Opinion

Coming to Terms With “Repeal and Replace”

I am one of the 20 million or so Americans who obtains health insurance under the provisions of the Affordable Care Act, also known as Obamacare.

The debates about Obamacare – from left and right – take on a surreal tone at times.  It is clear from the tone and content of the debate that many of Obamacare’s fiercest opponents and most ardent proponents a)  do not buy or receive coverage via Obamacare and b) have no idea what the law really is or what it does to (or for) the U.S. healthcare system.

The first thing to keep in mind is that Obamacare affects a relatively small number of people.  The 20 million or so covered represent a little more than six percent of the U.S. population.  The vast majority of Americans still receive coverage through their employers or through other government programs such as Medicare.

The second thing to keep in mind is that Obamacare is really three programs in one.  The first and most successful program is a large-scale expansion of Medicaid.  About 11 million people previously ineligible for Medicaid are now eligible, thanks to the expansion of eligibility requirements in most states and to the “woodworking effect” of people seeking ACA coverage and being channeled to Medicaid.

The merits or demerits of Medicaid – and its long-term solvency – are another matter.  Those receiving it under ACA get basic health insurance coverage for free.  It will be (and should be) politically impossible to take this coverage away from the recipients.

The second part of Obamacare is the addition of two to three million people under the age of 26 to their parents’ health care policies.  This, too, is popular (perhaps not with the parents who pay for the coverage) and, most likely, politically untouchable.  President-elect Trump has indicated he supports this part of ACA and there is no evident political will to change it.

The third part is the “marketplace”.  Here is where the trouble begins.  People buying insurance through state or Federal exchanges do so because they are self-employed or work for small companies that do not offer health care benefits.  If those people make less than about $90,000 per year, ACA subsidizes the cost of their policies – at least to some extent – through tax credits.  According to healthcare.gov, more than 85 percent of people in the ACA marketplace receive such subsidies.

That sounds like a pretty good deal, and for many people it is.  The available policies, however, are, well, awful.  They combine sky-high deductibles with severely limited choices, and they get worse, not better, every year, as more and more insurers exit the ACA marketplace.  That is why so many people who sign up for Obamacare through the exchanges wind up dropping their policies within a few months.

Then there are the real ACA losers – people like me who make too much to receive a subsidy, yet are forced to buy a “compliant” policy.  Last year, my wife and I paid about $13,000 for a policy which entitled us to two doctor visits each and which carried a $6,400 deductible.  Since our combined medical expenses were about $3,500, we shelled out over $16,000 for health care costs last year.  That, to put it mildly, did not help the budgeting process, nor did it endear the architects of Obamacare to me.

What Obamacare has given us, essentially, is catastrophic health insurance, priced like a “real” health insurance but with almost none of the benefits. To put it bluntly, this is awful, and we hate it.

By my calculations, there are only about 2 million non-subsidized people in the marketplace, but we are the source of all of the horror stories about Obamacare, and we are the people who most fervently wish to see it repealed and replaced.  I, personally, would like the freedom to buy a true catastrophic policy (costing much less than our current policy) and to use the savings to pay for health care costs as they arise.  As it is currently designed, Obamacare specifically forbids us from doing so.

The ACA is famously complex and unwieldy, but it provides a real benefit to at least 15 million people.  I do not think it was designed to do so by screwing over people like me, but I might be wrong.  The challenge for those proposing to “repeal and replace” ACA should be to find a way to get coverage for those who need it while getting Obamacare’s heavy foot off the necks of those who neither need nor want it.