It took everything President Obama, a Democratic Congress, and a Democratic Senate had to pass the Affordable Care Act. Now they have to make it work.
In less than three months, many of the ACA’s core features will finally take effect. Uninsured Americans, now required to purchase insurance, will be able to buy subsidized coverage from online exchanges in their state. But many Republican governors and state lawmakers are refusing to implement its features, leaving some gaps in coverage and forcing federal officials to step in and take the lead. With the law's critics eager to pounce on any sign of weakness as a reason to undermine it further (see the White House's decision to delay the less-consequential employer mandate) the pressure is on the administration to deliver an especially smooth rollout.
“It’s hard,” Obama said in a speech touting the law’s benefits on Thursday. “This is a big country, and the health care industry is massive and there are tons of providers. And so as we implement, there are going to be glitches and there are going to be certain states that for political reasons are resisting implementation. And we're just steadily working through all that stuff.”
The president had plenty of good news to tout, however. An HHS report showed premiums for health care plans available in many of the new exchanges are significantly lower than the administration expected, especially in large states like New York and California that have taken an active role in getting them up and running.
“Insurance companies will compete for your business,” Obama said. “And in states that are working hard to make sure this law delivers for their people, what we’re seeing is that consumers are getting a hint of how much money they’re potentially going to save because of this law.”
It's not all encouraging news, and premium costs depend in part on what regulations the state had in place before the ACA: Indiana reported an increase in average premium rates this week (offset for many by subsidies and more generous benefits) as companies plan on absorbing all applicants with pre-existing conditions for the first time. And Connecticut has had trouble getting its exchanges operational in time.
But the White House claims that, overall, the news reinforces what they already believe: implementation is working. In a briefing with reporters on Friday, senior administration officials sounded confident–maybe even cocky–in their ability to get the next phase up and running effectively. Aides present at the meeting included Jeanne Lambrew, deputy assistant to the president for health policy, along with David Simas and Tara McGuinness, who are heading the White House’s messaging operation for the ACA.
The biggest challenge identified by the administration and health care experts alike is getting young individuals who currently don’t have insurance to sign up for the exchanges. It’s taken as a given that older and sicker consumers will take advantage of the new insurance options, which finally eliminate discrimination based on pre-existing conditions and restrict premium hikes based on age. In order to keep down premium costs they’ll need to be offset by an influx of healthier consumers.
While there are 40 million uninsured Americans today, the exchanges and an expanded Medicaid program are expected to absorb them only gradually. The administration’s goal is to add 7 million participants by the end of the enrollment period that begins October 1. But the statistic they’re more concerned with in the short-term is not the raw number of applicants, but the percentage of participants who fit the “young invincibles” demographic, as the young and uninsured are sometimes called. Per their projections, they need 2.7 million 18-35 year olds to join during this first stretch to stay on track.
Obamacare skeptics argue those people will be too hard to incorporate into the system for several reasons. First, because the health care law is designed to average premium costs to make them more accessible to older and less healthy individuals, younger people are most likely to find their new options cost more than before the law, which often were cheap and high-deductible plans. Second, they’re less likely to want insurance (or the higher quality insurance required under the ACA), because they have fewer immediate medical needs and dependents and would rather spend their cash on rent or student loans.
“For the people who matter…there is going to be sticker shock,” Joe Antos, of the conservative American Enterprise Institute told msnbc. “They're going to see premiums that are a lot higher than they may expect. I’m not saying the rates are unrealistic, but a lot of people don’t realize how much health insurance costs.”
White House officials think these fears are overblown. A poll last month conducted by the Kaiser Institute shows the vast majority of uninsured individuals believe acquiring coverage is a top priority, including 77% of those aged 18-25 and 71% of those aged 26-30. They’re mostly just put off by the cost. Fortunately for the White House, younger Americans’ tend to make less money and are thus disproportionately likely to benefit from the ACA’s tax credits. One recent analysis by industry consultant Avalere Health estimated that two-thirds of under-30 participants who don’t already qualify for Medicaid should receive federal support for their premium costs.
“This concept of ‘rate shock’ is, I think, overblown,” Avalere founder and former Clinton health aide Dan Mendelson told msnbc. “It’s mostly raised for political purposes by those who oppose the law.”
Even if costs aren’t prohibitively high, it’s still going to be a challenge to reach the younger set. The White House is hoping a combination of campaign-style public events (like Obama’s Thursday remarks), targeted advertising, and cooperation from community organizations on the ground will help spread awareness of the exchanges once the enrollment period starts. It’s not a coincidence that Simas served as director of polling and public outreach for Obama’s re-election campaign, which drew praise from partisan operatives on both sides for its ability to identify and influence supporters through an advanced screening process.
Mendelson, who helped get the Children's Health Insurance Program off the ground under Clinton, said there were some concerns that the administration might be starting its outreach a little late or that political resistance might prove a drag. But he still thought they were “well positioned” overall.
“When we implemented CHIP, the president, vice president, and first lady were all out there aggressively advocating and we got more of a PR bounce out of that then we ever could have through funded efforts,” he said. “You can overcome a late start if you work hard and I think they will.”
For their part, officials say they’re wary of gearing up their campaign too early, as they want consumers to be able to make a direct jump from hearing about the exchanges to immediately looking them up online.
While many Republican governors are openly trying to undermine the law, elected officials in their major cities are often Democrats and Obama aides are counting on them to help make up the difference. Take Texas, for example: Rick Perry couldn’t be more opposed to Obamacare, but Houston, Dallas, and San Antonio all have Democratic mayors.
The political impact of the ACA’s implementation is a hot debate, but there’s a possibility it could put more pressure on some governors to back down and accept the law’s Medicaid expansion (as a handful have done already). While the exact process is still being worked out, administration officials say states will be required to inform individuals who apply for Medicaid under the ACA's new income levels that they’ve been rejected because their state government chose not to participate in the program.