The Obamacare Is Falling! The Obamacare Is Falling!

AP Photo/Steve Browne, Valley City Times-Record

As we approach the full implementation of the Affordable Care Act at the end of the year, confusion still reigns. Most Americans don't understand what the ACA does or how it works, which is perhaps understandable. It is, after all, an exceedingly complex law, and from even before it passed there was an aggressive and well-funded campaign of misinformation meant to confuse and deceive Americans about it, a campaign that continues to this day and shows no sign of abating. To undo uncertainty and banish befuddlement, we offer answers to a few questions you might have about Obamacare.

What's happening when?

The next important date is October 1, when open enrollment for insurance plans on the new exchanges begins. Those who sign up will begin their new insurance on January 1, when the rest of the high-profile components of the law take effect. The individual mandate, requiring everyone to carry insurance or pay a fine, takes effect, as does the rule forbidding insurance companies from denying anyone coverage (or charging them exorbitant premiums) because of pre-existing conditions. In fact, after January 1 the entire notion of the "pre-existing condition" will become nothing but a historical curiosity, a feature of the dark past we've moved beyond. Insurance companies will also be forbidden from imposing annual limits on what people are covered for (an accompanying ban on lifetime limits is already in effect). Tax credits for small businesses to offer their employees insurance will be expanded, and millions of low-income Americans will be eligible to be covered through Medicaid. While we talk about January 1, 2014 as the date of full implementation, dozens of provisions have already gone into effect, from free preventive care to expanded coverage for young adults to the closing of the Medicare prescription drug "donut hole" (you can read a comprehensive implementation timeline here if you're so inclined).

How many states are expanding Medicaid?

There is probably no provision of the ACA that will have a more immediate and profound impact on as many people's lives as the expansion of Medicaid. In the current system, each state determines how poor you have to be to become eligible for the joint federal-state program, but under the ACA anyone with an income up to 133 percent of the federal poverty level would be eligible. Unfortunately, the Supreme Court declared that states could refuse to accept the expansion, and many states dominated by Republicans couldn't wait to say "no" to Barack Obama and to their own poor citizens who desperately need insurance, even though the federal government will be picking up almost all of the tab.

The cruel irony is that many of the states refusing the expansion are those that have the largest proportion of poor people who could benefit, and are already the stingiest with Medicaid eligibility. For instance, in Texas, a working adult with children can't be covered in Medicaid if her income exceeds 25 percent of the poverty level. So a single mother with three children who makes over $5,888 a year is considered too wealthy to get Medicaid. In Alabama it's 23 percent; in Louisiana it's 24 percent. These are all states with high rates of poverty, and states where the Republican governors and legislatures have refused to accept the money the federal government is offering to expand Medicaid. In these states, if you're a middle-income person, you'll be able to get government subsidies through the new health-care exchanges, but if you're poor but not quite desperately poor enough to fall below the Scroogian eligibility limits, you'll get no help at all. These states have essentially cut off their noses to spite Barack Obama's face, giving up billions in federal money, a reduction in uncompensated care they end up paying for, and a healthier and more productive populace, all so they can give the finger to the President.

When you look at map of which states are accepting the Medicaid expansion, with just a few exceptions it looks a lot like an electoral college map, with Republican states saying no and Democratic states saying yes:

In just the last few weeks, Michigan has decided to accept the expansion, and Pennsylvania has proposed to take the federal money but use it to give low-income citizens private insurance (the Department of Health and Human Services has to approve such a plan). That will bring the total to 25 states plus the District of Columbia accepting the expansion, with another four (Indiana, Tennessee, Ohio, and New Hampshire) still debating the issue. After the Supreme Court's decision, many predicted that even Republican-dominated states would find the money the government is offering too good to pass up. So far it hasn't happened, meaning millions of poor Americans who live Republican states are out of luck. And you'll be shocked to learn that the poor in these states, mostly in the South, are disproportionately black.

What's up with the exchanges?

Setting up a health-care exchange requires time, effort, and some minimal level of concern for seeing your citizens be able to take advantage of the ACA's benefits. So it isn't surprising that nearly all the Republican states that said no to the Medicaid expansion also didn't choose to bother setting up their own exchange. In the end, 17 states (including D.C.) decided to do it themselves. Another nine are partnering with the federal government on an exchange, leaving 25 states that have left the process entirely to the federal government. This certainly makes HHS's job harder, but no one yet knows how well those federally-run exchanges will work. All of those 25 have Republican governors, legislatures, or in most cases, both.

One potential pitfall is that in many of those Republican-run states, the state government is taking active steps to sabotage the exchanges, particularly by making the work of the "navigators" as difficult as possible. These are local groups, like universities, hospitals, churches, and the like, who have gotten federal grants and training to help people find their way through the process of getting insurance through the exchange. For example, Georgia is forcing navigators to get special state licenses (the Republican state insurance commissioner pledged to do "everything in our power to be an obstructionist"); Florida has banned them from the grounds of state health facilities. It remains to be seen just how much of an impact the sabotage efforts will have.

Are my premiums going to go up?

The answer to that question can be summed up as 1) It's complicated, and 2) It depends. If like most people you get insurance through your employer (or your spouse's), things probably won't change for you. Your premiums have risen steadily in recent years, and in the short term, they'll probably continue to rise. Nevertheless, recent data show a dramatic slowdown in the rate of increase. Last year, premiums rose by 4 percent, half of the 8 percent per year average of the last decade. That mirrors a slowdown in overall health spending. In other words, that curve the ACA was designed to bend is already bending.

If you're now on the individual market (or uninsured) and you'll be buying insurance on the exchanges, how much you pay will depend on how old you are, where you live, what your income is, and what plan you choose. If you make less than 400 percent of the poverty level you'll get a subsidy so that your premium doesn't rise above a certain percentage of your income; if you want to try to figure out now what it would be, you can read this report to get an idea of what you might pay. While we can't make any sweeping statements that apply to everybody, there will certainly be a lot of people who find that insurance is more affordable than they thought. On Monday, the Department of Health and Human Services released a report showing that because of the subsidies, 6.4 million people would be able to buy insurance through the exchanges for less than $100 a month. As one Rand Corporation study concluded, "after accounting for tax credits, average out-of-pocket premium spending in the nongroup market is estimated to decline or remain unchanged." While there are some people who could pay more than they do now—say, young people who make too much to qualify for subsidies, used to have bare-bones insurance, and are now getting one of the more comprehensive plans available through an exchange—overall it doesn't appear that the threats of "rate shock" will be borne out.

How many people are going to get insurance who didn't have it before?

This is also a difficult question to answer precisely, because there are a few unknowns. First, over time more states could accept the Medicaid expansion, increasing the number of newly insured people. Second, the fines for those who choose not to carry insurance are quite small, so some people (particularly the young, who are immortal and never get sick) could decide that it's better to pay a fine that costs less than insurance does, but nobody knows how many of them will. Third, each state will be doing its own outreach to sign people up for the exchanges and for Medicaid; some will inevitably do a better job than others.

All of those variables make precise estimates difficult. One National Bureau of Economic Research experiment to see how uninsured people respond to the cost of getting covered concluded that "75 percent of the uninsured are projected to enroll, implying that 39 million individuals would gain coverage as a result of the law." The Congressional Budget Office, on the other hand, projects that the ACA will reduce the ranks of the uninsured by 25 million. One thing we can say is that though tens of millions will probably become newly insured, there will still be millions of uninsured people in America. One of the main tasks in coming years will be getting that number as close to zero as we can.

Are there going to be terrible effects on the economy?

If you've been paying attention to health-care news, you've probably seen stories featuring an employer who has 49 employees and says he'd love to hire more people, but since Obamacare's employer mandate kicks in at 50 employees and he'd have to offer health coverage if he hired anybody else, he won't do it. It's quite remarkable how reporters always seem to find that business with just under 50 employees (my suspicion is that the National Federation of Independent Business, a conservative small-business group, finds them, recruits them, and passes them along to journalists). But the truth is that they're extremely rare. According to the Kaiser Family Foundation, 93 percent of companies that size already offer health benefits, even before the law's requirements kick in. And the administration has delayed the employer mandate by a year anyway.

Another charge is that employers everywhere are cutting employees' hours below 30 per week, the level at which the mandate will eventually kick in, so they don't qualify as full-time. While there are certainly employers who have done this, there's little evidence it's happening on a large scale. The number of workers just below that 30-hour cutoff is tiny to begin with and didn't increase as the original date for the mandate approached. If employers were rushing to cut workers' hours, those numbers would be large and growing; instead, the opposite is true.

You could condemn an employer who figures out a way to avoid giving her workers health benefits, even if not all of them are as repulsive as John Schnatter, the CEO of Papa John's, who whined that if he had to give his employees health coverage it could raise the price of a pizza by as much as a shocking 14 cents. But one of the main things the ACA was meant to accomplish was to make those employer decisions less damaging to employees. "Job lock," where you're forced to keep a job you'd rather leave in order to hold on to your insurance, will be a thing of the past. And now that affordable insurance will be available to anyone regardless of whether they've been sick before, employers can decide to drop insurance without necessarily hurting their employees.

To see how, consider this story. Last week, Trader Joe's announced that it would no longer be offering coverage for its employees who work less than 30 hours per week. Instead, it will give them $500 and send them to the exchanges. This seemed surprising, since Trader Joe's is known for being an employee-friendly company. But as the company argues pretty persuasively, employees at that level are likely to get a better deal through an exchange than through their company policy when subsidies are factored in (and of course, the company will save money). We might see this pattern repeated with other employers. But would that be a bad thing? If an employee gets equivalent coverage for less money on an exchange, then they've effectively gotten a raise. Companies save money, which allows them to either raise salaries or hire more people. On the other hand, there is a cost to the federal budget of more people getting subsidies, but that may be a cost we're willing to pay. It may be some time before we know how common an occurrence this is and what effect it's having on the economy and the budget.

Is Obamacare going to make doctors quiz me about who I'm sleeping with?

Here's a good tip: if you read a story with a crazy new allegation about what the Affordable Care Act is going to do to you, there's a good chance two things are true. First, it's false. Second, Betsy McCaughey probably had something to do with it. She's the woman who gave us "death panels," and her latest bit of crazy is to try to convince you that because of Obamacare, doctors are suddenly being forced to ask you inappropriate questions about your sex life (this is a pattern you'll become familiar with: she takes an ordinary feature of health care, like the fact that questions about sex are standard practice when taking a medical history, and makes it sound both sinister and a product of Obamacare). You can decide whether this kind of thing is just silly or pernicious and generally despicable (I lean toward the latter), but don't be surprised if we see a whole round of new allegations like this one. Conservatives failed to stop the ACA from being passed into law, then failed to get it overturned in the Supreme Court, then failed to win the election that would have allowed them to repeal it. They will almost certainly get increasingly desperate after January 1st when the law is implemented and we don't all suddenly find ourselves standing in breadlines wearing gray sackcloth, our spirits broken by the socialist hellhole into which we've descended. So who knows what they'll come up with.

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