Obamacare is working brilliantly – for now

ANOTHER VIEW

For all the election-year talk about the nation's problems, one thing is undeniably improving, and has been for over a decade: the percentage of the U.S. population with health insurance. As recently as 2010, 17.8 percent of the non-elderly population lacked coverage; by early 2023, that rate had declined to 7.7 percent, an all-time low, according to government data.

The Affordable Care Act, also known as Obamacare, is a big reason. It has been expensive, entailing an expansion of government- run Medicaid to cover people around and below the poverty line and subsidies for higher earners to buy individual insurance plans on marketplaces the law created. Yet stable health coverage enables people to receive preventive care and other services that can reduce costs in the long run. By freeing people from health-care "job lock" - dependence on their employers for health insurance - the system also promotes labor mobility and entrepreneurship.

Obamacare is working particularly well now, thanks to temporary subsidies that President Joe Biden signed into law with the 2021 American Rescue Plan and extended with the 2022 Inflation Reduction Act. These enhancements boosted financial assistance for people eligible to buy private insurance on the marketplaces - that is, people at the poverty line (which for individuals equates to about $15,000 in annual income) and up. Premiums became more affordable. Insurance pools work best when many people buy in, spreading widely individuals' risk of big health costs. Enrollment on these platforms has increased from 11 million in 2020 to 21 million this year. By persuading more people to get coverage, lower sticker costs made the Obamacare marketplaces more robust.

Large surges have come in Texas, Florida and Georgia, accounting for half of the growth in the past two years.

Yet there are caveats. First, the enhancements will expire after 2025. Second, a quirk in the law - along with stubborn Republican opposition to Obamacare - has left some 2 million people out of the system. The law envisioned Medicaid covering all those beneath the poverty line, but 10 states have refused to expand the program to cover all people in that category. (This was not a drafting error; after the law passed, the Supreme Court declared that states must have the option of rejecting Medicaid expansion.) Some of these people fall into a coverage gap: being ineligible for Medicaid in their state and for federal help to buy private insurance. Many work in industries that don't offer employer-paid health plans. Most are people of color.

Those 10 states have continued to resist despite overwhelming evidence showing the positive health and economic effects of Medicaid expansion. They have little reason to balk at the expense; the federal government picks up 90 percent of the tab when states expand Medicaid to the full extent Obamacare envisioned. Momentum is building for their legislatures to reverse course, as leaders in other holdout states have done. North Carolina, for instance, enacted expansion last year with a Republican legislature. But the case for expansion has long been obvious, and resistance has become almost a matter of identity to some Republicans.

Next year, Congress will face two health policy imperatives: to get everyone who should be on Medicaid covered as soon as possible and to extend the Bidenera enhancements that have made the marketplaces work so well. Both might feature in an even larger debate over tax policy as the 2017 GOP tax cuts expire. Interest groups have been gearing up for that fight since May.

Federal lawmakers have options. They could extend subsidies to those in the Medicaid coverage gap, enabling them to buy private health plans on the Obamacare marketplace just as those higher on the income scale do. Another option is to temporarily enhance states' incentives to expand Medicaid- by, for example, offering to cover the total cost of expansion for a period of time. However, Congress may not, per the Supreme Court, punish states that refuse to expand Medicaid by docking them substantial amounts of federal funding.

Absent congressional action, America's health-care system will soon revert to the shakier state it was in before Mr. Biden took over. Yet federal lawmakers can easily avert this outcome - and make the system better while they're at it. This is a reminder that, for all the focus on the presidential race, House and Senate elections carry high stakes, too.

- The Washington Post

By freeing people from health-care "job lock" - dependence on their employers for health insurance - the system also promotes labor mobility and entrepreneurship.

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