BUSINESS WEEK
Today begins the biggest expansion of health insurance since Medicare. According to the Congressional Budget Office (PDF), an estimated 7 million Americans will buy private health plans through the new online marketplaces known as insurance exchanges, which are now opening nationwide. That number is expected to more than triple in the years ahead.
It could be a bumpy launch, with technical problems and public confusion. Here are four big things to keep in mind as partisans on each side rush to render verdicts on the law’s success or failure:
The Affordable Care Act won’t expand coverage overnight. Medicare automatically helped millions of seniors with their hospital bills a year after it was signed. The ACA is more complex, and it won’t expand coverage as quickly. The law relies on a combination of incentives for people to buy insurance, marketplaces to shop for plans, and regulations to keep those markets functioning. It may be tempting for healthy people to skip buying insurance next year: The penalty for not complying is just $95, or 1 percent of income, whichever is higher. That ratchets up significantly in the next two years, to $695 or 2.5 percent of income. Expect more people to enroll as the penalties increase.
More states may come around. Almost half the states wanted nothing to do with Medicaid, which uses a combination of state and federal money to provide basic health coverage to poor families, when the program began in 1967, according to the Kaiser Family Foundation. Three years later, nearly every state had signed on. (Alaska joined in 1972 and Arizona did in 1982.) The Affordable Care Act is intended to expand Medicaid to encompass some low-income people who don’t currently qualify—for example, a family of four earning up to $31,322. Though about half the states are sitting on the sidelines, they may decide to expand Medicaid in the years ahead.
Glitches are inevitable, but they’ll get sorted out. Republicans point to delays and software problems as evidence that the Affordable Care Act is not ready for prime time. There’s a precedent for this: the GOP-led expansion of Medicare drug benefits a decade ago. In the first week of the new plan, patients were turned away from pharmacy counters. Some states declared public health emergencies and President George W. Bush ordered insurers to approve patients for a month’s worth of drugs for $5 while authorities sorted out the confusion.
The window for trying to undo the law is now closed. Opponents of Obamacare may not be ready to admit it, but the fight is over. Even with a government shutdown, the exchanges will still open. Their funding isn’t covered by the spending bills Congress halted. And, as Obamacare foe Senator Ted Cruz (R-Tex.) has said, once people begin to get insurance and subsidies through the Affordable Care Act, the law will be impossible to undo. “If we don’t do it now, in all likelihood, Obamacare will never, ever be repealed,” he told Sean Hannity.
Some 40 million Americans are uninsured, and getting those people, particularly the healthy and the young, into the insurance pool is critical to the ability of the Affordable Care Act to deliver on its promise of affordability. About 7 million people are expected to gain coverage through the exchanges over the next year, according to the Congressional Budget Office.
If those in the 18-to-34 age group—the young invincibles, as they’re known—stay away, insurance premiums could rise overall and the critics of Obamacare will declare the whole effort an epic example of misguided liberal social policy.
How will we know if Obamacare has a real shot of succeeding? Watch Hispanic enrollment, according to a recent analysis by the Kaiser Foundation. If this powerful and growing demographic group buys insurance in a big way, the president will have reason to be optimistic about the future of his landmark legislation.
America’s 52.2 million Hispanics represent about 17 percent of the total U.S. population—and nearly half (47 percent) are under the age of 26. For the overall population, only about 35 percent are under 26.Some 15.5 million Hispanics have no health insurance. That’s about 32 percent of America’s total uninsured population, if you exclude the elderly.
The states to watch are Arizona, California, Colorado, Florida, Nevada, New Jersey, and Texas—all states where Hispanics account for more than 20 percent of the population.
WASHINGTON POST
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If the exchanges implode, the ACA will fail and be repealed. That is, if healthy people on the individual market choose to go without health insurance, it will mean the math won’t work, and the program will be a disaster. But people aren’t going to decide whether to get health insurance based on their politics. If there’s a good product, relatively easy to buy, at a good enough price, then they’re going to purchase it. If not, they won’t, and the political support for Obamacare will disappear relatively quickly.
However, if people do sign up — if the program works at a basic level — then it will be game over.