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Here's What's Going On With Obamacare Premium Increases

Jeffrey Young   |   August 21, 2014   10:59 AM ET

Health insurance premiums are going to skyrocket under Obamacare next year, maybe even double! No, wait -- they're only increasing a little, and less than before Obamacare! No, wait -- they're … decreasing in some places?

The crucial question about the second year of enrollment on the Affordable Care Act's health insurance exchanges is: How much will coverage cost? Actual prices won't be available in most states until the exchanges open Nov. 15, or shortly before that, so consumers are left to sort through political spin and preliminary reports that don't make things any clearer.

So what's going on? First, most people will pay more for health insurance next year. That's true whether you get coverage from a job, on your own through an exchange or directly from an insurer, or from Medicare. Health insurance prices tend to go up. It's their nature, and it's closely tied to how much the cost of medical care rises.

The good news is that available information indicates the doomsayers were wrong, and premiums under President Barack Obama's health care law aren't going through the roof.

The average increase for Obamacare plans will be 8.2 percent next year in 29 states and the District of Columbia where data about health insurance premiums for 2015 are available, according to PricewaterhouseCoopers, which has conducted the most thorough review to date. That's significant, but it's a little lower than the 10 percent annual rate hikes typical before the Affordable Care Act, according to a recent analysis published by the Commonwealth Fund.

The map below shows average premium increases in the states PricewaterhouseCoopers reviewed, with darker shades indicating higher rate hikes. States with limited information are shown in gray and states where no data were available are shown in white.

obamacare premiums 2015
See an interactive version of this map from PricewaterhouseCoopers.

But none of that is worth much to an individual consumer worried about her pocketbook, and it's no consolation to the family seeing rates for their coverage increase by 10 percent or more, even if that happens only to a fraction of the more than 15 million people the Henry J. Kaiser Family Foundation estimates are in this market.

Averages mask a lot of variation between the states, and even within them, because rates typically are set on a local level. Also, these big-picture numbers don't account for individual variables that affect prices, like age, family size and tobacco use. There are multiple health insurance companies operating in nearly all states, and each sells numerous products to individual households, both on and off the exchanges. The plan one consumer has this year could cost 15 percent more, while her next-door neighbor may see his price go down.

What's more, the numbers used by PricewaterhouseCoopers and others are preliminary in most states, meaning they could change after insurance regulators review them. Plus, states report the prices differently, making comparisons difficult.

Take Florida, where the anti-Obamacare administration of Gov. Rick Scott (R) says health insurance premiums will go up 13.2 percent on average next year. The U.S. Department of Health and Human Services responded to Florida's announcement by arguing that rates for the most popular type of insurance are actually going down in the areas where three-quarters of Sunshine State Obamacare enrollees live.

Similarly, in California, the health insurance exchange touted a 4.2 percent "weighted average" statewide increase, a calculation that considers the number of people on each health insurance plan, rather than a simple average of the price hikes. The state didn't release a plain average.

Comparing states, there's a wide gulf between a place like Oregon, where the average rate will be 2.5 percent lower, and Indiana, where the average price is set to increase 15.4 percent, the PricewaterhouseCoopers report shows. Even within those two states, the change in premiums varies a lot -- from 20.6 percent lower to 10.6 percent higher in Oregon, and from no increase to 35 percent higher in Indiana. Rates vary this year, too, as they have in the past.

The problem is, all of these numbers can be correct, but are are being placed into context by people who have an agenda. And they don't factor in the tax credits that subsidized premiums for 85 percent of the 8 million people who signed up on an exchange this year. While subsidies could shield those enrollees from higher premiums, these consumers still may have to shop around for a new, cheaper plan to keep their costs down next year.

Why will health insurance premiums rise, and why does it vary so much from location to location? There are a host of reasons. Some reflect the nature of the U.S. health care system, and some are Obamacare-related.

Mostly, insurance rates climb because health care costs climb, even though the growth in national health care spending has been historically slow for several years. Factors like prices for medical services and drugs and how much health care people use, vary by state and local area, for reasons that aren't always clear. Generally, premiums are lower in states where multiple insurers compete. All of this was true for 2014, and for every previous year.

What about the Obamacare effect? The most important change this year is that the law required insurance companies to cover people with pre-existing conditions, which led to the expectation that they would need more health care and drive up costs. The share of young adults who enrolled is below what the Obama administration hoped, and there's evidence that previously uninsured people are getting medical care, but that doesn't seem to be leading to widespread, massive price hikes.

The initial enrollment period didn't end until spring, so insurers still don't have a great idea of how much their new customers will cost them, As a result, they're making educated guesses about next year's premiums. This is one reason some companies are cutting rates or seeking big increases -- they guessed wrong last year and set prices too high or too low and want to boost enrollment next year. Increased competition in states where more insurers are joining exchanges also could keep premium increases down.

Why Obamacare May Have Trouble Signing Up As Many Uninsured Next Year

Jeffrey Young   |   August 14, 2014   12:46 PM ET

Obamacare made huge strides in extending health coverage to millions of uninsured people in its first year. Keeping up that momentum could be challenging.

An estimated 54 million Americans are still uninsured. But many of those who haven't yet been helped by the Affordable Care Act might be some of the hardest people to get signed up, according to the people trying to reach them.

"The people the second year are going to be a little bit harder. We got the low-hanging fruit," said Richard Onizuka, the CEO of the Washington Health Benefit Exchange, the insurance marketplace for consumers in Washington state.

More than 10 million previously uninsured people signed up after Obamacare enrollment began last October. That group is considered the most eager for coverage. People with pre-existing conditions, who had been shut out of the market under pre-Obamacare rules and needed health care the most, were now able to get covered. Lower-income families were offered expanded Medicaid and subsidized private insurance.

One big hurdle to future sign-ups is the public's chronically poor understanding of how key parts of Obamacare can help low- and middle-income people afford coverage. These include the availability of Medicaid or subsidies for people who earn up to four times the federal poverty level -- or $46,680 for a single person this year. And public opinion about the law itself is negative.

Certain segments of the population also proved more difficult to reach during the initial sign-up period. Sign-ups of Hispanics lagged behind those of other groups, even though the uninsured rate is higher among Hispanics. People who have less education, live in remote rural areas, are disconnected from community or religious groups, are homeless, don't have Internet access or don't consume news often may not always know that new programs are in place. And smaller numbers of people will find they can't afford even subsidized insurance, or will simply opt to remain uncovered.

And as evidence from California suggests, those who have been without health insurance the longest may turn out to be the most difficult to get signed up. Eighty-two percent of those still uninsured in the Golden State have lacked coverage for at least two years or have never had it, according to a survey by the Henry J. Kaiser Family Foundation in Menlo Park, California.

"There's an expectation that the farther along we go, that it will be the kind of chronically uninsured who end up being the hardest to reach," said Karen Pollitz, a senior fellow at the foundation.

No one expected Obamacare to give everyone health insurance in a single year -- or ever.

The Congressional Budget Office projects the law will reduce the uninsured by 12 million through the end of this year, but that just 7 million will gain coverage in 2015.

And the CBO also expects there still will be 57 million U.S. residents without health insurance a decade from now. That equals 11 percent of the population, including undocumented immigrants who are ineligible for government-supported health benefits. Though it's 26 million fewer uncovered people than there would be absent the ACA, the gap suggests the law can never achieve universal coverage.

Besides undocumented immigrants, there's another category of people left out of the coverage expansion: residents of the 24 states that took advantage of a Supreme Court ruling allowing them to refuse expanding Medicaid eligibility up to 133 percent of poverty, or $15,521 for a single person. The uninsured rate fell in states that expanded Medicaid, but barely moved in those that didn't, a July Gallup poll found. According to the Urban Institute, more than 60 percent of the remaining uninsured live in states that opted against expanding Medicaid.

The results of the first year of the coverage expansion, however, can't be denied. The most official national count of the uninsured, from the census, won't be available until more than a year from now. But numerous polls and analyses make plain that the ACA has made rapid progress in reducing their ranks despite the law's rocky rollout last year.

Obamacare reduced the number of people without health insurance by 10.3 million people in 2014, researchers from the Department of Health and Human Services and the Harvard School of Public Health reported in the New England Journal of Medicine in July. The uninsured rate fell 3.7 percentage points to 13.4 percent between last fall and this March, the lowest rate since 2008, according to Gallup.

Kentucky, which expanded Medicaid and operated a state-run exchange, achieved a big reduction in its uninsured rate, largely through Medicaid. With more than one-quarter of the state's residents now enrolled in that program, finding and signing up more eligible people may not be easy, said Lisa Lee, deputy commissioner of the state's Department for Medicaid Services. "It's almost like looking for a needle in a haystack at this point, but we will continue our aggressive outreach," she said.

In states that resisted Obamacare and didn't expand Medicaid, the path to making major progress on the uninsured is steeper, said Jodi Ray, program director of Florida Covering Kids & Families at the University of South Florida in Tampa.

"There's a huge number of folks," Ray said. "To assume we've captured all the low-hanging fruit would be a gross misstatement in a state like Florida."

An Enroll America survey conducted in April provides some insights into why uninsured people didn't get covered, and what might work to get them enrolled. One key finding is that 61 percent of them want health coverage, compared to 15 percent who don't.

Improving public understanding of the subsidies appears to be crucial to boosting enrollment. More than half of the people who signed up were aware there was financial assistance available, compared to just over one-quarter of those who didn't enroll, the survey shows. Likewise, nearly half of people who didn't try to enroll believed they couldn't afford it, according to the survey.

"There was sometimes a mismatch between perception and reality," said Jenny Sullivan, director of Enroll America's Best Practices Institute. "They didn't necessarily have the knowledge that financial help was available."

Advocates believe they can build on their success with methods that have already proven effective, such as in-person help with applications and spreading the word about financial assistance. Groups plan to expand such efforts to more communities and more people.

"We're going to see continued progress there," Sullivan said of the strategies. "It's really leaning into some of those very same messages that worked well during the first open enrollment period and making sure that we get those to an even broader swath of folks."

Companies Predict Small 2015 Health Cost Rise -- With A Catch

Jeffrey Young   |   August 13, 2014   10:06 AM ET

Large employers expect their health care expenses to rise a modest amount next year, but they plan to continue requiring workers to pay a growing share of the cost of medical care, according to survey findings released Wednesday.

The cost of job-based health insurance at big companies will go up 5 percent in 2015, approximately the same as it did the year before, the National Business Group on Health found in a June survey of 136 companies that employ about 7.5 million people.

Companies will constrain their health spending by shifting costs onto employees. Employer health care costs would be increasing 6.5 percent absent mechanisms like higher deductibles and other tools that make patients responsible for more of the bills they receive for doctor visits, prescription drugs and the like. Company health plans also more commonly require workers to get prior approval for the most expensive drugs or to try cheaper therapies before costlier ones are allowed, the survey shows.

While the most common type of job-based health plan remains a PPO, or preferred provider organization, that carries a deductible that's usually below $1,000, higher-deductible plans are becoming more popular among large companies as a way of limiting their own health care expenses.

Forty-four percent of employers said that so-called consumer-directed health plans, or CDHPs -- mostly high-deductible insurance paired with tax-free health savings accounts -- are the most common chosen by workers. These plans have lower monthly premiums, but expose workers to higher upfront costs before insurance starts paying a share of their bills.

Next year, fewer workers will have a choice between low- and high-deductible plans. Under a strategy known as "full replacement," 32 percent of companies will offer only high-deductible options next year, compared with 22 percent this year, the highest share this decade, according to the National Business Group on Health.

Consumer-directed health plans, higher employee cost-sharing, programs to manage workers' chronic diseases and employee wellness programs are the most effective ways to control health care costs, companies reported.

How Are Companies Trying To Save On Health Care?

employer health insurance

Source: National Business Group on Health

The rise in national health care spending has slowed to historic lows in recent years, but employers face other cost pressures, according to the survey. Workers with especially high medical expenses and particularly expensive ailments, such as joint and back problems, were most commonly identified by employers as causes of increasing medical costs.

The Affordable Care Act, also known as Obamacare, is a small factor by comparison, the survey reveals.

Why Are Company Health Care Costs Rising?

employer health insurance

Source: National Business Group on Health

Starting next year, employers with at least 100 full-time workers will have to offer health benefits to at least 70 percent of them or face financial penalties under Obamcare's employer mandate, the full effects of which have been delayed until 2016. But nearly all large employers already provided health insurance to full-time workers before the ACA and will continue to do so next year, the survey shows. Just 2 percent of companies reported they wouldn't offer health insurance that fully complies with Obamacare, compared with 81 percent that said they would.

Employers also are looking ahead to 2018, when another Obamacare policy is due to take effect, and which will require them to make changes to their health benefits. Under the law's "Cadillac tax," expensive health benefit plans will face a 40 percent tax on their value above $10,200 for an individual plan and $27,500 for family coverage. As with their overall cost-cutting strategies, companies are taking steps to reduce the cost of these plans to avoid or minimize the tax by using mechanisms like higher cost-sharing and expanded wellness programs, the survey shows.

Obamacare At Risk For 310,000 Who Must Provide Proof Of Legal Status

Jeffrey Young   |   August 12, 2014    2:41 PM ET

President Barack Obama's administration is contacting 310,000 Obamacare enrollees starting Tuesday to warn them that they must verify they are U.S. citizens or legal residents -- or their benefits will be cut off.

In letters being delivered in English and Spanish, the Centers for Medicare and Medicaid Services instructs the enrollees to provide additional documentation regarding their citizenship or immigration status by Sept. 5. Without that documentation, their health insurance plans will be rescinded Sept. 30. The recipients of these letters are people who have not responded to five to seven previous attempts to obtain their documents, according to a press release from the agency.

"We want as many consumers as possible to remain enrolled in marketplace coverage, so we are giving these individuals a last chance to submit their documents before their coverage through the marketplace will end," Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, said in the press release. Discrepancies in an individual's application does not necessarily mean that person is ineligible for coverage, the press release notes.

The 310,000 people being contacted represent only a small fraction of the more than 8 million individuals who have enrolled in private coverage via the Affordable Care Act's health insurance exchanges. Nonetheless, this effort by the administration underscores the challenges left from Obamacare's troubled first open enrollment period, which began last October for benefits that took effect this year.

Since the sign-ups in that six-month period ended, the Department of Health and Human Services has been working to reconcile problems with more than 2 million enrollees, including questions about the income they reported to qualify for subsidies and about their immigration status or citizenship.

Undocumented immigrants are barred from receiving subsidies under the Affordable Care Act or even using their own money to purchase health insurance on the exchanges. Immigrants who are legal residents or have become naturalized citizens can do both.

Initially, there were questions related to the citizenship or legal residency of some 970,000 individuals who applied for Obamacare subsidies, according to the Centers for Medicare and Medicaid Services. To date, the issues with 450,000 applicants have been resolved and another 210,000 are in process, the agency reported. These issues are specific to applications made through the federally run exchanges in 36 states, not the exchanges operated by the states themselves.

The largest number of letters are going to Florida, where 93,800 people haven't replied to prior requests by mail, phone or email, according to the agency. The next two states on the list are Texas, with 52,700 people affected, and Georgia, with 20,900.

Even after the letters are sent, federal authorities will try to make contact with these enrollees three more times before their benefits are canceled, an HHS official said on condition of anonymity. To help people document their eligibility for benefits, the federal government also is enlisting the aid of community-based organizations that provided application assistance during the enrollment period, Tavenner said in the press release.

Where Are The Obamacare Warning Letters Going?
obamacare enrollment immigration
Source: Centers for Medicare and Medicaid Services

Read the letter sent to Obamacare enrollees who have not adequately documented their citizenship or immigration status.

Act by September 5, 2014 or Your Marketplace Health Insurance May End

In States Where It's Wanted, Obamacare Is Working Well

Jeffrey Young   |   August 5, 2014    1:01 PM ET

Obamacare is already making a big difference in the states that actually embraced it.

States that expanded Medicaid and created their own health insurance exchanges, or worked closely with the federal government to cover more people, have shown the largest drops in their uninsured rates this year, according to a new poll released by Gallup and Healthways on Tuesday.

Leading the pack was Arkansas, where the uninsured rate has fallen by 10.1 percentage points so far this year, and Kentucky, where it has fallen 8.5 percentage points.

Multiple surveys and studies conducted since the first Affordable Care Act sign-up period officially ended on March 31 suggest President Barack Obama's signature health care reform law is succeeding in one of its chief aims: extending coverage to Americans who lacked health insurance.

The Gallup poll underscores the crucial role played by states, which varied in their approach to Obamacare from fully cooperating with its implementation to actively obstructing it. States have the option of establishing their own insurance exchanges, partnering with the federal government or deferring entirely to the Department of Health and Human Services. States also have a choice between accepting federal dollars to make Medicaid available to more of their poorest residents or rejecting the funding.

The results of those decisions are clear. States that welcomed the law saw significant drops in their uninsured rate, according to Gallup. The findings are consistent with other recent research showing the uninsured rate barely moved in states that didn't expand Medicaid.

The uninsured rate fell 10.1 percentage points to 12.4 percent as of June 30 in Arkansas, which broadened Medicaid eligibility through its "private option" plan using private insurance companies and teamed up with the federal government on an insurance exchange. Kentucky, which has its own exchange and expanded Medicaid, saw its uninsured rate drop 8.5 percentage points, to 11.9 percent. And in Delaware, which also expanded Medicaid and has a partnership exchange, the uninsured rate fell from 10.5 percent to 3.3 percent, Gallup found.

Washington state, Colorado, West Virginia, Oregon, California and New Mexico each cut their uninsured rates by at least 5 percentage points, and Connecticut's fell 4.9 percentage points.

Overall, the uninsured rate fell 4 percent in states that expanded Medicaid and either set up an exchange or partnered with the federal government, compared with 2.2 percent in states that did neither, Gallup found.

The nationwide uninsured rate is 13.4 percent, the lowest since 2008, Gallup reported in a separate survey last month. HHS estimates that thanks to Obamacare, more than 10 million more people are now covered by private health insurance, Medicaid or the Children's Health Insurance Program than before.

Even without expanding Medicaid, the uninsured rate still fell at least slightly in most states that didn't help with Obamacare, according to the Gallup poll. This likely is due in large part to the availability of subsidized private health insurance via the exchanges for people earning more than the federal poverty level, which was $11,490 for a single person during the enrollment period for this year.

For instance, several states that had higher-than-average uninsured rates saw declines. In Florida, the share of residents without health coverage declined 3.2 percentage points to 18.9 percent. In Texas, it dropped to 24 percent, a 3-percentage-point difference. And in Louisiana, 18.4 percent of residents are now uninsured, 3.3 percentage points lower than before Obamacare enrollment. Three states actually recorded an increase in the uninsured rate since September: Kansas, by 5.1 percentage points to 17.6 percent, Iowa, by 0.6 percentage points to 10.3 percent, and Virginia, by 0.1 percentage points to 13.4 percent Gallup found.

For 2014 enrollment, 26 states and the District of Columbia adopted the Medicaid expansion, 16 states and the District of Columbia fully operated exchanges, seven states opted for partnership exchanges and the remainder allowed HHS to run their exchanges. The breakdown of state and federal exchanges may be different for the enrollment period for 2015 health coverage that begins Nov. 15. For example, Idaho plans to switch to a state-run exchange, while Oregon will allow the federal government to handle enrollment.

For its study, Gallup interviewed almost 89,000 adults in all 50 states and the District of Columbia by phone. The margin of error ranges from plus or minus 1 percentage point to 3.5 percentage points in states with small populations, such as Delaware, Hawaii, North Dakota, South Dakota and Wyoming.

CORRECTION: An earlier version of this article incorrectly reported two states, Kansas and Iowa, recorded an increase in the uninsured rate. Virginia also experienced a rise in the share of uninsured residents.

Congress Could Easily Fix A Huge Obamacare Problem. It Won't

Jeffrey Young   |   August 5, 2014    7:39 AM ET

WASHINGTON -- A handful of simple words in a piece of legislation could prevent more than 4 million people losing their health insurance, but Congress isn't going to write them.

At issue are several lawsuits against Obamacare moving through the legal system that may go all the way to the Supreme Court. Among other things, the suits contend the precise phrasing of the Affordable Care Act means that low- and moderate-income health insurance consumers in most states can't receive subsidies to make coverage more affordable.

Lawmakers could end that threat any time by changing the law's wording to make it clear subsidies are available nationwide. But in today's take-no-prisoners Congress, Republicans won't let it happen and Democrats won't even try.

"The political point has been very clearly made by Democrats: Let's fix it," said Rep. Henry Waxman (D-Calif.), who was chairman of the the House Energy and Commerce Committee, one of five panels that wrote the law in 2009 and 2010, and is now its ranking Democrat. "The Republicans won't allow it. The only thing they want to pass is repeal."

It's a sign not just of the unruly politics of President Barack Obama's health care reform law, but of the dysfunction that has taken root in a national legislature that used to routinely pass so-called technical corrections bills to clear up legislative ambiguity and assert Congress' authority.

"In the past, when you had even highly charged or controversial legislation, the attitude that members had, for the most part, was 'What's done is done. It's the law now. Let's make it work as best we can,'" said Norman Ornstein, resident scholar at the American Enterprise Institute and co-author of a book about Congress and contemporary politics entitled It's Even Worse Than It Looks.

"We're seeing this play out on a larger stage, on issue after issue after issue," such as this year's failure to pass an immigration and border security bill and the near-failure to keep highway funding flowing, Ornstein said. This follows other self-imposed crises, like last year's government shutdown.

Even confined to health care, there are numerous examples of Congress addressing problems in laws already enacted. Medicare itself has underdone many changes since 1965. The 2003 Medicare drug benefit law has been amended. The Balanced Budget Act of 1997 was followed by the Balanced Budget Refinement Act of 1999. And that's not including the countless small corrections to legislative errors that become part of larger bills.

Instead, this is where we are on Obamacare. The day two federal appeals courts offered divergent opinions last month on whether subsidies could be given individuals purchasing coverage on a federally run health insurance exchange, critics of the law didn't move to clear any ambiguity. They jumped to kill the entire bill.

“Today’s ruling is also further proof that President Obama’s health care law is completely unworkable. It cannot be fixed," House Speaker John Boehner (R-Ohio) said in a statement July 22.

These lawsuits come down to the phrase "exchange established by the state,” which appears in the Affordable Care Act. In a nutshell, the plaintiffs argue this means the tax credits available to people who earn up to four times the poverty level, which is $94,200 for a family of four this year, only can go to people who bought their health insurance in one of the 15 state-run health insurance exchanges, not the federal exchanges in 36 states.

Like other Democrats, Waxman rejects the contention that the law doesn't intend subsidies to be granted nationally. But he does acknowledge the Affordable Care Act language needs to be cleaned up in places.

Public opinion supports the Democrats' point of view, sort of. A majority of Americans disapprove of the Affordable Care Act, as illustrated by a poll conducted last month by the Henry J. Kaiser Family Foundation, but a larger majority prefers fixing it to repealing it, which Republicans have voted to do dozens of times.

But rather than write a bill that would make those lawsuits disappear and force Republicans to oppose people losing their health insurance, Democrats won't even try. To do so would provide Republicans more ammunition against Obamacare, Waxman said. "We're just giving Republicans an opportunity to say, 'Look at all these problems,'" he said.

So obstruction from Republicans and defeatism, however realistic, from Democrats means that potentially huge problems like these Obamacare lawsuits go unaddressed. And there are other known issues with the law that are undercutting its aims.

Waxman cited another example, known as the "family glitch," which blocks subsidies for spouses and dependents of workers whose employers offer health insurance only to them, and not their families. That means one parent could get health benefits from work, but the rest of the family still couldn't afford coverage.

Sen. Brian Schatz (Hawaii) and four other Democrats actually introduced a bill to fix ambiguous language in one part of Obamacare that could deprive Native Americans of health benefits. A few lawmakers also have floated more fundamental changes to the Affordable Care Act, like a bill from Sen. Ron Wyden (D-Ore.) and then-Sen. Scott Brown (R-Mass.), and a set of proposals from a sextet of moderate Democrats this year. None of them have gone anywhere.

When lawmakers have agreed to changes to Obamacare, it's mainly been to cut funding for things like preventive medicine and nonprofit insurance companies, or to ease tax filing for businesses -- not to make it work better.

And then there are the numerous cases where the Obama administration has stepped in to rectify confounding aspects of the law.

For instance, the Affordable Care Act requires members of Congress and their aides to get their benefits from the health insurance exchange in the District of Columbia, rather than from the federal employees' plan. But this part of the law wasn't clear whether the federal government would help pay for Capitol Hill employees' insurance, as it does for other government workers. So the administration wrote regulations saying it could. Some Republicans freaked out over the fix. Sen. Ron Johnson (R-Wis.) is still suing the president over it.

The administration also has postponed a number of Obamacare policies, like the employer mandate, that Congress could have adjusted with legislation. In a more collaborative political universe, the White House would have pushed for a legislative fix. But Republicans made clear that they'd attach amendments delaying the individual mandate as well -- something that would derail the entire law. And so, the president chose to make an administrative delay and Boehner responded by pledging a lawsuit.

"One of the great ironies here is that with the obduracy in the House and among Senate Republicans -- 'All we want to do is focus on repeal' -- they're abdicating their own power," Ornstein said. "They're giving it to the courts. They're giving it, especially, to the executive branch. They're leaving a vacuum here, and that vacuum's going to be filled."

Sabrina Siddiqui and Laura Bassett contributed reporting.

Obamacare Is More Unpopular Than Ever, Poll Shows

Jeffrey Young   |   August 1, 2014   12:00 AM ET

A majority of Americans disapprove of Obamacare, the highest share since President Barack Obama's health care reforms became law more than four years ago, according to survey findings released Friday.

The Henry J. Kaiser Family Foundation's health care tracking poll for July reveals that 53 percent of people view the Affordable Care Act unfavorably, a jump of 8 percentage points since June. July's results mark the fifth time since April 2010, and the first time since January, that at least half of Americans are not supportive of the health care reform law.

The poll found that the share of people who view Obamacare favorably fell slightly, to 37 percent, marking the lowest rating the law has received since its passage. Views about the ACA remain sharply partisan.

Most People Don't Like This Obamacare Thing

obamacare poll

The rising opposition to the Affordable Care Act and the corresponding sinking approval come despite Obamacare's rebound from the disastrous, chaotic launch of HealthCare.gov and the first enrollment period that began last fall.

By April, more than 8 million people had used the law's health insurance exchanges to sign up for private coverage, with 86 percent of enrollees receiving financial assistance. Millions more enrolled into Medicaid or the Children's Health Insurance Program, which offers insurance to children in families with incomes too high for Medicaid.

The law also appears to be significantly reducing the ranks of the uninsured. According to the Department of Health and Human Services, the number of uninsured people in the nation has dropped by 10 million people because of Obamacare enrollment.

But Obamacare has always had weak support among the American public. Previous Kaiser Family Foundation surveys show only three months since Congress passed the law in March 2010 when more people approved than disapproved.

The list of reasons is lengthy. Republicans have been unrelenting in their attacks, such as the lawsuit planned by House Speaker John Boehner (R-Ohio) against Obama for delaying the law's employer mandate. The public has remained strongly opposed to key features of the law, especially its individual mandate that nearly everyone obtain health coverage, and memories linger of Obama's broken promise that people would be able to keep their current insurance policies. Polls also show that many Americans, including the uninsured, believe they can't afford the insurance sold on the Obamacare exchanges, and aren't aware that financial assistance is available.

And alongside bits of good news for Obama, like the falling number of uninsured Americans, is more bad news, like a federal appeals court ruling last week that would devastate Obamacare, and a federal audit this week concluding the HealthCare.gov debacle still isn't fully resolved.

The new Kaiser Family Foundation survey shows how Americans' perceptions of Obamacare are shaped. Less than half of those polled had discussed the Affordable Care Act with family or friends, and just over half had seen TV ads about it. However, what people did talk about or see was negative.

If People Hear About Obamacare, It's Likely To Be Something Bad

obamacare poll

More than half of respondents said they hadn't personally been affected by Obamacare. Of the people who said they had been affected, more were likely to say it had harmed them or their families than helped.

Another Kaiser Family Foundation report, published last month, got markedly different results when polling only those who had enrolled into coverage through the Obamacare exchanges. More than half of the people who used a health insurance exchange, and 60 percent of those who received financial assistance, said they had benefitted from the law.

Even as many people expressed negative opinions about the Affordable Care Act, the poll also found that 60 percent of Americans don't favor repealing it (the GOP's standard take when it comes to the law). Instead, people said they want Congress to improve the law. These views also fell along party lines.

Repair, Not Repeal And Replace

obamacare poll

Moreover, Americans seem to want Obama and Congress to work on subjects other than health care reform, the survey shows.

There's More To Life Than Obamacare

obamacare poll

Obamacare Prices In California Only Going Up A Little Next Year

Jeffrey Young   |   July 31, 2014    4:27 PM ET

Nearly nine in 10 Californians with a plan purchased through the state's health insurance exchange will see price increases of less than 8 percent next year, the exchange, Covered California, announced Thursday.

The weighted average rate across California will be 4.2 percent higher than this year. The new, estimated rate is calculated by factoring in increases and decreases, as well as the number of consumers in each health plan, according to a press release. The new premiums are preliminary, pending review by other state regulators. Ten health insurance companies will offer plans on the exchange, which is three fewer than this year.

"It's good news for California. It's good news for the Affordable Care Act," said Peter Lee, the executive director of Covered California. The 2015 increases are lower than annual hikes in the years before Obamacare, he said. "We've been seeing consumers facing 10 percent or more in rate increases year over year. This year, 4.2 percent is the average increase," Lee said.

Since the enactment of the Affordable Care Act, California has positioned itself as a national leader in health care reform. The state created its own health insurance exchange and participated in the law's expansion of Medicaid to more low-income residents. And California's uninsured rate was more than halved by the end of the first Obamacare enrollment period that ended this spring, as 3.4 million Californians gained coverage, according to the Henry J. Kaiser Family Foundation. Prior to Obamacare, California had one of the highest uninsured rates in the nation.

"We still are at the starting point, and we know we have a long way to go," Lee said.

The low average price increases for 2015 could quell fears of double-digit rate hikes in the state, but individual consumers' experiences will vary.

Thirteen percent of Covered California users are in health plans that will see price increases of more than 8 percent, and more than 35 percent of users will see rate hikes between 5 percent and 8 percent. Another 35 percent will pay less than 5 percent more, while 16 percent of policyholders have plans with prices that will stay roughly flat, or even decrease, according to Covered California. Average increases differ among the state's geographic areas and based on other factors, including age.

"Averages are meaningless. What's meaningful is to talk about a person's circumstances," Lee said. Consumers facing rate increases who shop around on the exchange during the next open enrollment period, which runs nationwide from Nov. 15 to Feb. 15, 2015, may find a comparable plan at a lower price, he said. Californians can review next year's rates for specific health insurance plans on the exchange's website as of today, he said.

These 2015 rate increases follow a significant one-time bump in prices for coverage on California's individual market last year. That increase was caused by Obamacare's benefit mandates and its prohibition against insurers rejecting consumers based on their health.

According to California Insurance Commissioner Dave Jones, prices rose anywhere from 22 percent to 88 percent from 2013 to 2014, although those rates don't factor in the effect of tax credits that reduce what customers pay. For 2014 benefits, 88 percent of Covered California users received such financial assistance. Jones supports a proposition pending on the ballot that would empower his office to reject insurance price increases, while Covered California's leadership has been skeptical. Lee on Thursday called Jones' findings "misleading and distracting."

California's health insurance premium increases appear in line with preliminary information coming from other states, although some consumers will face significant increases if they remain on their current plans next year. State and federal regulators are reviewing companies' proposed rates.

Jeffrey Young   |   July 24, 2014   12:00 AM ET

WASHINGTON -- An obscure Obamacare feature may net health insurance customers $332 million this year.

That's the total insurance companies will have to give back to customers this year under an Affordable Care Act provision designed to keep companies from overcharging consumers, the Department of Health and Human Services announced on Thursday. Including this year, consumers will have recovered a total of $1.9 billion from insurance companies since the rule took effect in 2011, according to the department.

Under President Barack Obama's signature health care reform law, insurance companies must spend at least 80 percent of the premiums they collect on actual medical care, rather than on overhead and profit. They are required to give rebates to consumers, or to their employers in the case of job-based insurance, if they fail to meet that standard. Close to 7 million people are due refunds by Aug. 1, with an average of $80, according to a report issued by the department.

Consumers may not actually get checks or refunds to their credit cards, however. Insurance companies may also apply the money to future premiums, or pass the dollars back to the employer that sponsored the coverage, which may use the funds to lower premiums or add benefits.

The aim of the "80/20" or "medical loss ratio" rule isn't just to give rebates to consumers whose insurance providers overcharge them. The goal is to pressure insurers to cut administrative spending and other overhead, and to price their plans accurately up front. Under the rule, large-group plans like job-based health benefits must spend 85 percent of premiums on medical care, while insurers covering small businesses or individuals who buy plans directly must spend 80 percent.

Health and Human Services data indicate health insurers are cutting overhead. In the individual market, the percentage of premiums going to administrative costs and profit fell from 15.3 percent in 2011 to 11.5 percent in 2013, HHS reports. Reductions in the large-group and small-group markets were less, and the overall rate dropped from 13.1 percent to 12.2 percent.

Fewer people are getting rebates, which is another sign the 80/20 rule may be working as intended: If insurance companies set prices up front that are closer to their expenses, then they will have less need to pay rebates.

In 2012, 13 million consumers got rebates valued at $1.1 billion. Last year, 8.5 million got $500 million in refunds. According to HHS, the Obamacare 80/20 rule saved consumers about $9 billion in excess premiums from 2011 to 2013.

Jeffrey Young   |   July 23, 2014    6:07 PM ET

The number of Americans without health insurance declined by 10.3 million because of Obamacare enrollment, according to a report from the Department of Health and Human Services and the Harvard School of Public Health, published in The New England Journal of Medicine on Wednesday.

That represents a reduction in the uninsured rate for adults aged 18 to 64 from 21 percent last September to 16.3 percent this April, the HHS analysis concludes. The lower rate remained stable through June. The first open enrollment period under Obamacare began Oct. 1, 2013, and officially ended March 31, 2014.

The adult uninsured rate has declined across all ages, racial and ethnic groups, and among men and women, according to HHS. The report is based on previously reported Gallup survey data and a comparison to health insurance exchange enrollment numbers compiled by HHS.

It doesn't offer a hard count of how many of the Obamacare insured -- that is, the more than 8 million people who enrolled in private health insurance via the exchanges, or of the millions more who signed up for Medicaid or the Children's Health Insurance Program or bought coverage directly from an insurer -- were uninsured before. The New England Journal of Medicine article is nonetheless the closest to an official federal account to date of the Affordable Care Act's impact on the uninsured.

Previous surveys by Gallup, the Henry J. Kaiser Family Foundation, the Commonwealth Fund and others also have found significant reductions in the numbers of uninsured.

According to HHS, the drop in the uninsured was more pronounced in the 25 states and the District of Columbia that adopted Obamacare's expansion of the Medicaid program before this year, and wasn't statistically significant in the 25 states that didn't. In the Medicaid-expanding states, the uninsured rate for people newly eligible fell 6 percentage points, compared to 3.1 percentage points in non-expanding states.

Uninsured Rate Among Adults 18-64 From January 2012 to June 2014
obamacare Source: New England Journal of Medicine

Calm Down, Everyone. Two GOP Judges Didn't Annihilate Obamacare

Jeffrey Young   |   July 23, 2014    2:59 PM ET

On Tuesday, two federal appeals courts issued totally opposing rulings on a pair of lawsuits challenging Obamacare, one of which would tear apart the law and jeopardize health insurance coverage for millions of people who signed up.

You might find that a bit troubling, especially if you're one of those people. There's no reason to panic just yet, though. Here's what you need to know.

Holy crap Obamacare blew up??!?1!

No. I just said not to panic.

But the news said!

I know, I know. This is what's going on. Two sets of appeals court judges, one in the District of Columbia and one in Richmond, Virginia, made decisions on separate but very similar lawsuits. Both suits essentially say that, because of a quirk in the law's wording, the federal government is only allowed to provide health insurance subsidies to people in states that created their own "exchanges," or marketplaces where people can shop for coverage and apply for financial assistance.

The D.C. appeals panel ruled 2-1 (two Republican appointees versus one Democratic appointee) in favor of the plaintiffs in a case called Halbig v. Burwell. That decision, if it stands, would be very, very bad for Obamacare. But later the same day, the Richmond appeals panel (three Democratic appointees) unanimously decided a case called King v. Burwell in President Barack Obama's favor. Courts are confusing!

Lots more stuff has to happen now. The Obama administration will appeal the Halbig decision to the full D.C. appeals court (which has a majority of Democratic appointees on it), and the plaintiffs in the King case may decide to appeal to the full Richmond appeals court (which also has a majority of Democratic appointees on it). The Supreme Court might have to get involved before this is all sorted out, although Chief Justice John Roberts declined his last invitation to ruin Obamacare.

In the meantime, nothing has actually happened to anyone. Did you get a subsidy from an Obamacare exchange? Uncle Sam isn't coming to snatch it back from you while you're sleeping.

Oh, so it's no big deal?

No, that's not right, either. If the plaintiffs in these cases get their way, it would blow a giant hole right in the middle of Obamacare and devastate health insurance markets in the 36 states where the federal government runs the exchange because the states wouldn't. That's not really an exaggeration.

For a start, millions of people would lose the subsidies they're getting and not be able to obtain them in the future, very likely leaving them uninsured.

obamacare court ruling

Then the "death spiral" would begin. Believe it or not, that's a technical term for circumstances when insurance becomes so expensive, only people who really need it will buy any.

When the only people who buy insurance are the ones who really need it, they run up huge bills and there aren't enough people paying premiums, but not filing claims, to cover their expenses. This forces insurers to raise rates even higher. Then more healthy people drop out. Then rates go up more, etc., etc. The spiral ends when insurance companies give up on the market altogether, so no one can buy insurance.

It's sort of like those DirecTV commercials about your dad getting punched in the face. Horrible.

That seems like a terrible mess. Is this going to affect me?

If you got a subsidy in one of those 36 states, then yes, it would have a huge impact on your coverage. But if you get health coverage from your job or from government programs like Medicare, Medicaid, Veterans Affairs and such, it's probably not about you. The Obamacare exchanges and subsidies under dispute are meant for people who don't get insurance from those places and instead buy it directly for themselves.

What, exactly, is the legal argument that started all this?

Let's ask Kool-Aid Man!

obamacare court ruling

There's a whole bunch of smartypants legalese involved in these lawsuits, but our 60-year-old brand mascot friend has the gist correct. There's a line in the law that says subsidies are intended to be distributed "through an exchange established by the state." According to the plaintiffs in the Halbig case, this would mean the subsidies can't be distributed through an exchange established by the federal government. "Seinfeld" fans may be familiar with this type of reasoning. The plaintiffs further argue that Congress intended this part of the law to serve as a way to pressure states to create their own exchanges, lest their residents be denied subsidies.

Obama's lawyers basically argue that this is nonsense, considering the Obamacare project is largely about helping low- and middle-income people across the country to afford health insurance. Also, no one in Congress ever said that thing about withholding subsidies from any states. Just ask members of Congress -- they'll tell you. Look at the totality of the law, the administration says, and that one line is, at worst, ambiguous, so federal regulators have the authority to clarify any murkiness.

What can be done to stop people getting kicked off their insurance if Obama loses?

Well, if this country had a functioning Congress, it would take approximately zero time to clear this up. A few lines of legislation could be passed and signed by Obama affirming that, yes, the Democrats who wrote the Affordable Care Act always intended for subsidies to be available to the whole country. But since our political system is a disaster, that's not going to happen.

Another straightforward fix would be for the states to run their own health insurance exchanges, as Congress wanted them to do. But the expense, hassle and chance of failure -- hello, Oregon -- combined with intense hostility to Obamacare in most of the same states make that unlikely, too. Some people believe states could do something simpler, like pass laws essentially declaring that the federal exchange is their state-based exchange. It's so crazy it just might work! It's also absurd.

When will we know for sure how this will turn out?

Predicting what courts will do, or when they'll do it, is a fool's errand. In addition to more potential appeals court action in the Halbig and King cases, and possibly Supreme Court consideration, there are similar cases bouncing around in lower courts. How long will that take, and how will it end up? ¯\_(ツ)_/¯

How Your Health Insurance Company Can Still Screw You, Despite Obamacare

Jeffrey Young   |   July 21, 2014    7:36 AM ET

No law has done more to reform health insurance and protect consumers against the industry's most heinous practices than the Affordable Care Act. But Obamacare didn't magically transform insurers into benevolent entities solely devoted to taking care of sick people.

Health insurance companies, even those that are not-for-profit, have to collect more money in premiums than they shell out in claims for medical care. That means they have a financial incentive not to pay for things.

And since health insurance companies can no longer shun the sick to maximize profits -- either by denying coverage to people based on their medical histories or by rescinding the policies of paying customers who fall ill and rack up bills -- insurers are employing other tactics to shift costs to sick people and make it harder to get health care, consumer advocates say.

"One of the things that occurred to me, even as the bill was working its way through Congress, was that once it was passed, insurers would do all they could to try to preserve profit margins," said Wendell Potter, a former Cigna executive turned industry critic.

Here are a few of the tactics that consumers and advocates have complained about:

Refusing to pay for medical care that should be covered

Nothing in Obamacare says insurance companies have to pay any bill that comes their way. That's fine, because doctors and patients want things all the time that are wasteful and unnecessary, and everyone shares the cost for that.

But it means the law doesn't prevent stuff like this from happening:

Zoë Keating is a musician with more than 1 million followers on Twitter. Her husband, Jeffrey Rusch, had been diagnosed with cancer at the emergency room, hospitalized and given chemotherapy. The insurance company refused to cover it -- until Keating told her story to a San Francisco television station, according to reports on KPIX.

While the Affordable Care Act beefed up patients' right to appeal denials by insurance companies, people still have to fight, which is to the insurer's advantage. "A lot of people just simply don't understand their appeals rights and don't appeal, or think that they just don't have a chance of getting something overturned," Potter said. "The insurance companies know that." Most people don't have a million Twitter followers, either.

Making patients pick up a bigger share of the bill

To keep premiums as low as possible, insurance companies are pushing more of the cost of actual care on to their customers in the form of things like high deductibles and "coinsurance," which requires patients to pay a percentage of the cost of their care, instead of making a flat copayment.

restaurant check group

"Okay, Ashley, you've got diabetes, so you have to pay half the tab. Oh, and Brittany had a second glass of wine."

And it's virtually impossible to learn in advance how much medical care will actually cost, meaning patients are left in the dark.

"What this means for someone with cancer is that they may end up being directed away from a plan because they can't find out whether their doctor is in the network, or whether the plan covers their drugs, on what tier and how much they have to pay out of pocket," said Kirsten Sloan, senior director policy at the American Cancer Society Cancer Action Network. Sending a cancer patient to a competitor would count as a win in the insurance industry.

Designing benefits to make the sickest patients pay more for drugs

Advocates for patients with serious medical conditions have been incensed by the practice of "tiered" drug lists, which have become a popular way for insurers to limit their expenses. Under this mechanism, the amount patients pay at the pharmacy is generally lower for cheap generic medicines and "preferred" brand-name drugs, higher for other brand-name drugs and higher still for the most expensive specialty medications.

health insurance obamacare

The good stuff is always on a high shelf. Almost got it!

High cost-sharing and top-tier status for drugs that treat ailments like HIV and multiple sclerosis are common in insurance policies bought via the Obamacare exchanges, the consulting firm Avalere Health reported last month. That looks an awful lot like insurers discriminating against sick people, the AIDS Institute claimed in a complaint filed against four Florida insurers with the federal government in May.

"Where we've seen the problems is putting every single HIV drug, including generics, on the highest tier, and that with very high coinsurance, like 40 or 50 percent," said Carl Schmid, deputy executive director of the AIDS Institute. "There's plenty of plans in Florida that don't do this, and charge $10, $20 a copay for the same drugs."

Limiting access to doctors and hospitals

Health insurance plans sold via Obamacare exchanges often have "narrow networks," or shorter lists of medical providers that accept those plans than people with job-based insurance or Medicare might expect. Insurers need to keep costs down, and tough negotiating with high-priced doctors and hospitals can do that. This ends up saving the whole health care system money, including insurance customers.

The trouble is, when those networks don't include enough of the specialty care providers that take care of the sickest, most expensive patients -- like, say, cancer centers -- it has the effect of denying care to those very sick people because they can't get appointments.

health insurance obamacare

"Sorry, bro. Not on the list."

"Insurers might try to avoid people with HIV or cancer or expensive conditions by avoiding the doctors that tend to treat those people, but otherwise their network looks robust," said Karen Pollitz, a senior fellow at the Henry J. Kaiser Family Foundation. "Whether it's happening -- no way to know yet." The Obama administration and state regulators are poised to take action to compel insurers to beef up their networks, The New York Times reported.


Rolling out the red tape

To save money, insurance companies will be stricter about approving and paying for medical treatments, said Carmen Balber, executive director of the nonprofit organization Consumer Watchdog. "I have no doubt that claims denials or delays will be the new discriminatory tactic of the industry," she said.

In Seattle, one doctor said she has to work harder to get treatments approved this year. "There are more hoops that the provider has to jump through," said Grace Wang, the medical director of the International Community Health Services Holly Park Medical and Dental Clinic.

health insurance obamacare

"We'll gladly pay your claim -- after you perform a death-defying escape, Houdini."


Wang returned to the clinic after Memorial Day weekend and attempted to follow up on a request she'd made to refer a patient to a specialist. The insurance company said her request already had been rejected because she hadn't called back quickly enough.

"Their clock started ticking on Sunday. Monday was a national holiday, and so when 48 hours went by, they denied," said Wang. "A conspiracy theorist would wonder."

In States That Didn't Expand Medicaid, Obamacare's Not Reaching The Poor

Jeffrey Young   |   July 9, 2014   11:58 PM ET

Twenty-five states didn't take up the Obamacare Medicaid expansion at the beginning of this year, and the results speak for themselves: A new survey shows more than one-third of their lowest-income residents remain uninsured, a rate virtually unchanged from last year, even as millions gained coverage elsewhere.

Nationwide, the share of Americans 19 to 64 years old without health insurance fell from 20 percent to 10 percent, as 9.5 million people got covered by Medicaid or private health insurance, according to a poll of Obamacare enrollees published Thursday by the Commonwealth Fund.

Among adults who earn less than poverty wages in states that didn't expand Medicaid, the uninsured rate is 36 percent, a decline of two percentage points (termed not statistically significant) from last year. That compares to a dramatic drop from 28 percent to 17 percent in states that expanded Medicaid.

The debate over the Medicaid expansion remains arguably the most consequential unresolved matter related to the Affordable Care Act, as the refusal by Republican governors and state legislatures to accept federal dollars to provide health care to poor people is having real effects on the ground.

Medicaid Expansion Decisions By States Have Predictable Results

obamacare medicaid uninsured

The authors of the ACA didn't foresee this outcome, which was made possible by a Supreme Court ruling in 2012 giving states the right to opt out of Medicaid expansion and granting GOP politicians another cudgel to use against Obamacare.





Source: The Advisory Board Company

The law was originally designed to make Medicaid available to anyone who earns less than 133 percent of the federal poverty level, or $15,282 this year for a single person. The law also lets individuals who make between the poverty level of $11,490 to four times that amount get tax credits to cut the cost of private health insurance. But anyone who makes less than that -- or even nothing -- gets no assistance if they live in Texas, Florida, Louisiana or the other states didn't didn't expand the program.

Law Meant To Cover The Uninsured Is Covering Them

obamacare medicaid uninsured

Among Obamacare enrollees with either Medicaid or private health insurance obtained through insurance exchanges, 63 percent didn't have health coverage before. Two-thirds of new Medicaid enrollees were previously uninsured. The greatest gains in health coverage were among young adults, poor adults and Latinos, the survey found.

The Commonwealth Fund poll, conducted through telephone interviews of 4,425 people by the firm SSRS from April to June, focused special attention on the six most populous states.

California, which expanded Medicaid, cut its uninsured rate in half to 11 percent. In Florida, which did not expand the program to more people, the share of uninsured residents declined from 30 percent to 26 percent, a difference deemed statistically insignificant. Texas also didn't expand Medicaid, but its uninsured rate still fell from 34 percent to 22 percent, the survey found. Texas and Florida still have the highest uninsured rates in the nation.

Big Variations In The Uninsured Rate In The Big States

obamacare medicaid uninsured

The Accidental Reason Companies Like Hobby Lobby Control Our Health Care

Jeffrey Young   |   June 30, 2014    4:34 PM ET

The Supreme Court's ruling Monday that Hobby Lobby can refuse to cover contraception for workers is yet another reminder that our bosses have a lot of control over the health care we receive -- and that's not likely to change any time soon.

Jobs are the most common source of health insurance in the United States, a peculiar fact that sets the country apart from its international peers. That's why losing a job typically has meant losing health coverage, and it's why workers whose needs aren't met by their company's health plan have little recourse. They can go work elsewhere, pay much more money for health insurance on the open market or shell out cash for medical care that's not covered by their benefits.

Dumping employer-based health insurance is something of a cause célèbre among liberal and conservative economists alike. These intellectuals believe "decoupling" health insurance from jobs would be a more rational and fair way of pooling medical costs. Whether employer-based insurance should be replaced by a big national health care program or a private insurance system where individuals buy their own coverage depends on which economist you ask.

Getting rid of the current system would also let you avoid situations where your boss decides he doesn't want cover your medical treatments -- or shouldn't have to pay for something he believes is morally wrong, like, say, birth control.

But people who aren't eggheads tend to have a pretty strong bias for the status quo, and so do the politicians they elect.

More than 150 million Americans are covered by employer-sponsored group health insurance. That's more than Medicare, Medicaid and individual insurance plans combined. And workers seem to like it that way: 88 percent said they were satisfied with their insurance last year, according to a survey by the Employee Benefit Research Institute. One reason might be that companies pay part of the monthly premiums.

President Barack Obama and the Democrats who wrote the Affordable Care Act understood this, and they also knew that fear of change among the already insured was a huge reason why President Bill Clinton's health care reform agenda blew up in his face. So they sought to preserve the system that provides almost half the country with insurance, rather than scrapping it.

The furor over the cancellation of a tiny fraction of health insurance plans last year suggests those Democrats were onto something.

hobby lobby employer insurance
President Barack Obama, seen here not rocking the boat.

How did the U.S. wind up with a health insurance system so different from those of other rich nations, nearly all of which have universal health care programs, including those where employers play a role? How did employers became responsible for providing health insurance, and how did workers become dependent on their bosses for health care?

It's an accident of history. During World War II, the federal government imposed wage and price controls on private companies that made it impossible for them to raise pay levels in order to attract employees at a time when a huge chunk of the workforce was fighting (and dying) overseas. But the feds also decided that fringe benefits like medical insurance were exempt from wage controls. After the war, the federal government ruled that these benefits weren't subject to income tax, either.

hobby lobby employer insurance
"The only thing we have to fear is a distorted health care market 70 years from now."

This made juicy benefits cheaper for employers than higher pay, and advantageous for workers, too, since no one pays income taxes on the value of these benefits. The U.S. Treasury would have collected $185 billion more in taxes last year if health benefits weren't exempt, according to the Center on Budget and Policy Priorities. The Congressional Budget Office refers to it as the biggest so-called tax expenditure on the federal books.

The number of Americans who get health insurance at work is expected to rise, not fall, in the coming years, despite the emergence of an alternative in the form of the health insurance exchanges created by Obamacare. For one thing, the exchanges aren't a great option for workers whose companies have health plans, because people with access to health insurance at work mostly don't qualify for federal subsidies if they buy it on their own.

For another, the Affordable Care Act requires companies with at least 50 full-time employees to offer health benefits or pay a penalty to offset the cost of the government doing it instead. That mandate has been delayed twice already, so maybe it'll never take effect. But if it does, the Congressional Budget Office projects that companies will, by and large, continue to provide insurance to workers.

Companies themselves say the same thing when asked, at least when it comes to full-time employees. In a typical poll, published by Towers Watson and the National Business Group on Health in May, 98 percent of employers agreed it was important to offer health benefits to full-time employees next year and in the near future.

Your Boss Still Wants To Give You Health Insurance


hobby lobby employer insurance
Source: Towers Watson/National Business Group on Health

And as much as employers might like to get out of the costly health care business, they're not clamoring to let the government take it over and raise their taxes while taking away the control they currently have.

Plus, American companies are accustomed to using rich benefit packages as a way to lure and keep the workers they value, especially given the tax advantages. Competition for labor makes employers loath to be the first ones to dump their benefits and direct workers to the Obamacare exchanges, lest the employees flee to rival firms where the health plans haven't been killed.

There are some small signals that the status quo might change, however. If the health insurance exchanges stabilize and grow, and people like the coverage they find there, companies could become less fearful of a backlash. The same Towers Watson survey found that just a quarter of employers are "very confident" they will provide health insurance a decade from now, down from 43 percent 10 years ago.

Your Boss Is A Bit Unsure About The Future Of Health Benefits


hobby lobby employer insurance
Source: Towers Watson/National Business Group on Health