Republicans wage 7-year war against Obamacare on behalf of a tiny fraction of aggrieved Americans

Key Points
  • As Republicans crafted a replacement this spring, Trump promised "much lower premiums and deductibles."
  • In reality, just a tiny fraction of Americans—disproportionately young, male, healthy and middle-to-high income—has seen costs sharply increase because of Obamacare.
  • More than 90 percent of those with health insurance before Obamacare got it from employers or the government, mainly Medicare and Medicaid.
Senate's repeal only health care bill fails

Republicans have waged their seven-year war against Obamacare on behalf of a remarkably small number of aggrieved Americans.

President Donald Trump spoke for his party last fall as he ripped the Affordable Care Act for pushing rates "through the sky." As Republicans crafted a replacement this spring, he promised "much lower premiums and deductibles."

In reality, just a tiny fraction of Americans — disproportionately young, male, healthy and middle-to-high income — has seen costs sharply increase because of Obamacare. Liberal and conservative experts alike place the number well below 10 million people — 3 percent or less of the population.

Twice that number – disproportionately poorer and less healthy people — gained insurance under Obamacare. Many received immense medical and financial benefits.

True to their anti-government ethos, Republicans disdain Obamacare on tax-and-spending grounds. But ideological complaints that its mandates inhibit freedom never achieved broad resonance. Attacks on its "job-killing" effects faded amid uninterrupted private sector employment gains since it passed.

That left out-of-pocket costs through premiums and deductibles the most potent GOP weapon – even though premiums and deductibles for most Americans were little changed by Obamacare.
In fact, Obamacare's principal impact on the bulk of the population has been political noise.

More than 90 percent of those with health insurance before Obamacare got it from employers or the government, mainly Medicare and Medicaid; their coverage didn't fundamentally change.

"The basic circumstances of their health insurance, the general level of premiums, access to care was basically unaffected," said Joseph Antos, a health care expert at the conservative American Enterprise Institute.

Premiums for employer-provided coverage increased by an annual average of 3.1 percent from 2010 and 2016 – less than they increased in the decade before Obamacare.

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What changed fundamentally were policies for the small share of Americans served by the "individual market," which commonly offered inexpensive, bare-bones coverage for relatively healthy people. Those with costly medical needs paid high premiums, if companies sold them policies at all.

Obamacare required individual market policies to offer more generous benefits resembling those offered by employers. They ensured that even sick people could buy coverage, prevented insurers from charging women more than men, and limited how much more they could charge the old than the young.

Those changes significantly raised individual market premiums overall. For most purchasers, with low or moderate incomes, Obamacare subsidies reduced their costs.

But some more-affluent customers faced big cost increases without any cushion from subsidies. Young, healthy customers whose previous policies mainly protected against catastrophic illness – say, for monthly premiums as low as $100 – now had to buy Obamacare policies. By 2016, the Urban Institute estimated, monthly premiums averaged $464 nationally.

How many Obamacare "losers" were there?

Mr. Antos estimates fewer than 10 million people, though existing data isn't adequate for anyone to say precisely. MIT health economist Jonathan Gruber, who helped craft Obamacare and then-Gov. Mitt Romney's earlier state-level version in Massachusetts, estimates 4-6 million.
Roughly 14-million gained insurance under Obamacare's expansion of Medicaid, which generally charges no premiums at all. Individual market coverage has risen to 18 million from 11 million in 2013.

Costs declined precipitously for many of those customers. Big beneficiaries include women, older people and those with expensive medical conditions previously subject to annual or lifetime insurance caps.

The National Bureau of Economic Research in 2016 found "important financial impact beyond health care use" for those who gained Medicaid coverage. Those included a reduction in unpaid bills and a decline in debt collection balances of $600-$1,000.

Personal bankruptcies, historically associated with medical debt, fell by half between 2010 and 2016, according to the American Bankruptcy Institute. That period coincided with recovery from the Great Recession as well as implementation of Obamacare.

Republican replacement plans before Congress would reshuffle winners and losers. They would slash the spending that expanded Medicaid, reduce subsidies, and loosen the reins on what insurers can charge.

Those without significant health problems could benefit from paying lower premiums for lower-benefit policies. Vastly-higher individual market deductibles–the Congressional Budget Office projects they would reach $13,000 by 2026—would chiefly affect the very sick.

Another group of repeal winners: those with incomes over $200,000 who have financed coverage improvements through Obamacare's higher payroll and investment income taxes. That's about 6 million people, or 1.9 percent of the population.

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