Health Insurance Industry

Economists believe something that on its face sounds absolutely bizarre to a normal human being: Obamacare's tax on expensive health insurance will give Americans a pay raise. Here's the argument: Economic theory predicts that companies have a set amount they're willing to pay a worker, given her specific talents and skills. Under this theory, companies are agnostic to whether they spend that money on a salary, a health plan, maybe a gym subsidy, or even a free puppy. What's important is attracting the best workers, and companies will use that money however is necessary in order to get those workers and keep them happy.

More than 16 million Americans gained health coverage because of the Affordable Care Act, mainly via the law's health insurance exchange and Medicaid expansion, according to an analysis published Monday by the Department of Health and Human Services. The government estimate is consistent with numerous surveys taken over the past two years. The Health and Human Services report issued Monday is based in part on findings from the polling company Gallup, which found the uninsured rate has fallen from 20.3 percent in October 2013, when Obamacare sign-ups began, to 12.3 percent during the first quarter of this year.

Here's some good news: the latest report from the CBO has reduced its estimate of the cost of Obamacare. This is due partly to a slight decrease in the number of people CBO expects to be covered, but mostly due a lower estimate of the cost of insurance premiums. Thanks to this, federal subsidies are estimated at $209 billion less over a ten-year period, and the cost of CHIP and Medicaid is estimated at $73 billion less. However, there are also reductions in expected revenues from Obamacare's excise tax, so the net reduction amounts to $142 billion over ten years. The table below tells the story. Sarah Kliff has more details here.

One of the first things House Republicans plan to do after Congress reconvenes Tuesday is vote on a bill that would gut Obamacare—and could deprive up to 1.5 million Americans of their employer-sponsored health insurance. After the GOP-controlled House passes the bill, the newly Republican Senate is likely to pass the measure too. What's more, President Barack Obama may be forced to sign this legislation if it is attached to a must-pass budget bill later this year.

Obamacare has had a rough month: it’s being challenged in a Supreme Court case; House Republicans are trying to undermine it with a lawsuit; and its poll numbers are terrible. But on the ground the Affordable Care Act—which is starting its second open-enrollment period—looks robust. Most people in the program say they’re happy with their plans, and new insurers are entering the market. Prices are pretty good, too: estimates suggest that premiums for the second-cheapest of the “silver” plans, which is the benchmark used to set subsidies, have risen by an average of just two to five per cent. Still, one fundamental challenge remains: if Obamacare is to succeed in holding down premiums over the long run, it needs consumers to shop around.

The second year of Obamacare’s open enrollment begins Saturday, and unresolved problems from the first season are complicating the already daunting task of enrolling millions of uninsured and re-enrolling millions more. The lingering challenges involve both flawed technology and public perception of the Affordable Care Act as the Supreme Court prepares to review yet another key provision. The first season actually beat enrollment expectations, despite its disastrous start. More than 7 million people have exchange plans, and about 8.7 million were added to Medicaid. Premium increases for 2015 have generally been modest, though not all states have announced them yet. But the distrust and opposition, as the midterm elections vividly illustrated, still runs deep.

Last month, the US Census Bureau released its annual figures on income, poverty and health insurance. It revealed that four years into the economic recovery, economic insecurity remains widespread, and low — and middle — income workers have seen no significant wage growth over the past decade. With the poverty rate at an unacceptable 14.5 percent and economic inequality stuck at historically high levels, one might assume that chronic economic insecurity and an off-kilter economy are the “new normal” — that nothing can be done to fix it. But there is nothing “normal” or inevitable about more than 45 million Americans living in poverty. It is the direct result of policy choices. With different policy choices, we will see a more equitable economy — it’s as simple as that.

Since President Obama signed the Affordable Care Act in 2010, the law has weathered a government shutdown, a Supreme Court challenge and scores of political attack ads. But while an estimated 20 million people have gained insurance under the law, it still has no shortage of opponents, from lawmakers trying to repeal it, governors blocking portions of it and lawyers challenging its constitutionality. More Americans, after all, still oppose the law than support it. So where does that leave us? One year after the ACA opened its new health insurance markets to the public, we asked some of the country’s smartest health-care thinkers, from in and outside government and both sides of the aisle, to tell us what Obamacare hasn’t fixed in the American health-care system—and what we can do now.