With the three-month Obamacare open enrollment period starting Nov. 1, now is a good time to assess the healthcare law.
It’s been two years since the Obamacare health insurance exchanges first opened for business. And the track record of the law so far isn’t terribly impressive.
Some of Obamacare is working. But some parts of the Affordable Care Act (the formal name of the healthcare law) have not worked as intended, and some are simply failing altogether.
It got off to a disastrous start, as the federally run healthcare.gov website famously failed, making it difficult or impossible for hundreds of thousands of people to sign up for coverage. It took several frantic months to iron out all the issues.
Two years later, the Obamacare website is working fine. But you can't say the same about most of the rest of the law.
Let's look at how Obamacare is working, piece by piece...
Is Obamacare Working? Covering the Uninsured
The primary goal of the ACA was to make affordable healthcare insurance available to America's 45 million uninsured. Here significant progress has been made, although not as much as had been hoped.
According to the National Health Interview Survey, the percentage of uninsured has dropped from 14.4% in 2013 to 9.2% in the first quarter of 2015. That means about 16 million Americans have gained healthcare coverage in the past two years. But 29 million people still lack coverage.
Most of those, about 14.1 million, gained coverage by signing up for an Obamacare plan via healthcare.gov or one of the state-based insurance exchanges. The rest, about 2.3 million, were young adults under age 26 who became eligible for coverage under their parents' health insurance.
Overall, we're looking at a 35% decrease in the number of uninsured, the biggest drop since 1965, when the Medicare and Medicaid programs launched.
This is Obamacare's chief success, though it has some way to go. Grade: B+
Things go downhill from here, though...
Is Obamacare Working? Making Coverage Affordable
This very much depends on who you are. The poorest Americans - those making up to 133% of the poverty line - are eligible for free care under Medicaid.
Those who make a little more, up to 400% of the poverty line, can get federal subsidies to help pay their health insurance premiums. But for some families, paying the premiums is still stretch. A part of Obamacare designed to help such families, the Basic Health Program, is still awaiting the finalization of regulations. States wishing to set up a BHP will have to wait at least another year.
The situation is quite different for the middle class. A survey by health insurance research firm HealthPocket found that Obamacare premiums for 2016 are rising, from 9% for the low-end Bronze plans to 16% for Gold plans.
But the range is huge. In four states, insurers have proposed increases of at least 70%. And a few will see small, single-digit increases. But most rates will be going up, and many consumers will be shocked. It must be noted that President Obama promised a reduction in premium costs when the law was passed.
Employer-sponsored plans, meanwhile, must also comply with Obamacare rules. Because insurers must cover everyone - no more exclusions for pre-existing conditions under the ACA -the total costs need to be spread out to the healthier patients.
Premiums in employer-sponsored plans are expected to rise a modest 5%. The increases would be higher but for the rise in deductibles.
Higher deductibles make the premiums of both Obamacare plans and employer-sponsored plans more affordable. But consumers end up paying more.
According to a new Kaiser Family Foundation study, the average deductible for employer-sponsored plans is up 67% since 2010, rising from $646 to $1,077. That's on top of the average family annual premium of $4,955.
Meanwhile, the median U.S household income has dropped from a high of $57,357 in 2007 to $53,657 in 2014.
The financial pressure has some families opting for less medical care - the opposite of what the ACA intended.
While Obamacare has made healthcare more affordable to the poorest Americans, those in the middle are getting badly squeezed. Grade: C-
Is Obamacare Working? Creating a Thriving Insurance Market
The creation of health insurance exchanges was supposed to create a marketplace that would give consumers more choices and better prices.
That's happened in some larger states like New York. But many states only have a handful of insurers, reducing competition. And those states tend to be the ones seeing the highest rate increases.
A study by the Heritage Foundation in January found that one-third of U.S. counties had only one or two insurers to choose from in their healthcare exchange. Another quarter had just three. Overall, Heritage found, competition fell by 21.5% after the Obamacare exchanges went live in 2013.
More ominous is the shakiness of the 23 nonprofit "health co-ops" created by Obamacare to ensure choices for health insurance apart from the big insurance companies.
In August, The New York Times reported that 22 of the health co-ops lost money last year. Three have already gone belly up, and last week a fourth, Health Republic Insurance of New York, announced it will shut down.
This situation could improve as insurers get a better handle on the risk pool and figure out how to tailor their products and pricing to the market. But so far, competition in the exchanges has failed to work as planned. Grade: D
Is Obamacare Working? Improving Access to Care
Another key goal of the ACA was to make sure more people had access to medical care.
For the poor who before had to resort to hospital emergency rooms, Obamacare has made things better. But it's a flawed solution.
You see, about 70% of the poor covered though Obamacare are covered via Medicaid. And because Medicaid reimburses at lower rates than other insurers, many doctors resist taking on Medicaid patients. According to a 2014 Merritt Hawkins study, 55% of doctors refuse new Medicaid patients.
And as we've already seen, middle class Americans are increasingly electing to use less health care to save money.
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What's more, another way Obamacare insurance plans save money is by limiting the network of doctors you can use. That often makes it harder to find care. Some of those on Obamacare plans have found nearby facilities won't accept their insurance, forcing them to drive long distances.
A McKinsey study last year found that 68% of Obamacare plans used such narrow provider networks, a number that is expected to grow as insurers seek to keep a lid on costs.
Unless changes are made to the ACA law, access to healthcare for all Americans will continue to shrink. Grade: F
Republican Alternatives to Obamacare: From the time the ACA legislation appeared in 2009, Republicans have opposed it. Since it became law, many GOP legislators have vowed to "repeal and replace" it. But do these plans have a chance? Take a look at what two Republican lawmakers have proposed, and decide for yourself...
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.