The Affordable Care Act Buffers Vulnerable against COVID-19
Because the ACA greatly improved non-employer insurance options, more Americans will have access to health coverage during the pandemic
The United States is currently starting down a health care disaster: Between the COVID-19 pandemic and the accompanying economic collapse, tens of millions of Americans are losing both their jobs and their employer health insurance. Naturally, this series of unfortunate events takes place at the precise moment it would really be helpful for those same Americans to have access to comprehensive health care.
But things could be much, much worse. Thanks to the passage of some rather far-sighted policy reforms that took place starting in 2010, and the failure of some very shortsighted proposals in 2017, many, and likely most — of those Americans will still have access to comprehensive and affordable health coverage.
Yes, I’m talking about the Affordable Care Act and Republican attempts to repeal it. And yes, to paraphrase the current Democratic presidential nominee, it has been and remains a rather big deal.
Prior to 2010, having health insurance was linked to employment in the United States far more than in our peer group of industrialized countries. (It’s oversimplification to say that no other country links employment to coverage: even in many single-payer systems, employers offer supplementary coverage for things basic public insurance doesn’t cover, like prescription drugs in Canada. Our universal coverage scheme, Medicare, covered only the elderly and disabled. Medicaid was limited to certain classes of the “deserving” poor: children, pregnant women and some parents. Only a few states extended coverage to significant numbers of childless adults. Everyone else who didn’t have coverage through a job was left with few options. They could either go without insurance or attempt to buy a plan of dubious value on the unregulated individual markets of most states. People with preexisting health problems — you know, the ones who actually needed health care — generally had to pay considerably more or couldn’t buy a plan at all.
The passage of the Affordable Care Act — championed by Democrats like this guy and this lady — changed the dynamics of U.S. health insurance in two fundamental ways.
First, it created universal health coverage for low-income people. Anyone — excluding undocumented residents — who lived in a household earning under 138 percent of the federal poverty line would qualify for Medicaid coverage. The Supreme Court poked a hole in the Medicaid expansion by making it optional instead of mandatory for states to accept it. As a result, 14 states — including large ones like Texas, Florida, Georgia and North Carolina — still have no universal coverage for the poor.
Second, the ACA created functioning state individual insurance markets for people without access to employer-provided insurance by implementing four major reforms. First, the law ensured that plans were worthwhile mandating a standard minimum coverage package (no excluding prescription drug coverage, maternity benefits for example). Second, reforms allowed anyone to purchase a plan regardless of preexisting conditions health conditions (guaranteed issue) at the same price (community rating). Third, to keep prices affordable and entice healthy people into the market, the ACA provided two types of subsidies. The first subsidy capped premium payments for people earning between 100 and 400 percent of the federal poverty line (under $104,000 for a family of four in 2020) The second subsidy cost-sharing reduction payments reduced out-of-pocket expenses for people earning between 100 and 250 percent of the poverty line (about $69,000 for a family of four).
The Medicaid expansion and the state exchanges launched in 2014, and combined by the end of 2016 they had reduced the U.S. uninsured population by 40 percent, from 44.4 million to 26.7 million.
But with the massive economic dislocation caused by COVID-19, we’re beginning to see the true worth of the Affordable Care Act.
Since March 15, Americans have filed more than 40 million new claims for unemployment benefits — an order of magnitude more than any point since statistics started being kept, representing the largest spike in unemployment since the Great Depression.
Before 2014, when Americans lost their jobs, it meant that they generally lost access to health insurance. Kids and some parents could be covered under Medicaid. Most had the option to keep their employer health insurance for six months if they paid the full premium under a provision of the 1986 Consolidated Omnibus Reconciliation Act (COBRA), though the cost was prohibitive for most.
But now between the Medicaid Expansion and the ACA insurance exchanges, they have multiple options to get useful insurance. Of the 26.8 million people the Henry J. Kaiser Family Foundation estimated likely lost Employer-provided health insurance in March and April, 12.7 million would be eligible for Medicaid, and 8.4 million would be eligible to purchase subsidized insurance on the ACA marketplaces, or 21.1 million overall.
For the sake of argument, let’s assume that 80 percent of people who are eligible sign up for health care, and that half of the currently eligible for Medicaid would not have been under the pre-ACA landscape. That means that the ACA cut the expected number of uninsured from 21.7 million to 9.9 million — keeping nearly 12 million Americans insured who otherwise would have lost coverage.
That’s the equivalent of covering the entire country of Belgium. (Or if you prefer Central America: that’s health coverage for Nicaragua AND Panama, with enough left over for Belize and the small Caribbean islands.)
Now consider Republican preferences for health care policy.
Currently, the Trump administration is arguing that the entire Affordable Care Act is unconstitutional in Federal Court for extraordinarily dubious reasons.
In 2017, Republicans tried — and failed — to pass the American Health Care Act. That proposal would have drastically cut back on the protections and subsidies of the ACA, eliminated the Medicaid expansion, and cut the basic Medicaid program by 25 percent.
Large cuts to Medicaid would be phasing in this year, at the height of the COIVD-19 pandemic.
That would infinitely compound the nightmare we face.
But because the ACHA failed, we have retained the ACA’s considerable capacity expansions to protect Americans against COVID-19. Hopefully, the Supreme Court will uphold the law in the fall.
The bottom line is that good public policy protects public health.
And electing good policymakers matters too.
Remember that as you think about who you’re going to vote for Nov. 3.
