It’s time to start your Obamacare education
So, that happened. Donald Trump will be the next president of the United States. His first item of business?
“Obamacare is a disaster. It is very bad, very bad health insurance. Far too expensive, and not only expensive for the person that has it, unbelievably expensive for our country…We have to repeal it and replace it with something absolutely much less expensive.”
This was one of several statements about “Obamacare” made by Donald Trump in the final presidential debate. He reiterated in a Philadelphia speech this week that repealing Obamacare is the first item on his agenda.
Vox.com has a great piece (“Trump and the GOP can absolutely repeal Obamacare — and 22 million people would lose health insurance”) outlining how that could actually happen (and quickly) once Trump and the new Congress start working early next year. Forgive Vox the dramatic headline. It’s been a rough day for millennials.
If this is happening, and we’re going to try something new with the government’s role in healthcare delivery, it’s time to get your facts straight. It’s time to understand your preferences, your assumptions, and your attitudes towards healthcare. Because if you don’t…well, let’s just say the next few months are going to get a tad bit confusing.
So let’s start that education, shall we?
First item of business: Has Obamacare failed?
This question gets down to your assumptions. Answer true/false to each of the following:
- Was the point of Obamacare to expand insurance coverage to all Americans?
- Was the point of Obamacare to decrease national health costs?
- Was the point of Obamacare to decrease your personal health costs?
The answer, according to those who wrote the Patient Protection and Affordable Care Act aka Obamacare (referred to hereafter by the shorthand “ACA”), was only #1. It got a little confusing though, when leaders like President Obama tried to soothe concerned voters about the cost of such an ambitious plan. And the framers of the ACA were certainly cognizant of cost. It just wasn’t necessarily their M.O. for the whole thing.
With that understood, though, access and cost are both critically important. Access that costs enough to bankrupt the whole scheme isn’t worth it in the end. Before we look at the facts on how well the ACA has done with both access and cost, here’s a quick graph that sets the stage for why we had the ACA in the first place.
The Reasons for the ACA
Total health expenditure as a share of GDP, 2009
See that red line? That’s what most relatively rich countries spend on healthcare. It’s a percentage of their GDP. In other words, a percent of the size of their total economy.
Now compare that red line to the tall drink of water to the very left. That’s us. 17.4% of our economy is healthcare. But that makes sense, right? We have the best healthcare in the world! Surgical robots, Watson, and Dr. McDreamy. USA! USA!
Well, not quite. Take a look at this graph from the same moment in time. I made this one in Excel, so it doesn’t look as cool.
This graph shows rates of infant mortality. There are a lot of health metrics we could look at, but this is one (I think) we can all agree on. Babies should not be dying if we can help it. This data is from the same group of rich countries in the same year as the spending data above.
The lower rates of infant mortality are to the right. That’s where we would expect health outcomes for a country that spends so much on health care. But look at where we are. Right behind the Slovak Republic. No bueno. Look at obesity rates, life expectancy, you name it, and you’ll see a similar story.
So we spend a lot of money, but we don’t have the best health. How does that happen? Well, there’s one more thing you need to see to understand why the ACA happened. I stole this graph from a professor of mine.
This sheds some light on why our overall number is so high. It’s too high for every racial category, but look at the infant mortality for the black population. That’s crazy, and for the record, there is no genetic or biological difference between white and black babies that would cause one group to have a different mortality rate than the other. The difference, at least in the eyes of the ACA writers, was access. A disproportionate number of black people are also poor, without access to insurance that will cover health care.
Poverty is closely associated with worse health, and a lot of poor people either did not know they qualified for help or could not afford insurance coverage that could start to chip away at the health inequities like the one above. There’s more to this, but that’s the quick and dirty version to give a little sense of the why behind it all.
So, we wrote, debated, finagled, and railroaded the ACA into being. 1.5 gazillion lawsuits and a couple of years later, how are we doing? Think back for our original questions.
1. Did the ACA expand coverage to all Americans?
Answer: Kind of yes. In a short span of time, the rate of uninsured non-elderly (less than 65 y.o.) went from 18.2% in 2010 to 10.5% in 2015. That’s a lot of people who now have coverage. Roughly 13 million of them. You’ll hear Democrats even say 20 million. It’s kind of hard to give a precise number, but the impact is not small. About half of those were poor people who qualified for government healthcare under Medicaid (a topic for another day). The other half are mostly lower and middle class people who have jobs and families and (now) health insurance. Of course, it’s worth noting that there are still 28.5 million (as of 2015) who make up that remaining 10.5% of nonelderly who are still uninsured. I bet money President Obama is a little mad at them every night before he goes to bed.
2. Did the ACA decrease national health spending?
Answer: Again, kind of yes. Before the ACA, the growth in health spending was out of control. Like this:
Check out those 7% annual spikes. Yikes! The first few years after the ACA, as you can see, that growth slowed dramatically.
Good things don’t last forever, and it’s hard to keep costs in forever. The Center for Medicare and Medicaid Services estimates that the growth in 2014 (after this graph ends), was 5.3%. And that’s projected to be a possibility this year, too. But 5% is a better spike that 7 or 9% growth. Without an alternate universe, it’s hard to say anything definitively, but it would seem the ACA at least muzzled the growth and limited the extremes we saw before.
Maybe more importantly, the ACA began a shift in how we pay for healthcare, focusing payment on the value of healthcare (did you get good care that made you healthier?) rather than the volume of healthcare (how much care did you get?). And it’s really too early to make a call on that one. Though the fact that only 2.3% of healthcare executives (i.e. rich folks in suits) support repealing the ACA speaks volumes to me. We’ll look at that more another time too. But we have one more question to get to.
3. Did the ACA decrease my spending on healthcare?
Answer: Yes and no. It depends on who you are. Many people have not felt the brunt of that 5.3% annual increase in 2014. If you’re older than 65, you probably haven’t. If you’re poor and have coverage for the first time, you definitely haven’t. If you’re reading this, are in your 30s and make between $50-$150k and have a family, then you’re probably the affluent young middle class. And you have definitely felt the burn.
That’s because not only is health care still getting more expensive (though at a slower rate), but older Americans are living longer, there are more of them, fewer of you, and someone has to subsidize all this care. Grandma isn’t paying her entire health bill. I know you didn’t volunteer for this but your extra money in premiums and taxes is a key reason why this increased access to care is working. So, if no one else has done so, I’d like to thank you.
One last thing. We’ve also seen a major increase in new types of insurance that shift a lot of risk to you, the consumer. We’ll get into the why’s another time, but your high deductible health plan (often called an HDHP) certainly feels costlier than your old one. We’ll discuss why it is and isn’t another time.
So there you have it. You have a sense for why we made this crazy thing called the ACA and a high level appreciation for what it accomplished. Stay tuned for more Obamacare education.
