Reflecting on Six Years of Obamacare


The Affordable Care Act was signed into law by President Barack Obama on March 23, 2010 and last week the White House declared it a victory. Obama proudly declared that the rate of uninsured Americans is at its lowest point since we began keeping record. Taken at face value it seems that with the law, the president achieved a historic accomplishment. However, the details of the law's enrollment numbers reveal a different reality.

Obamacare has many successful parts. The protection for individuals with preexisting conditions was even supported by Donald Trump during a recent Republican debate. The expansion of Medicaid is another great aspect of the law. Bernie Sanders is attempting to go further with Medicare for all, an idea that was championed by Ted Kennedy throughout his entire career. But, the mandate is a failure and never should have been part of the law.

I have written before about how I have been against the mandate since having experience with it in Massachusetts. Critics of the law point out that even with government subsidies some people just can't afford to purchase health insurance. In 2008 during the Democratic primary Obama criticized Hillary Clinton's call for a federal health insurance mandate. He argued that fining people who already can't afford to pay for health insurance is double jeopardy -- they cannot afford the insurance and now also cannot afford the fine. He also argued against the idea of sending people to jail for not paying their fines, a possibility under the law.

And, he was right to raise those concerns. Plenty of people have demonstrated that they can not afford health insurance. Obamacare's enrollment numbers through the exchanges reveal this. Exchange enrollment is lower than the Congressional Budget Office estimated by around eight million people. Additionally, a large share of Americans are signing up for health coverage through the exchanges and then not staying current with their premium payments through the end of the year. In 2015 11.7 million people were signed up for health insurance through the exchanges at the beginning of the year. Only 8.8 million still had health insurance coverage at the end of the year -- a 25 percent decline.

Obama's plan for health care in 2008 called for the federal government to offer health insurance subsidies without a mandate to purchase insurance for adults. This plan was much more market driven and offered Americans the opportunity to buy insurance if they wanted it and found it useful, but they were not forced to do so if they didn't want it or couldn't afford it. And, we have found that a lot of people either do not want insurance or can not afford insurance even with the federal subsidy.

Aside from the affordability question, The New York Times reported that a large share of people who purchased health insurance through the exchanges found that the deductibles for their plan are so high that the insurance is useless. And, considering affordability, in 2016 premiums went up at an average rate of 10 percent across the United States. So, people who were having problems affording coverage in 2015 will certainly not be able to afford coverage this year.

A smart first step in improving Obamacare would be to dump the mandate. I would also add that since the law was proposed it has been missing a key aspect of controlling health insurance costs -- a cap on insurance premium increases, making it a boondoggle for insurance companies. Obamacare has not and may not ever actually achieve universal coverage, a flaw that calls into question its prudence. I know many Democrats do not want to refight the battle over passing a health care bill, especially considering that Republicans currently control both houses of Congress. But, if the makeup of Congress does change, they should immediately consider replacing Obamacare with a better law. Bernie Sanders' "Medicare for All" proposal is an idea with strong Democratic bonafides. If given the chance, Congress should pass it into law to replace the Affordable Care Act.