The federal enrollment period for the Affordable Care Act has reopened for three months, by order of President Biden. That will give those Americans who lost their employer-based coverage during the pandemic until May 15 to purchase new policies on HealthCare.gov. (States with their own insurance exchanges may have shorter enrollment periods.) But for the 10-year-old law to work well and live up to its full promise, it will need some serious improvements.
In some ways, it’s a wonder the law functions at all, given the long assault the Republican Party has waged on President Barack Obama’s signature achievement. Those destructive efforts reached an apogee under President Donald Trump, who did his best to undermine a law he was unable to repeal.
But Obamacare outlived the Trump era. And now, with Biden in the White House and Democrats in control of Congress, it’s time to repair the landmark law, under which some 20 million Americans are covered.
Some fixes are basic, like doing the outreach to enroll Americans for whom the existing law should be adequate. The Kaiser Family Foundation estimates that approximately 4 million people without coverage would qualify for a subsidy large enough to make a lowest-tier, or bronze, ACA plan premium-free, or render a more comprehensive silver plan a reasonable deal. (Another 4.9 million who are currently uncovered qualify for subsidies to help them buy insurance at reduced cost on the exchanges.)
Larry Levitt, executive vice president for health policy at Kaiser, says the Trump administration cut ACA outreach efforts by some 90 percent, leaving more than $1 billion in administrative funds unspent. Part of the solution there, obviously, is a robust outreach effort to those millions of people.
But the problem isn’t just a lack of information. There are also real affordability issues.
“Costs are too high for a lot of people who are going through the exchanges,” says Philip Johnston, former regional administrator of the US Department of Health and Human Services. “Even though they are subsidized, they are not subsidized enough.”
There’s a reason for that, notes John McDonough, a professor of public health at the Harvard T.H. Chan School of Public Health, who worked as a health policy aide for Senator Edward M. Kennedy and, after Kennedy’s death, for Senator Tom Harkin, during the law’s design and passage. At the time, he says, Democrats were under strict directives to keep the 10-year cost of the law at $1 trillion. That led to health insurance purchasing subsidies (premium tax credits, in ACA parlance) that were too low and phased out too soon. Those subsidies currently end at 400 percent of the federal poverty level, or $51,040 for an individual, $104,800 for a family of four.
One part of the solution there is pretty simple: Increase the financial assistance the ACA provides. In an ideal world, that should be an easy-to-agree-on fix. Biden’s plan calls for capping premium costs at 8.5 percent of personal income. MIT economist Jonathan Gruber, an expert on the ACA, has proposed several ways to improve on that, by both increasing subsidies and hiking cost-sharing payments that help with out-of-pocket expenses — that is, copayments and deductibles.
Right now, for example, 40 percent of those making between 200 and 250 percent of the federal poverty level spend more than 10 percent of their income on premiums plus out-of-pocket expenses, while almost a fifth are paying more than 15 percent of their income on those expenses. The number of people with relatively high costs also spikes as subsidies phase down and end, which occurs at income levels of 300 to 400 percent of poverty.
Biden’s plan helps, but because it is focused mostly on premium costs and not out-of-pocket expenses, it doesn’t reduce total health care costs for individuals and families as much as necessary, Gruber says. By making exchange plans for those up to 200 percent of poverty premium-free (and thereby pushing the entire subsidy schedule up the income ladder) and extending the cost-sharing formula that applies at 150 percent of poverty up to 300 percent, you can significantly reduce the burden on moderate-income ranges. Under that arrangement, only about 5 percent of those with incomes at 200 to 300 percent of poverty would spend more than 15 percent of their income on health care, while only about one-quarter would spend more than 10 percent.
None of this can be done on the cheap, but neither is it prohibitively expensive. For a rough idea, Biden’s health care plans, exclusive of his proposal for a Medicare-like public option, would increase net costs by about $35 billion a year, according to the Penn Wharton Budget Model. (Gruber’s suggestions have not been scored.)
The biggest fight, of course, will be over adding such a public option to the ACA. That would fill one unfortunate gap in coverage: the 2.2 million left in the coverage cold because 12 states have refused the ACA’s very generous inducement to extend their Medicaid coverage. Biden would automatically enroll that excluded population in his public plan.
Some Republicans will no doubt object strenuously to Biden’s attempt to repair the ACA. But as we saw during the Trump years, opponents don’t have a workable alternative of their own. Instead, they have spent a decade denouncing as socialism a moderate, middle-of-the-road approach based on private insurance. It’s time for them to give up that counterproductive fight and join a constructive effort to make the Affordable Care Act fully live up to its name.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.