It has taken five years of raucous debate, more than 40 congressional showdowns, a Supreme Court ruling and the lingering threat of government shutdown—but the long-awaited makeover of America’s broken health care system is finally at hand.
Since its enactment three years ago, the Affordable Care Act has curbed insurance-industry abuses and improved coverage for those who are lucky enough to have health plans. Now it confronts the bigger challenge of extending coverage to tens of millions of Americans who have long been frozen out of the system.
Starting Tuesday, people lacking health insurance will be able to shop for it in a marketplace that guarantees affordable coverage to everyone, regardless of age, sex, income or health status. The new system—a brainchild of the once-moderate Republican establishment—relies on free-market competition to give consumers the best possible health care at the lowest possible prices. And early evidence suggests it may just work. The average shopper will have 53 plans to choose from, according to the government’s latest estimates, and premiums are coming in 16 percent below previous projections.
As President Obama crowed in a buoyant speech last week, consumers using the new health care exchanges will be able to compare insurance rates as readily as plane fares. And with the help of federal tax credits, many uninsured families will be able to get basic health coverage for the cost of cable service or a cell-phone plan. “We’re giving more benefits and protections [to] folks who already have health insurance,” he said. “And we created a new market—basically a big group plan—for folks without health insurance so they get a better deal. And then we’re providing tax credits to help folks afford it… . You would think that would not be so controversial.”
Yet each hint of progress only inflames the rage of the political Right. Opponents have failed repeatedly to defeat, defund or overturn the Affordable Care Act. But they’ve sown enough confusion to turn public opinion against it (polls show that most Americans oppose Obamacare, even though they favor the law’s key provisions). And having struck out in Congress and the courts, some red states are now using frivolous regulations to sabotage the law’s implementation. These rear-guard assaults may cause real pain for millions of low-income Americans, but they’ve come too late to reverse history.
Until now, people without employer-sponsored health plans have lived like untouchables. In most states, anyone seeking individual coverage is vetted by underwriters and penalized for any condition—from hay fever to HIV—that might actually require treatment. Insurers typically reject nearly a fifth of all applicants for individual coverage. And those granted policies have faced prohibitive rates because they lack a large group’s bargaining power.
The health care exchanges are designed to correct these distortions. The health care law calls on each state to establish a marketplace where qualified insurers can offer four classes of coverage—bronze, silver, gold or platinum—and consumers can shop for the best deal on the type of plan they want. Under the new rules, everyone has to secure coverage (broader participation enables insurers to charge lower rates), but insurers can’t punish people for their health histories. Those with “pre-existing conditions” pay the same rates as everyone else, and older adults can’t be charged more than three times what younger adults pay. To make sure the insurance mandate doesn’t unfairly burden anyone, the law provides subsidies (via tax credits) to people making less than four times the federal poverty wage ($45,960 for an individual, $94,200 for a family of four).
Republicans once loved these ideas, but that was before a Democratic administration adopted them. This week 24 states—18 of them led by Democratic governors—will open their own insurance exchanges, either independently or in partnership with the federal government. But 26 others—24 of them led by Republicans—will leave the effort entirely to the feds. And rather than simply stepping aside, 13 of the hostile states are working actively to stymie the federal effort. Their tactics vary, but they have the same effect: they make it harder for uninsured people to understand and exercise their new options.
Shopping for health insurance requires some savvy, even in a transparent marketplace, and many Americans still lack it. Only 12 percent of uninsured Americans know that the health exchanges are opening this month, the Kaiser Family Foundation found in a poll released this weekend. In a similar survey, due out Monday, the Commonwealth Fund finds that only 32 percent of uninsured respondents have even heard about the exchanges. And past studies suggest that even people who know about the exchanges will need considerable help navigating them. When the American Institute of CPAs recently quizzed U.S. adults on three basic insurance terms—premium, deductible and copay—fewer than half could identify at least one.
To address this lack of awareness, the Obama administration is mobilizing a small army of local educators known as navigators. Working in partnership with local community organizations, the government trains laypeople to “maintain expertise in eligibility, enrollment, and program specifications and conduct public education activities to raise awareness about the Exchange.” Unlike insurance brokers, the navigators can’t sign people up for new coverage. Their job, as defined by the Department of Health and Human Services, is simply to clarify the different offerings and “help qualified individuals make informed decisions during the health plan selection process.”
HHS has awarded $67 million to navigator groups to prepare for this week’s rollout, but many of those groups now face state restrictions designed specifically to silence them. In Missouri, where 800,000 people lack health coverage, state law bars state and local officials from providing “assistance or resources of any kind” to the federally run health care exchange. In Florida—where 3.5 million are uninsured—the state department of health has barred navigators from conducting outreach through 67 county health departments, citing unfounded privacy concerns. And Texas Governor Rick Perry has ordered his insurance commissioner to hit the navigators with a barrage of new fees and requirements for training, registration, fingerprinting and background checks. This in a state where 4.8 million uninsured people need help finding health coverage.
These sabotage efforts can have real consequences. In a report issued last week, the advocacy group Health Care for America Now cites several instances in which qualified navigator groups have returned federal grants to avoid state harassment. In Ohio, the Cincinnati Children’s Hospital recently forfeited a $124,000 grant after the state imposed new restrictions on navigators. In West Virginia, a group serving the rural poor returned a $366,000 navigator grant after the state’s attorney general, Patrick Morrisey, sent an intimidating letter declaring that HHS had “provided organizations such as yours inadequate guidance to ensure the safety of consumer data.” And in Texas this month, a firm that has conducted Medicaid outreach for 20 years returned an $833,000 navigator grant, saying the “emerging state and federal regulatory scrutiny surrounding the Navigator program” would “distract us from fulfilling our obligations to our clients.”
Fortunately, the insurance industry isn’t so easily spooked. Whether they know it or not, millions of uninsured Americans will soon have a strong incentive and a rich opportunity to buy health coverage. Most will pay less than $100 a month after tapping the public support that Obamacare provides. Insurers may have to play by new rules, but the market opening before them is far too big to ignore. While die-hard opponents chant “train wreck”—and do their best to cause one—their friends in the business world are climbing aboard en masse. That’s why the average exchange already has 53 policies to choose from.
Don’t expect a smooth ride. “Folks in different parts of the country will have different experiences,” the president acknowledged last week. “It’s going to be smoother in places like Maryland, where governors are working to implement it rather than fight it.” But if history is any guide, the next generation of Americans will wonder what the fuss was about. Health security for seniors was a radical idea when Medicare was born a half-century ago. Today it’s a no-brainer.