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Health reform’s winners and losers: by the numbers

From the January ACP Internist, copyright 2014 by the American College of Physicians

By Robert B. Doherty

Media coverage of the early (yes, it’s still early!) stages of the launch of the Affordable Care Act (ACA), or Obamacare, has focused on people who have had their individual health insurance coverage canceled. There has been much less mention of the much larger group of people who will be gaining affordable health insurance coverage.

The highly respected Brookings Institution recently published a pie chart on the ACA’s impact. The chart shows that:

  • 80% of Americans are largely unaffected by the ACA because they get to keep coverage from a large employer that already meets the law’s standards;
  • 14% are clear winners because they are the currently uninsured who will gain access to an affordable policy;
  • 3% will have no real consequence because they will have to buy new plans that are similar to existing policies”; and
  • only 3% are “potential losers” because they will “have to buy a higher quality health plan with no annual cap.”

Let’s break the numbers down into more precise segments of the population that will gain or lose under Obamacare.

The potential winners are:

  • Uninsured persons with serious health problems. “About 1.8 million uninsured people have received a previous cancer diagnosis. More than 2.8 million have been diagnosed with diabetes. Altogether, more than 5.7 million have been diagnosed with these ailments, or stroke, emphysema, heart failure, and similarly serious conditions,” reported health policy scholar Harold Pollack in a recent blog post.
  • 11 million low-income uninsured Americans who will get covered under Medicaid, according to a July 2012 Congressional Budget Office estimate, online. Surprisingly, in most states Medicaid enrollment so far is going like gangbusters, far outpacing signups for private health insurance offered through the ACA’s marketplaces. As I recently wrote in a guest blog post in the Philadelphia Inquirer, the huge interest in Medicaid suggests that “we are seeing what liberals have long hoped for and conservatives have long feared: that if people are offered a chance to easily enroll in a public plan (Medicaid) that generally offers better benefits and is cheaper than private insurance, they will jump at it, compared to the complexity of navigating a maze of private insurance companies that cost more and offer fewer benefits.”
  • Women, because they no longer can be charged higher premiums simply because of their gender and because maternity benefits are now included in all ACA-qualified health plans.
  • Older people who are not yet eligible for Medicare, since the ACA limits how much premiums can vary by age.

Who are the potential “losers”?

  • Some of the people who buy insurance from the individual market. Although fewer than 6% of Americans buy their insurance through the individual market in any given year, most of them must purchase a replacement plan that meets federal standards, and for some, the replacement plan will cost more. After a public outcry over the insurance cancellations in this market, the Obama administration has proposed that people be allowed to keep their individual insurance for another year. But this temporary administrative “fix” requires approval of state insurance commissioners, and not all are going along. Many of the people who have to replace their policies, though, will find that they can get a less expensive plan through the state insurance marketplaces, and most of them will get federal subsidies to help pay the premium. Families USA, a consumer advocacy group, calculates that “71% of people in the individual market under age 65 have incomes at or below 400% of poverty,” making them eligible for the ACA’s premium subsidies. (See more.)
  • Some younger and healthier people who are not insured by a large employer. A portion of this group may pay more to buy a plan on the marketplace so that older and sicker people pay less. But 9 out of 10 of them will qualify for Obamacare’s premium subsidies. Also, according to Media Matters, another 5 million younger persons have incomes that will make them eligible for Medicaid if their state is participating in the ACA’s Medicaid expansion. And young people up to age 26 can stay on their parents’ insurance plans.
  • Some men. Because the ACA prohibits insurers from varying premiums by gender, men and women now will pay the same premium for the same coverage, meaning that some men will pay more.

The biggest losers, though, are the 5 million low-income people who were supposed to get Medicaid coverage under Obamacare but currently can’t qualify because they live in a state that is not expanding Medicaid. This is a fault not of the ACA itself but of the states that have chosen not to accept federal funding to cover this group as originally intended by the ACA. The result will be that 3 out of 5 of the poorest Americans will go without coverage because their incomes fall below the federal poverty line, they won’t be able to get Medicaid because their state isn’t going along, and under the ACA they are ineligible to get tax credit subsidies to buy private insurance.

Of course, many of the potential winners from Obamacare have had enormous difficulties in signing up because of the inexcusable problems with the launch of the federal government’s website portal. Enrollment has been going quite well in many of the states, like California and Kentucky, that have set up their own marketplaces and Web enrollment portals. Until everyone can sign up everywhere without difficulty, it will continue to seem like there are more losers under Obamacare than winners, even though the numbers clearly show the opposite.

Another way to look at this, though, is to consider that all of us will age. Almost all of us will get sick. Almost all of us will someday want and need health insurance that covers essential benefits, doesn’t turn us away, and doesn’t bankrupt us. All of us have family members, neighbors, colleagues, friends and patients who have been left out of the current health insurance system. Doesn’t that make all of us winners when it comes to the ACA’s potential of making affordable health insurance available to all, regardless of our health status, our incomes, or where we live and work?

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