Open enrollment for the Affordable Care Act ended officially on Monday night. And the last-minute rush to sign up for new insurance plans was every bit as big as the experts had always predicted. Traffic to the online marketplaces and calls to the telephone help centers were the highest ever. At in-person counseling offices around the country, people lined up by the dozens. All of this happened even though the Administration had already announced a special grace period for people who couldn’t complete their applications in time—in effect, extending the enrollment deadline for an extra week or two. “This dwarfs anything we’ve seen before,” one senior administration official told me. The official numbers will soon reflect that. Last week, the Administration announced that 6 million people had signed up for coverage. As of Monday evening, the number was close to and maybe above 7 million, as the projections from Charles Gaba indicated.
Whatever the final tally, you can count on law's critics to keep saying the number is less impressive than it seems. They will say that some people aren’t paying premiums, while others had insurance already. They will say sign-up numbers don’t account for the law’s downsides—like how many people lost plans they liked, or are paying more for coverage than they did before, or are having difficulty seeing the doctors they know. All of these arguments have at least some truth. And you should think about them when, inevitably, the Administration celebrates the final enrollment statistics.
But if the real story about Obamacare is a lot more complicated than the sign-up figures indicate, it’s also a lot more complicated than the conservative caricature of Obamacare would have you believe. The Affordable Care Act has unleashed a great many changes—some good, some bad, some in between. And it’s going to be a long time before there's enough evidence to assess them carefully. But the available data points offer hints about what is happening. And while they don’t add up to a clear, definitive vindication of the law, they are enough to justify some real optimism—the kind that hasn’t been possible since October 1, the day healthcare.gov launched, crashed, and nearly took the whole liberal cause into cyberhell with it.
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Think for a moment, in very basic terms, about what the Affordable Care Act is supposed to do. It really boils down to two simple goals. One is to improve economic security—to protect people from crippling medical costs, so that they can get the care they need without enduring financial ruin. The other goal, related but separate, is to transform medical care itself, so that it either costs less or provides better value for the price—or, ideally, some combination of the two. Nobody ever imagined that Obamacare alone would accomplish the goals. The best hope of supporters was that it would produce progress towards them. That’s why Senator Tom Harkin, whose committee helped write the bill, famously referred to the law as a “starter home.”
Four years after enactment, and six months into the final stage of implementation, the starter home may not look great. But it’s weathered the political and technological storms, albeit better in some parts of the country than others, and it is still standing. People are using the new marketplaces to get insurance. And the available evidence—a combination of state-specific data from places like Washington, Kentucky, and New York, along with fuzzy polling data and fuzzier anecdotes—suggests strongly the number of people without insurance is declining.
It’s impossible to tell by how much, so you should ignore anybody, left or right, who claims to know the answer. But the fact that enrollments through the marketplaces are approaching what the Congressional Budget Office and other experts once predicted ought to make you more confident about their other projections. And these authorities predicted the law would mean many more people had real, stable health insurance coverage. One reason, often overlooked in this debate, is that lots of people are getting coverage through other sources—like Medicaid or, if they are young adults, through their parents’ employers—that would not have been available without Obamacare. Another is that conservative stories of several million people losing coverage because insurers cancelled plans last year overlook one key fact: Nearly all of those people got new insurance, usually through the same carriers as before.
It may sound self-evident, but giving more people decent health insurance makes a real difference in people's lives. People with such coverage are less likely to experience financial hardship, as recent studies from Massachusetts and Oregon showed pretty clearly. (The effects on health, alas, are more ambiguous.) But the people that Obamacare saves from uninsurance are not the law's only beneficiaries. While some people are paying more for their coverage than they did last year, some are paying less, thanks to federal tax credits worth thousands of dollars a year to some people—as well as expanded eligibility for Medicaid, at least in those states where conservative officials haven’t resisted.
It’s going to be a while before anybody settles the question of which group of people is larger. (You can read all about that debate here.) But if the circle of beneficiaries includes both people who would otherwise have no insurance and those who would otherwise pay more, it’s hard to see how the ranks of people worse off financially could possibly be larger. It’s even harder to see when you consider that some people paying higher premiums today are also getting more comprehensive coverage—for example, plans that pay for real mental health care or offer fuller coverage of prescription drugs. That means these people will owe less money if they have an accident or get sick. "There are uncertainties ahead," says Larry Levitt of the Kaiser Family Foundation, "but it's hard to deny at this point that the law can work and that many people are benefiting from it, both those who were uninsured before and those that already had coverage."
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The progress on making medical care more efficient is, at once, clearer and more ambiguous. It’s clearer because there are actual numbers: Real per capita medical growth is rising at its slowest pace in recent memory. It’s more ambiguous because even like-minded experts argue about how much, if at all, the Affordable Care Act is responsible. Everybody agrees that the recession has played a huge role. (People worried about paying their bills tend to be a lot more frugal about spending money on everything, including medical care.) Everybody also agrees that the changing structure of private insurance, with higher cost-sharing for individuals, is another big factor. (And for this conservatives deserve more credit—or blame than liberals, because they are the ones who traditionally championed it.) The question is whether a third, x-factor is at work—and whether it’s the Affordable Care Act.
The best case for it comes from experts like David Cutler and Peter Orszag, who point to tantalizing signs that doctors and hospitals are changing the way they deliver health care, apparently in response to the new law’s incentives. The best known example is a sharp decline in “readmission”—that is, people going back to the hospital shortly after discharge, because they need care for problems that the previous stay had supposedly addressed. Orszag, the former Obama Administration official who sits on the board of Mount Sinai Hospital, notes that the institution had become much more aggressive about follow-up care—and that it seems to be paying off. There are similar stories all around the country. Cutler also thinks the readmission story is telling. (The graph below is from one of his slide shows.) If the slowdown in costs continues, Cutler notes, then the law will end up saving a lot more money than other experts have predicted.
But nobody knows this for sure and plenty of very credible, independent experts—like those at the Altarum Institute and the Kaiser Foundation—think the savings will prove largely illusory. Still, even if that happens, the law will have put in place mechanisms for further restraining costs—including many that conservatives happen to favor, at least when they are part of conservative plans. (The most obvious example here is the “Cadillac tax,” which reduces the tax benefits of expensive insurance and gives employers more reasons to clamp down on health care coverage.) And if the law’s ability to hold down the cost of medical care remains very much an open question, its effect on the budget seems pretty clear, at least for the near term. It is reducing the deficit. Conservatives keep insisting the opposite, calling the law Obamacare a budget-buster. But every time the CBO makes a new estimate, it reaffirms its judgment that he law will save more money than it spends. In fact, the projections of budget savings are getting bigger, not smaller, with time.
Of course, saving money in health care isn’t always a good thing. If it means reducing access to beneficial treatments or hindering access to providers or simply passing on more costs to consumers, it can do more harm than good. For every dollar the Affordable Care Act saves, a dollar is coming out of somebody's pocket. That is not always a trade for the better.
And that’s true for most of the law’s benefits. The tradeoffs are real and significant. The wealthiest Americans are paying higher taxes. Employers and most of the medical industry, under new pressures to cut costs, sometimes react in ways that harm individual consumers—whether it’s by making access to particular doctors more difficult or giving middle-class workers higher deductibles. Some young and healthy people who buy their own insurance are paying more now, because the law prohibits the insurance company pricing and benefit schemes that once benefited them. Most of the Obamacare stories that feature so prominently in ads from groups like Americans for Prosperity haven’t withstood media scrutiny. But don’t be fooled. Plenty of people aren’t happy with the way Obamacare has affected them. And that’s because the insurance they have now isn’t as cheap or as good as the insurance they had before.
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Like the positive effects of Obamacare, these negative effects are hard to quantify. They also depend a lot on value judgments. Is it worth making the rich pay higher taxes, just so the poor can get more financial assistance? Is it worth driving up insurance premiums, just so all policies have more comprehensive benefits? The law’s critics would answer these and other questions very differently than the law’s supporters would—and if you are interested in this debate, then you should give their arguments a serious hearing so that you can make up your own mind about them.
But conservatives who think the Affordable Care Act leaves Americans worse off also have an obligation to say what they would do instead. And those trade-offs would be real, too. The plans that conservative intellectuals like James Capretta, Yuval Levin, and Avik Roy have been discussing would probably mean less spending on health care, just as they claim. But based on what they have revealed so far, the plans would also mean less coverage or coverage for fewer people—which, one way or another, would mean less financial protection. Simply put, these plans would provide a lot less help to people than the Affordable Care Act does, leaving many more Americans exposed to high medical bills when they get sick. Broadly speaking, that's the trade-off for spending substantially less.
These conservatives would argue that's a worthwhile swap, for reasons that reflect genuine and real differences of philosophy and judgment about health care markets work. That would be a debate worth having. But almost nobody in the Republican Party—which is to say, nobody with actual power to put these plans into action—seems interested. Republicans have controlled the House of Representatives for more than three years now and they have voted for repealing the Affordable Care Act—not once, not twice, but fifty times. But they have not passed a single bill that would provide even a fraction of the help that the Affordable Care Act does. They have not even brought such a bill to the floor. As Jonathan Chait has put it, "Republican health-care proposals reside in a state of quasi-existence, and any attempt to summon them into political reality will cause them to disappear." Given such behavior, it's fair to conclude that their alternative to Obamacare is nothing, plain and simple. They think the old status quo, in which so many Americans had no insurance and so many more with insurance couldn't pay their bills, was preferable.
Politically speaking, Obamacare's defenders may not benefit from that. Public opinion on the law seems conflicted and stuck—disenchanted with the package as a whole, but strongly supportive of (most of) its component pieces. And it's not like the policy challenges have disappeared. As my colleague Alec MacGillis keeps trying to remind everybody, conservatives continue to block expansion of Medicaid in places like Florida and Texas full of low-income people who could desperately use the insurance. Premiums on the marketplaces could rise substantially in some parts of the country, depending on what mix of people has enrolled, and people too wealthy to qualify for subsidies would feel the impact. Some people will decide they're unhappy with their insurance, because they owe more co-payments than they expected or because they can't see the doctors they wanted. The Affordable Care Act won't be responsible for some of these changes, but it will take the blame and so will its supporters. Even the technology isn't quite right yet—on Monday, software bugs made the system inaccessible at various points in the day.
But the White House and its allies have been dealing with these issues for many months. Now they have a lot more good news to share, about millions of real people who are truly better off. They should feel good about that. Maybe you should, too.