The State of Obamacare Is …

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

US President Barack Obama does pushups during backetball shooting drills during the annual Easter Egg Roll on the South Lawn of the White House April 9, 2012 in Washington, DC. The First Family participated in the yearly event where the South Lawn is opened up to guests to participate in various egg rolls and other activities. AFP PHOTO/Brendan SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/GettyImages)
National Journal
Sam Baker
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Sam Baker
Jan. 28, 2014, 10:46 a.m.

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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