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Lou Cannon: The Pluses and Minuses of Obamacare

 The Affordable Care Act, often called Obamacare, has provided health insurance for millions of Americans who previously lacked coverage and flocked to hospital emergency rooms in times of medical crisis. But six years after its enactment on a party-line vote, Obamacare remains a work in progress. Despite having been found constitutional by the Supreme Court, the ACA faces additional legal tests as well as political challenges from Left and Right. Even backers of the law express concern over its failure to curb insurance costs, a development that threatens further advances.


The good news about the ACA is that it has significantly reduced the ranks of the medically uninsured. The Centers for Disease Control and Prevention (CDC) last month found that 16.2 million people who lacked coverage in 2013, when the ACA became fully operative, had health insurance by the end of 2015. The percentage of uninsured fell to 9.1 percent, the first time this statistic has been in single digits. Furthermore, the CDC finding could be an understatement. The Department of Health and Human Services (HHS) has estimated the number of newly insured at 20 million.


But that’s it for the good news. Rising costs, heavy claims and reduced federal assistance are causing insurance companies to reevaluate the ACA, which offers four levels of coverage through on-line exchanges operated by HHS in 37 states. Thirteen states and the District of Columbia run their own exchanges. Some companies, including UnitedHealth, Blue Shield and Blue Cross, cite losses on policies issued under both the federal and state exchanges despite rate increases that averaged 8 percent nationally in 2016. As a result, many companies intend to seek much higher increases next year.


Observing that these 2017 rate increases will be announced on November 1, just a week before Election Day, Politico speculated they may be harmful to Democrats. Any political impact, however, would probably vary from state to state. Proposed increases for the “silver plan,” the second-level Obamacare tier, could rise by at least 18 percent in Maine, Maryland, Oregon, Vermont and Virginia, according to two studies, but only 5 percent in Washington state and 6 percent in Indiana.


More worrisome than rate increases is the growing trend of insurers to withdraw from Obamacare entirely. Minnesota-based UnitedHealth, the nation’s largest health insurer, has pulled out of most ACA exchanges, most recently in California. Wyoming is now served by a single insurer and Alabama and Alaska are expected to become single-insurer states in 2017. Insurers are particularly sparse in rural areas. According to the Kaiser Family Foundation, 225 counties, most of them largely rural, have only one insurer. The foundation expects this number to jump to 650 counties in 2017.


Even where competition abounds and policies are reasonably priced, some ACA recipients feel like “second-class patients,” according to Elisabeth Rosenthal of the New York Times. In a thoughtful article evaluating pluses and minuses of Obamacare, Rosenthal focused on self-employed small-business owners who originally welcomed the ACA but have since learned that various doctors and hospitals will not accept their policies. “Some early studies of the impact of the Affordable Care Plans are proving patients’ grumbling justified,” Rosenthal wrote. “Compared with the insurance that companies offer their employees, plans provide less coverage away from patients’ home states, require higher patient outlays for medicines and include a more limited number of doctors and hospitals, referred to as a narrow network policy.”


Meanwhile, in Congress the Republican-controlled House of Representatives, which has many times voted to repeal the ACA, continues a legal assault against Obamacare. The House won the latest battle when Judge Rosemary Collyer, a George W. Bush appointee to the U.S. District Court in Washington, D.C., ruled that insurance companies cannot be recompensed with tax credits for reducing deductibles and co-payments. She found that Congress did not authorize appropriations for this purpose when it passed the ACA. Given past Supreme Court decisions twice upholding the law, Judge Collyer’s decision is widely expected to be overturned on appeal, but President Obama could be out of office before this happens.


The ACA may also be hampered by a decision of the Internal Revenue Service creating an obstacle for streamlined health care networks that had the promise of lowering costs. Independent doctors and hospitals have been forming networks known as accountable care organizations to coordinate care for patients. But in denying a tax exemption to one of these organizations, which it did not identify, the IRS said it did not qualify for tax-exempt status because it was not operated exclusively for charitable purposes.


Outside the courts and regulatory agencies, Obamacare is being tested in the political arena by presidential candidates who are all over the map on health issues. Presumptive Republican nominee Donald Trump says he would scrap Obamacare without saying what he would put in its place. “We are going to replace Obamacare with something so much better,” he has said.

Democratic contender Bernie Sanders is highly detailed. He supports a single-payer system run by the federal government, an option rejected by the Obama administration when the ACA was being debated in Congress. But Sanders is now all but out of any real chance to win the nomination, while presumptive Democrat nominee Hillary Clinton is a staunch supporter of the ACA. Even so, under constant pressure from Sanders she has talked about expanding Medicare to persons in their 50s.


The conflicting positions of the candidates reflect the division of the public. A Gallup survey in May found 47 percent support and 49 percent opposition for the ACA, a virtual tie. The split was along party lines, with a majority of Democrats supportive of the law and an even larger majority of Republicans opposed. Slowly but steadily the percentage of Americans who tell Gallup the ACA has helped them and their families has risen and is now at 22 percent. But the percentage of those who say the ACA has hurt them has also risen and is now at 26 percent.


These partisan differences suggest that Obamacare will continue as a contentious issue regardless of the outcome of this year’s elections. The U.S. Senate, now under Republican control, could change hands, but neither side expects to win the 60 seats that conservatives would need to repeal Obamacare or liberals would need to adopt single-payer. In all likelihood the ACA will remain in place, becoming steadily more embedded in the nation’s social fabric with each passing year.


Muddling through with Obamacare does not necessarily require accepting all of its shortcomings. The federal government and the states face a challenge of making the Affordable Care Act truly affordable for those with incomes too high to qualify for Medicaid but too low to afford health insurance. Facing this challenge will require Democrats and Republicans alike to swallow their pride and address the issue in a bipartisan way. Perhaps this prospect, which now seems wildly remote, will become possible as costs rise and options narrow after the election. Perhaps.