From The New York Times, By JOHN HARWOOD, April 29, 2013 –
“Young adults on parents’ plan pay more,” said the organization, the YG Network, citing a new employee benefits study. The e-mail’s subject line read “So Much for Popularity.”
Actually, the study did not show those young adults were paying more. It showed insurance companies were, because they had begun providing health coverage to those young adults, as called for under the law.
The missive, inaccurate though it was, illustrates the immense challenge facing the Obama administration as it puts in place the most significant parts of the 2010 law. Few government initiatives reach so many corners of the American economy and society — and have as much potential to generate trouble for the party in the White House.
Among the complex imperatives: pushing reluctant states to set up insurance marketplaces and expand Medicaid programs, keeping an eye on insurance companies as they issue new rate schedules, measuring the law’s effects on small-business hiring, and coaxing healthy young people to buy coverage so the system works economically for everyone else.
Gail Wilensky, who ran Medicare and Medicaid under President George Bush and supports the new law, said that 2014, when the law will make it mandatory to have insurance, “is going to be quite a bumpy year.”
Austan Goolsbee, a former chief economist to Mr. Obama, predicted “a big messaging headache the whole year.”
A new example popped up last week, to the delight of Republican opponents of the law. An article by Politico reported “high-level confidential talks about exempting lawmakers and Capitol Hill aides” from the health law.
In fact, lawmakers said, the talks the article referred to concerned preserving the same kind of employer-subsidized health coverage for Congressional employees that workers at private companies can receive under the law. Yet the article sent White House aides and other Democrats scrambling to avoid the appearance of special treatment.
The law poses some modest potential headaches for the overall economy.
It requires, for example, that businesses with 50 or more full-time workers either offer insurance coverage or pay a penalty. Mr. Goolsbee said he would be watching whether companies around that threshold either defer hiring or shift some full-time workers to part-time jobs.
But the number of such companies is small. A vast majority of American workers are employed by larger companies that already offer coverage.
Some younger health care customers will face a significant increase in their insurance premiums, said Karen Ignagni, who leads a major health insurance trade group. That is because the law requires more comprehensive coverage than many of them now have and curbs insurers’ ability to charge more for older customers, who tend to consume more services.
Yet those increases may be offset by subsidies available to lower-income customers and, for women, by rules barring insurers from charging women more.
Most significant is that those increases apply only to the small fraction of Americans who buy health insurance individually.
N. Gregory Mankiw, a Harvard economist who advised Mitt Romney’s 2012 presidential campaign, fears that some lower-income job holders will work less under the law, since their government-financed insurance subsidies will phase out at higher earning levels. But he acknowledged that it was an “open question” how large those effects would be.
Not large, White House economists say. And to the extent that they do happen, they would be offset by reduced marginal tax rates for others who, under current law, lose their Medicaid health coverage as they earn higher incomes.
The law’s supporters also predict that workers with better health care will be more productive. Expanded coverage may ease the “job lock” that now prevents some workers from seeking better employment for fear of losing coverage.
Uncertainty over the law’s future hung over employers and investors throughout 2012. “It impeded the recovery,” said the economist Mark Zandi.
But last June, the Supreme Court upheld the core of the law, and in November Mr. Obama won re-election. Going forward, Mr. Zandi said, “it’s prudent at this point to think it’s all going to be a wash.”
That will not, however, ease pressure on administration officials over a gantlet of hurdles to put the provisions in place.
Fewer than half of the states have indicated that they plan to establish their own health care marketplaces, known as exchanges under the law. Washington is committed to stepping in and establishing them for states that decline to.
Only about half of the states have indicated that they will expand Medicaid under the law, a central ingredient for the goal of providing coverage to those now uninsured. Some people who acquire insurance under the law may have trouble obtaining treatment, because of a shortage of doctors and state-level “scope of practice” laws restricting the ability of others like nurse practitioners to step in.
Most challenging of all is persuading young, healthy Americans — the most profitable customers for insurance companies — to buy their “mandated” coverage next year, even though the penalty for not doing so is a modest $95. White House officials say this group’s participation in health insurance marketplaces is vital to their success because it will offset the cost of less-healthy customers.
The political stakes in meeting these challenges are circumscribed by the long, acrimonious debate that has occurred in the nation’s polarized political culture. White House strategists estimate that 9 in 10 Americans have fixed views one way or the other. They say that only personal experience with the law can move them.
Yet efforts to reach the small group of undecideds will only increase as the 2014 midterm elections draw closer. Ian Prior, a spokesman for the House Republicans’ campaign committee, vowed that his party’s candidates would keep hammering away at Democratic incumbents who supported the law.
“I don’t think the American people want to go back,” said Representative Steve Israel of New York, who is the chairman of the House Democrats’ committee. But Democrats say they cannot afford to be passive.
“We already know that, left to its own devices, this doesn’t end up in a good place,” said Mark Mellman, a Democratic pollster. “Anyone who thinks this issue is done is fooling themselves.”