Who’s in Charge Here: What Obamacare Is (or Was?)

FILE - In this Oct. 24, 2016, file photo, the HealthCare.gov 2017 web site home page as seen in Washington. President-elect Donald Trump says he wants to preserve health insurance coverage even as he pursues repeal of the Obama-era overhaul that provided it to millions of uninsured people. How his administration handles a pending lawsuit over billions of dollars in insurance subsidies will reveal whether Trump wants an orderly transition to a Republican-designed system or if he’d push “Obamacare” over a cliff. Stripping away the subsidies at issue in the case would put the program into a free-fall. (AP Photo/Pablo Martinez Monsivais, File)

[This is the first post in (at least) a two-part series. This week, a review of Obamacare; next week, a review of the House’s recent reform bill.]

Last week’s controversial vote in the House of Representatives was not a death blow for Obamacare. (Even if the President and his fellow Republicans celebrated like it was.) Instead, the House passage of the American Health Care Act (AHCA) of 2017 is just the first step in a long road for Republicans. The Senate will next take up the bill, and it’s not clear what they will do with it – modify it, start from scratch, or reject change entirely in favor of the status quo.

But while that process gets underway, it’s worth taking a look back at the source of all this fuss: Obamacare itself. What is it? (Or was it, if it does go away?) What does it do, or try to do? And why would we get rid of it?

First things first: definitions. “Obamacare” is the name Republicans (and, eventually, Democrats) gave to the landmark Patient Protection and Affordable Care Act passed by Congress in 2010. So just to be clear, the “Affordable Care Act” and “ACA” are the same thing as “Obamacare.” (Not everyone gets this.) To make it more confusing, the original ACA was amended a week later by the Health Care and Education Reconciliation Act for procedural reasons having to do with the Senate rules about the filibuster and the requirements of budget reconciliation, which enable Senators to avoid filibusters but only because pure budget measures require Zzzzzzzzzzz.  …. OK, fine, let’s just call it the ACA or Obamacare and be done with it.

Obamacare was not just a single reform; instead, it combined a bunch of different efforts to make health care coverage available to more Americans and, supposedly, to lower costs. As a result, it’s difficult for even experts to explain what it does. But I’m going to try anyway.

Here are 7 big things that Obamacare did to change the healthcare system:

Kids covered to 26. Young people can stay on their parent’s health plan until they turn 26. Before Obamacare, most private insurers would kick kids off of parents’ plans once they turned 21. As Patrick DeHahn wrote in USA Today in January, “This provision comes in handy for many young people with parents who have family insurance as they navigate college, graduate school, entry-level jobs and more.”

Sick people get coverage. Private insurance companies can no longer turn customers away for dreaded “pre-existing conditions” – that is, being sick. The pre-ACA world was filled with horror stories of insurance companies refusing to cover sick people or, in some cases, pregnant women. Insurance companies are profit-driven corporations, so it’s understandable they would want to control costs; but this meant that a cancer victim would find it exceedingly difficult to buy individual insurance. No more; Obamacare essentially forces insurance companies to take all comers, no matter what health conditions they may live with.

No more crappy plans. Insurance companies are forced to offer only plans that provide decent coverage. This is the secret behind Obama’s famous lie, “If you like your health care plan, you can keep it.” Whoops – it turned out that thousands of Americans found their plans “canceled” by ACA regulations. But that’s because those plans offered very little in the way of actual coverage. People liked these bargain plans if they were lucky enough not to get sick. But if they did suffer a serious injury or illness, they found out they were paying for plans that didn’t cover very much or had tight caps on daily or annual costs. Mother Jones’ Stephanie Mencimer wrote in 2013 that Obama should have said, “Those of you who obtain insurance on the individual market can keep your plans… unless it’s the sort of rip-off plan the ACA will forbid.” Obamacare requires insurance plans to cover basic health care needs – what the ACA calls “essential benefits” – and prevents insurers from charging co-pays for preventative care or placing lifetime or annual caps on benefits. (This may reduce bankruptcies from medical debt, although the underlying numbers are fuzzy.)

Businesses must offer insurance. Recognizing that most Americans gain health coverage through their employers, the ACA requires businesses with 50 or more employees to offer health insurance as part of their benefits package. Of course, most large companies were already doing so; but the law forced medium-sized businesses to decide whether to subsidize healthcare for their employees or pay the government a fine. (Overall, business opinion on the ACA is somewhat mixed; some businesses and entrepreneurs are big fans, while the National Federation of Independent Businesses took the law to court – and lost.)

You must buy coverage. Probably the most controversial measure of Obamacare is the “individual mandate” – the requirement that most people sign up for health coverage or pay a fine. (Or a “tax,” as the Supreme Court called it to justify its constitutionality. Whatever you say, gang.) No one was really keen on this provision, but this is the carrot offered to the insurance companies to make up for the “pre-existing condition” stick. If the government was going to require insurers to cover more sick people, the companies wanted more healthy people to make up for it. That’s how insurance works, whether for healthcare or fire or flood: people who don’t actually suffer the costs of whatever risk you’re insuring pay for those who do.

You can also look at it this way: the law forces people who might gamble on their health to play it safe. Sure, you could be a healthy individual who ends up “overpaying” for health coverage that you don’t use. But what happens if next week you come down with cancer or get hit by a bus? Forcing you to protect yourself is paternalistic, sure. But that’s why we have seatbelt laws.

New healthcare markets. The other Obamacare provision that receives the most attention is the establishment of “exchanges,” or online marketplaces where individuals and businesses can purchase coverage from private insurers. (Another carrot for insurance companies – the government makes it easier for people to become their customers.) The idea here is to expand access to private insurance for individuals, for whom insurance coverage was often prohibitively expensive. Before Obamacare, insurance companies were likely to offer lower prices only to large companies, who promised a steady stream of customers. Exchanges provide a similar stream, while the government also subsidizes the cost for low-income people. The ACA authors also hoped that by divorcing health coverage from employment, they could stimulate the economy as workers sought opportunities without being tied to their benefits.

The original plan was for each state to set up its own exchange, but only about a dozen did so; instead, most individuals buy insurance through the nationally-run exchange at healthcare.gov. While the website launch was famously a complete disaster, it’s worked just fine since then, and almost 9 million people used the national exchange last year to get health coverage.

Expanded Medicaid coverage. Obamacare made it possible for states to expand the number of people covered by Medicaid, the government program that provides healthcare for low-income people. (Just to clarify: that’s different from Medicare, the government healthcare program for the elderly.) About half the states did so, with another half-dozen trying to join them. Virginia’s General Assembly has refused to consider it, over the Governor’s objections.

Obamacare has a number of other provisions in it, from the imposition of new taxes on insurance companies and medical device manufacturers (to help pay for the program) to change how Medicare payments are made. But these 7 are the big ticket items.

The result? Certainly, the law has reduced the number of uninsured Americans by the millions (although the exact number is hard to pin down). But moving the needle that far costs money, and many Republicans argue that it’s not worth it – or, presumably, that they can get better results with other policies. But now at least you know what it is they want to “repeal and replace.”

Next week we’ll look at their proposed alternative. Spoiler alert: it’s not pretty.

This is a developing story. Stay with 8News online and on air for the latest updates.

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