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Health Care

The State of Obamacare Is ...

Despite a rocky launch, the law is finding its footing.

As more people sign up for coverage, Obamacare is getting stronger.(Brendan Smialowski/AFP/Getty Images)

photo of Sam Baker
January 28, 2014

If President Obama wants to spend much time tonight on health care, he'll be able to make a much stronger case than he could have just a few months ago.

Neither side of the aisle will be able to get as worked up over Obamacare as it might like. Republicans surely wish this speech would have happened in October, when the disastrous launch of HealthCare.gov knocked the White House on its heels. And Democrats surely wish the law was more popular, given how much political capital the party laid down to pass it.

The reality is somewhere in the middle. Right now, Obamacare looks like a modern-day Scorsese movie--not as good as it could have been, not bad enough to walk out of. It hasn't lived up to Obama's promises, nor has it lived down to Republicans' dire warnings. It's … fine.

 

"I would say it's mixed, but about as mixed as I would expect it to be," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.

The good news for the White House is that Obamacare is getting stronger every month. Its basic survival is pretty well assured, and it might ultimately hit the more ambitious targets the administration has tried to downplay.

It's basically impossible to envision a scenario in which Republicans repeal the law, or one in which it collapses on its own. People are enrolling, and the mix of young adults--crucial to the law's survival--is on a decent trajectory.

The White House has repeatedly defined down success, insisting that mere survival is now good enough after promising much more when the law first passed. But, though lower, the new bar appears to be one the law is certain to clear. And that means it'll be part of the basic fabric of the health care system for the foreseeable future. 

"It's working and it's beginning to be entrenched…. At each point in implementation, there have been big fears that opponents have pointed to. And at least so far, the program has gotten through every one of those hurdles," Levitt said.

The law survived a landmark Supreme Court case and the 2012 presidential election, and it is in the process of recovering from the HealthCare.gov launch, which effectively shaved two months off the six-month enrollment window.

Roughly 3 million people had signed up for private coverage through the law's insurance exchanges as of last week, putting enrollment almost back on track. The administration had initially hoped to enroll 3.3 million people by the end of 2013. It's still shy of that mark, but not by much--and enrollment is recovering fast enough that some experts believe the law might end up hitting the pre-HealthCare.gov target of 7 million enrollees in the first year, or at least getting close.

Even though the White House has downplayed that target lately, hitting it would be an undeniable success--and one that might help overcome some of the basic competency questions raised by the the website's launch.

"My view is having people enrolled is important, but one has to have reasonable expectations about how quickly it will ramp up," Levitt said.

So, the basic structure of Obamacare--insurance exchanges where people buy private coverage, with help from government subsidies, and in which plans have to meet certain rules--is here to stay. But that doesn't mean Obamacare is fully in the clear.

The law is still politically unpopular, and Obama hasn't fully recovered from the hit his personal approval ratings took as a result of the HealthCare.gov launch. It's likely to be a drag on Democratic Senate candidates this year, even if enrollment picks up.

Some Democratic political operatives fear voters will never warm up to the health care law even if they benefit from it or like what it has done, simply because they won't know that certain policies came about because of Obamacare.

And there are still substantive uncertainties about how effectively the law will work.

Caroline Pearson, vice president at the consulting firm Avalere Health, said the state of Obamacare is "progressing." The biggest looming issue for the rest of the open enrollment window, she said, is how many young people sign up for coverage.

Young people are assumed to be healthier than older consumers, and getting healthy people into the system is critical to keeping premiums steady.

At the end of December, about 25 percent of all enrollees were young adults. The prelaunch target was about 38 percent, but young people were always expected to sign up at the last minute (the end of March, in this case).

"There is no cause for panic in the initial numbers. That said, they need the number to get better," Pearson said.

Even a mix of 25 percent is good enough to avoid the worst-case scenario of an insurance "death spiral," according to the Kaiser Family Foundation.

The Affordable Care Act also includes a three-tiered safety net to cushion the blow in case the mix of sick versus healthy enrollees is worse than expected. Those programs last for three years, giving the administration some breathing room to ramp up enrollment.

But to ramp up the enrollment process over a three-year period, premiums need to stay as low as possible--and that means better enrollment among young adults.

"Twenty-five percent does not kill the exchanges, but it still means premiums rise next year," Pearson said.

Over the next three years, the overarching goal of the Affordable Care Act isn't simply to cover 25 million people, but to reduce the number of uninsured people in the United States by about 25 million.

We don't know yet how many of the 3 million enrollees were previously uninsured, and how many simply changed their policies. Enrollment will only reach its ultimate targets if the uninsured come into the system. That's not the most important test for whether the law makes it to 2015, but it will determine the law's long-term success.

"Reaching a final judgment on Obamacare [now] would be like reaching a final judgment on the United States a few months into 1776," Levitt said.

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