How Obamacare Lives On, Despite Trump’s Best Efforts
(Bloomberg) -- The U.S. health-care law known as Obamacare turns 10 next year but still finds itself at existential risk both politically and legally. Millions of Americans owe their health coverage to the law enacted under President Barack Obama and fellow Democrats, even as opponents have successfully trimmed its scope. It remains a target for elimination by the Republican Party and Obama’s successor, President Donald Trump, who calls it "really bad health care."
1. How much of Obamacare still exists?
Most of it, including tax subsidies to help people afford coverage and, in 37 states as of April 2019, expanded eligibility for Medicaid, the U.S. health insurance program for low-income Americans. Key Obamacare consumer protections that also remain in place allow children to stay on a parent’s policy until age 26, require insurance companies to treat people with preexisting conditions equally and prohibit the imposition of annual or lifetime coverage limits.
2. How many Americans are covered because of Obamacare?
Roughly 20 million. About two-thirds of them joined Medicaid as a result of the expanded eligibility. The rest found coverage by comparison-shopping among private insurers at government-run online marketplaces, which provide subsidies for people who make up to 400 percent of the federal poverty level. (The expanded version of Medicaid enrolls people earning up to 138 percent of the poverty line.) Even with Obamacare in place, 28.5 million Americans lacked coverage in 2017. The U.S. is an outlier among developed countries by not having universal health coverage.
3. Which parts have been eliminated?
Obamacare originally required all states to participate in the expanded Medicaid program; the Supreme Court, in a 2012 split ruling that upheld most of the law, struck down the requirement, saying the federal government can’t threaten to withhold funds from states that don’t comply. The law as written also required all Americans to buy health insurance -- the so-called "individual mandate" -- at risk of a tax penalty. A tax overhaul passed by Republicans and signed by Trump in 2017 eliminated the penalty for noncompliance, rendering the mandate moot. The Trump administration has further whittled away at Obamacare with executive actions, including one that cut funding for "navigators" that help sign people up.
4. Wasn’t Obamacare supposed to be dead by now?
It might have seemed so in 2017, when Republicans took control of both chambers of Congress and Trump became president. But after their repeal measure failed by one vote to advance in the Senate, party leaders moved on to other issues. With Democrats now in the majority in the House, Obamacare is safe from legislative attacks, though it’s still vulnerable on the legal front.
5. What legal threats does it face?
The main one at the moment is a lawsuit brought by 20 states arguing that when Congress voided the penalty for not having insurance, all of Obamacare was rendered unconstitutional. In December, a U.S. judge in Texas sided with the challengers in an explosive ruling that Trump celebrated on Twitter but is on hold pending further appeal. With the Trump administration refusing to defend Obamacare, the state of California stepped up to do so. Many legal scholars describe the lawsuit as far-fetched and unlikely to prevail should it reach the U.S. Supreme Court. Five justices who voted to uphold Obamacare against major challenges in 2012 and 2015 remain on the nine-member court.
6. What happens if Obamacare is struck down by the courts?
An adverse Supreme Court ruling would cause a "thermonuclear meltdown on the health policy front" that would throw the U.S. system into chaos, said Douglas Holtz-Eakin, an economist with the conservative think tank American Action Forum. It would instantly rescind coverage for millions of Americans as well as undo consumer protections and regulations that have reshaped the business models for insurers, drug companies, hospitals and doctors.
7. What could replace it?
For now, there’s no viable replacement plan in Congress and little chance the two parties could agree on something new. After Trump encouraged fellow Republicans to propose an alternate vision and become "the party of health care," Republican leaders in Congress showed no appetite -- and the president had to punt his goal to 2021. An added challenge is clearing the very high bar Trump set while running for president in 2016: He promised not only to repeal Obamacare -- a goal shared by virtually every Republican in Congress -- but to replace it with a plan "that will broaden health care access, make health care more affordable and improve the quality of the care available to all Americans.”
8. Is Obamacare viable for the long term in its current state?
Some health economists worry about a "death spiral" of rising costs without a mechanism to force healthy Americans to get covered. (Healthier people buying coverage keeps costs down for sick people.) Another Obamacare weakness is the limited coverage options available to Americans in rural and remote parts of the country. And in the mostly Republican-led states where elected leaders have declined to expand Medicaid eligibility, many residents fall in a coverage gap, earning just enough income that they don’t qualify for subsidies.
9. Do Americans wants Obamacare to stay or go?
U.S. public opinion of the law was mostly negative from its passage in March 2010 until Trump became president and moved to repeal it, according to tracking surveys by the Kaiser Family Foundation. The threat of elimination put a spotlight on popular provisions of the law, notably its prohibition on insurers charging sick people more for coverage and its list of "essential health benefits," like hospitalization and maternity care, that must be covered. (Republicans pushed legislation in 2017 that would let states waive those rules and devise alternate systems.) Kaiser’s tracking survey found in March 2019 that 50 percent of Americans viewed the law favorably, while 39 percent viewed it unfavorably.
The Reference Shelf
- Trump says his party "blew it" on health care.
- A QuickTake explainer of the now-repealed individual mandate, the least popular part of Obamacare.
- Which U.S. states have and haven’t expanded eligibility for Medicaid.
- The Henry J. Kaiser Family Foundation explores what might happen if Obamacare is struck down as unconstitutional.
- A Bloomberg Opinion editorial backed a plan by House Democrats to strengthen Obamacare.
©2019 Bloomberg L.P.