hostility conveyed by others.
Craig Broswell, owner of Machinax Fabrication Inc., a Chino, Calif., machinery maker with 12 full-time employees, offered a bit of both.
“I hate it. I don’t think it’s going to help the people,” he said. “I still don’t know what it is. I don’t know what the price is going to be.” Then, summing up his feelings, Broswell concluded, “It’s a job killer no matter how you look at it and what America needs right now is jobs.”
Broswell is hardly unique in his ambivalence to the sweeping changes proposed by ObamaCare to the vast U.S. health-care system. Opposition is broad-based and vocal.
A Bumpy Rollout
Recent well-publicized bumps in rolling out the law have provided much fodder for opponents who say the ACA is hopelessly unworkable. To wit, a software glitch acknowledged last week that could affect online applications from small businesses and most prominently perhaps the one-year delay of the employee mandate that requires companies with 50 or more workers to provide coverage or face penalties.
Speaker of the House John Boehner (R-Ohio) has described the law as “a train wreck.” And Senator Ted Cruz (R-Texas) captured the nation’s attention last week by denouncing health-care reform for over 21 hours on the floor of the U.S. Senate. Cruz and an influential group of fiscally conservative members of Congress had threatened to shut down the government unless ObamaCare is defunded.
While the effort was never likely to be successful, it highlighted the depth of opposition to ObamaCare in some circles.
Even some of Obama’s natural political allies within the powerful U.S. labor movement have come out against the law. At its September convention in Los Angeles, the AFL-CIO described the law as “highly disruptive,” saying it will increase the costs for union-sponsored health-care plans and threaten their existence. And in July three large unions including the Teamsters sent an angry letter to Congress denouncing the “perverse incentives” that are creating “nightmare scenarios” for many union members.
Not least among those, the unions noted, is the incentive to cut workers’ hours to circumvent the ACA's employer mandate requirement that businesses provide coverage to employees who work on average more than 30 hours a week. A rash of government employers, private companies and universities across the U.S. have recently announced cutbacks in workers’ hours to avoid paying for their employees’ health-care coverage.
Majority of Americans Disapprove
This discontent for the law is shared by a majority of Americans, according to the results of a poll released in mid-September by the Pew Research Center. The survey found that 53% of Americans disapprove of the law, while 42% approve. Nearly half of those who disapprove – or 23% of the overall public – believe Congress should take whatever measures necessary “to make the law fail.”
Given this widespread opposition among politicians, business leaders, unions and the general public, it’s fair to ask whether ObamaCare stands a chance of ever being fully implemented and eventually having a positive impact on sky-rocketing health-care costs.
Princeton University health care economist Uwe Reinhardt is skeptical the law can live up to the broad promise of its strongest supporters but he sees positive aspects. “It’s a complex and somewhat ugly patch on a complex and somewhat ugly system,” Reinhardt said.
For example, it won’t actually reduce overall health care spending, he said, but it could contribute to an ongoing trend that has seen a reduction in the growth of per capita health-care costs. And ‘universal’ health-care coverage is unlikely. “It could cut the number of uninsured in half,” Reinhardt predicted. “I personally judge that to be a good thing.”
Conceding that he’s not a fan of all of its components, Reinhardt believes some parts of the law “will flourish” over time. He cited pieces embedded in the act designed to improve patient care by requiring doctors, hospitals and insurance companies to more thoroughly integrate their computer systems. He also praised reforms that require more efficient payment networks. “These will benefit the system in the long run,” he said.
Reinhardt said implementation of the law will undoubtedly hit a few snags, but it will happen. He dismissed as “theatrics” the threats and highly-charged political opposition in Washington, D.C. (“They behave better at a drunken college party than they do in Washington,” he said.)
Opponents will be quick to issue ‘I told you sos’ on Jan. 1 when actual coverage for those who sign up through the exchanges begins if the number of enrollees falls below projections.
A key question is whether young and healthy Americans who are currently uninsured, either by choice, general indifference or lack of funds, can be convinced to obtain coverage through the exchanges rather than simply opting to pay the $95 penalty in the first year under the individual mandate portion of the law.
“In order for the law to succeed the most important component is healthy enrollment into the exchanges. And by healthy I mean voluminous numbers and healthy meaning healthy people,” said Conley, the Chicago health-care attorney.
Studies of the 7-year-old Massachusetts health-care systems on which ObamaCare was modeled have shown that financial penalties, even minimal ones, have worked as incentives for steering the uninsured into coverage, according to Conley.
One Accident Away
Other uninsured young people might opt in after coming to the conclusion that “they’re one motorcycle or car accident away from catastrophic medical expenses and bankruptcy,” the attorney said.
Coverage provided by the exchanges is tiered to meet the specific needs of different individuals, which might serve as another incentive for joining. A healthy single person in their 20s may opt only for catastrophic coverage which, according to figures released by the government last week, would run about $129 per month. And that number could drop even further depending on whether the person qualified for government subsidies based on their income.
Conley said trying to measure the success of the program prematurely – by Jan. 1, for instance -- will be an exercise in futility. But that won’t stop some. The law and those impacted by it need time to adjust and settle in, he said.
“One of the biggest problems is the disconnect between what people think the law provides and the reality,” Conley said. “It’s not all sunshine and roses, but that wasn’t the intent of the law.”