The health reform law celebrates its two-year anniversary tomorrow. There are myriad ways to report on the Affordable Care Act and its sure-to-be-tumultuous future. Two stories showed up this week that illustrate two sides of health reform. The AP, which reaches zillions of ordinary people, reported—not surprisingly—on how the law has helped ordinary people. Politico, which reaches the Beltway types, described “four hard truths of health care reform” in a piece meant to interest political types. Neither story would win five stars, but they are good starting points for more questions and dot connection.
The AP’s story profiled seven people whose lives were in some way touched by the Affordable Care Act. There’s Michael Esch of Warwick, New York, whose employer, Stryker Corp., a medical device maker, laid him off last fall. Stryker Corp. blamed the health reform law, which will impose a tax on device manufacturers to help pay for expanded coverage. Apparently Esch has coverage under his new job, and is pleased his daughter can stay on the policy until she turns 26. He’s worried about health reform’s “ripple effect” on businesses; it would have been nice to know about the business community’s efforts to repeal those taxes.
There’s Glenn Nishimura of Little Rock, who lost his health coverage when COBRA ran out three years ago. He’s eligible for Arkansas’s special high risk pool that health reform established with money provided by the law, but the premiums are too high and the deductible too steep. The AP says he may be eligible in two years for subsidies to help buy health insurance. It would have good to know what his income is now, and how much of a subsidy he would receive. Few people understand how subsidies would work and who would be eligible.
The AP told about Samantha Ames of Washington, D.C., age 25, who is still covered under her parents’ policy, which paid for her $30,000 ankle surgery. “Very rarely have I had something political affect me this personally,” she said. Some 2.5 million young adults are still on their parents’ policies courtesy of the law. Carol McKenna, age 70, of Pembroke Pines, Florida, and her husband have Medicare Advantage plans. Her husband has high drug expenses and has been helped by the closing of the donut hole for prescription drugs—the part of Medicare’s drug benefit that has offered no government coverage for medicines. Warnings that the law hasn’t resulted in possible cuts to Medicare Advantage plans haven’t come true, McKenna said. But most independent experts believe they will once the cuts are phased in over the next few years. There’s much more to this story.
There’s more to Sharon Whalen’s story, too. Whalen publishes a weekly alternative newspaper in Springfield, Illinois, and has used a small business tax credit made available by the Affordable Care Act—in her case, $2,700—which she has plowed back into the paper. She offers health insurance to ten workers and pays for half the cost, but that coverage now comes with higher cost-sharing for the workers, in order to hold down premiums. What happens when the copays and coinsurance keeps going up and the tax credit disappears? After 2014, any small business will only get the credit for two years, says Larry Levitt, a senior vice president of the Kaiser Family Foundation.
And there’s more to the big picture story that Politico tries to tell through the conceit of “four hard truths.” In discussing the first truth, “Some people won’t get to keep the coverage they like,” Politico noted that the president promised people during the reform debate that if they liked the coverage they have, they could keep it. Not true, says Politico. Some employers will drop coverage and send workers to the state shopping exchanges, although the number of employers who will do that is uncertain. Politico’s explanation was incomplete and far from clear. Citing a policy wonk from the Center for American Progress, it reported workers “wouldn’t be forced out. They would leave their workplace coverage voluntarily—possibly for better coverage, with subsidies, through the law’s new health insurance exchanges.”
Here’s the skinny on this: workers who have employer coverage cannot shop in the exchanges and receive subsidies if their share of the employer’s premium is less than 9.5 percent of their gross income. They can, however, shop and get no subsidy, but most workers are not likely to do that. Those who will lose their employer coverage are the millions of workers who have those Cadillac plans, the top-notch coverage that the law prompts employers to drop come 2017, to be replaced by plans that offer fewer benefits. That’s part of the “skin-in-the game” strategy for holding down costs that makes workers assume more of the cost of their care.