Obamacare’s trade-offs left too many Americans feeling like they got a raw deal

In a recent column for the Rural Health News Service I told the story of 62-year-old Lori Eng, an office manager in rural Nebraska who earns less than $20,000 a year and has received heavily subsidized Obamacare policies. She wanted me to know how much the Affordable Care Act had helped her. She had breast cancer treatment in 2015, and her coverage paid for it. Eng needs insurance, but like the rest of us she has seen her carriers require higher and higher out-of-pocket spending before they pay a dime. “I’m hanging on by my toenails until I get Medicare,” she said. 

After the column appeared, emails showed up from others who resented the help Eng had received. Their anger speaks to the division in the country over Obamacare and foreshadows the struggles ahead to save or scrap it. Last week the Senate took the first step by paving the way for a budget resolution that would allow Republicans to repeal major provisions of the law without facing a filibuster.

One 55-year-old Indiana woman said she and her self-employed husband buy their own insurance and are not eligible for subsidies — half of those buying in the individual market are not. With only one insurer to choose from this year, they bought the cheapest bronze level policy, with a $5,000 deductible and a monthly premium of $1,808 — more than their mortgage. “Do the math,” she said. “We must pay $21,696 a year for crap coverage.” A bronze plan requires them to pay 40 percent of their medical costs. “How much more than $21,000 can we expect to pay next year?” she asked. “The Affordable Care Act is a bitter joke for us.”

A 35-year-old mom with four kids and a “hard-working husband,” as she put it, told me, “We have high deductibles and at times have been close to meeting them.” One year, premiums and cost-sharing expenses meant the family had to pay more than $20,000 out of pocket, “thanks to Obamacare,” she said. What really upset her, though, was a belief her family was paying for Eng’s health care while they had a hard time paying for their own. Why should people spend a lot of money and “many years going to college to get a good degree to make more money only to be penalized for our hard work to pay for someone else’s insurance,” she wanted to know.

An Illinois man who also wrote to me echoed their sentiment. “The ACA took 20 million people and threw them all on one boat, giving most of them a free ride — medical care and subsidies. Anything free is abused,” he said. The 16 million people in the individual market who paid for their ticket got nothing and now have to bail the others out, he wrote.

The public discourse did not make it clear that all Americans did not have an equal stake in the outcome. Most already had insurance and wouldn’t be helped by the subsidies and other benefits bestowed on those who didn’t. 

Their comments speak to the failures of the national conversation during the run-up to Obamacare. In particular, the discourse did not dwell on who would benefit, who would not benefit, and why, and it failed to zoom in on what the law really was. At its core, it’s a welfare program much like food stamps and Medicaid with generous subsidies going to the uninsured with the lowest incomes, smaller subsidies going to those with middling incomes, and very little going to families with incomes over the line. It’s more akin to Medicaid than Medicare, a social insurance program. That reality is suddenly hitting home and has fueled the backlash from Americans like those who sent me angry emails. 

The public discourse did not make it clear that all Americans did not have an equal stake in the outcome. Most already had insurance and wouldn’t be helped by the subsidies and other benefits bestowed on those who didn’t. Obamacare was not universal health insurance with everyone in the system, like Medicare, which makes it possible to cover very old and very sick people at a more reasonable cost. With Medicare, everyone has a stake in its success. People who pay into Medicare when they are young and likely in good health have a right to covered health care at age 65 and beyond when they do get sick. There’s a cross subsidization going on among millions of people, over a lifetime of work and retirement. But Obamacare always envisioned some 30 million people would be outside the system, and instead of one big risk pool, there were hundreds of smaller risk pools, with each private insurer creating its own. Insurers were counting on lots of younger, healthier people to sign up and balance out older and sicker enrollees. When those young people didn’t materialize, premiums rose quickly for those left in the pool, and the backlash escalated. 

Nor did the discourse at the time produce a robust discussion of cost containment, Obamacare’s Achilles heel. Absent from the law were few serious remedies to control costs. Affordability of both insurance and medical care would eventually become a big problem. Instead, the public discourse was built on slogans like “affordable quality health care for all” and false promises that families would save up to $2,500 on their premiums. High out-of-pocket spending limits, now a burden for middle-income families, were not part of the conversation. Few politicians told these families they’d have to bear much of the burden for controlling medical inflation by paying more out of pocket for their care on the theory they’d use less of it. The idea was to curb unnecessary care and thereby cause the national health care tab to drop. That skin-in-the game approach is now pinching their pocketbooks. Oregon Sen. Ron Wyden, a Democrat, told me at the time, “If you don’t have cost containment, you can’t get affordability,” but few members of Congress or the press wanted to hear that. Wyden was prescient. “There’s no question that under the bill underinsurance will remain a very substantial problem,” he said. 

There’s a danger the public discussion over “repeal and replace” won’t be much different from what it was the first time around, with each side duking it out in a messaging war that obscures the issues both small and large. So far the discussion in the news media has revolved around the question: Will or can there be repeal without replacement? The discourse has been peppered with individual stories about people being helped by the law and oodles of nationwide data from think tanks estimating that tens of millions would lose coverage under Republican plans. There’s no shortage of individual pleas like this from Robert Greenstein, the head of the Center on Budget and Policy Priorities: “Do we really want to increase hardship for tens of millions of low-income people even as we shower tax cuts on people at the top?” Greenstein wrote in a Washington Post op-ed.

What’s really needed now is political and media leadership that moves the country’s thinking beyond the reams of think-tank data and comments like, “Why do I have to pay for someone else’s insurance?” The discourse must change if all Americans are to have health insurance someday.

On a program Friday on California’s KALW that explored media coverage of repeal, one commentator told listeners, “I have so many questions about this. Who’s getting a raw deal? What are the specifics? There’s been no discussion about what the replacement will be,” he argued, laying much of the blame on “the poor quality of the politics.” He’s right, of course. Media follows politics, and the national conversation has yet to center on the trade-offs warring sides will ultimately be forced to make as legislation moves ahead. That’s what really matters. Will the minimum set of benefits required by Obamacare policies be junked? Will insurers be able to charge older people five times more than younger ones to coax more 30-somethings into their risk pools?

What’s really needed now is political and media leadership that moves the country’s thinking beyond the reams of think-tank data and comments like “Why do I have to pay for someone else’s insurance?” The discourse must change if all Americans are to have health insurance someday. When former Washington Post reporter Tom Reid was leading a ballot initiative to bring a single-payer system to Colorado this fall, he tried to inject into the discourse the notion that everyone is in this together. Coloradans disagreed and rejected the proposal. It’s a distributional ethic, Reid explained before the vote. For any goods or services, there needs to be a way to distribute them. If the U.S. is ever to achieve real universal health coverage, then we’re going to have to all join the insurance pool together. Until our discourse embraces that concept of shared risk, we’ll continue to have large numbers of uninsured Americans.

Veteran health care journalist Trudy Lieberman is contributing editor of the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care blog.