The president last week celebrated the 12th anniversary of the ACA, a.k.a. Obamacare, with his former boss. During the event, he used a number that’s been a standard talking point for many Democrats. But the figure — that without the law, 100 million Americans could be denied health insurance — does not tell the whole story.
It’s been some time since we’ve looked at an ACA claim, so we thought this would be worthwhile to explain.
Every politician likes to claim his or her policies bring benefits to as many people as possible. The 100 million figure has its roots in a study produced by Obama’s Department of Health and Human Services just before he left office in 2017. The study estimated that 2014 data showed between 61 million and 133 million non-elderly Americans (23 percent to 51 percent) had a preexisting health condition that could have been subject to onerous health insurer rules.
“Any of these 133 million Americans could have been denied coverage, or offered coverage only at an exorbitant price, had they needed individual market health insurance before 2014,” HHS said.
Note the reference to the “individual” insurance. That’s because the ACA was mainly focused on the individual market — individual and small-business policies sold on the exchanges or directly to consumers — which is one-seventh the size of the employment-based market where most Americans get their health insurance. According to the Biden administration, 11.3 million consumers were enrolled in ACA plans as of February 2021.
About 56 percent of Americans under 65 get health insurance from their employers. (People over 65 are on Medicare, the health-care program for the elderly.) The ACA built on an existing law that already had greatly reduced the chances someone would be denied health insurance or face higher premiums if they had an employer-based health plan.
That law, the 1996 Health Insurance Portability and Accountability Act (HIPAA), emerged out of the ashes of President Bill Clinton’s failed efforts to provide universal health insurance. These days, HIPAA is most remembered for its privacy protections of personal health-care data. But the “P” — “portability” in the title — refers to its provisions that sought to ensure employees would not lose their health insurance if they changed jobs.
“Even before the ACA, HIPAA provided strong protections for people with preexisting conditions who had access to insurance through an employer,” said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation. “HIPAA limited the amount of time an employer plan could exclude coverage for preexisting conditions to 12 months. It also required that any preexisting condition exclusion be waived for people who had been continuously covered with no more than a short break. While employer plans were still allowed to impose a preexisting condition exclusion for people not continuously covered, many employers didn’t do that anyway.”
Levitt noted that Medicaid, the health insurance program for low-income workers, also didn’t deny coverage for people with preexisting conditions before the ACA for people who qualified based on their income and other circumstances. The ACA’s expansion of Medicaid’s eligibility to adults has added 14.8 million people to the program as of December 2020, according to the administration.
Biden’s use of the 100 million figure appears to stem from a 2018 estimate by Avalere Health, a consulting firm, as that was the citation the Biden campaign gave to FactCheck.org in 2020. But that number included people who might have received health insurance but faced higher premiums or out-of-pocket costs because of a preexisting condition.
“Our estimate of the number of adults with preexisting conditions is lower, because we focus on people with conditions that would have led to an outright decline of insurance if someone tried to buy it on their own before the Affordable Care Act,” Levitt said. “We estimate 27 percent of non-elderly adults have declinable preexisting conditions, representing about 54 million people.”
Separately, a 2010 investigation by the House Energy and Commerce Committee, based on documents from the four largest for-profit health insurers, found that before the ACA, companies denied coverage to 1 out of every 7 applicants. That would be 14 percent, though the report notes that “the actual number of coverage denials is likely to be significantly higher” than the number of documented denials. Still, if you took the entire U.S. population under 65 — about 271 million people — that means 38 million could face a denial of coverage. That’s also much less than 100 million.
The health insurance market has a lot of churn, so many people may experience a gap in coverage of just a few months. One estimate, by the Commonwealth Fund, indicated that in 2020, 9.5 percent of adults “were insured but had a gap in coverage in the past year.”
“At any given time, most of the people with preexisting conditions would not face a denial of insurance even without the ACA,” Levitt said. “But for people who lose or leave their jobs, they could be vulnerable to a denial in the individual insurance market based on their preexisting conditions without the ACA. The ACA guarantees access to coverage for people with preexisting conditions over the course of their lives, regardless of whether or where they work.”
The White House declined to comment.
Biden leans too far over his skis here. The figure he uses, 100 million, includes all people with a preexisting health condition, but a large percentage probably would not face a denial of health-care coverage, let alone higher premiums. A better figure to use would be at least half that size. He mitigated this claim somewhat with the use of the word “can.”
Moreover, he claimed: “That’s what the law was before Obamacare.” That statement ignores the central role that HIPAA already played in reducing the fear of losing coverage for people in employer-provided plans — more than half of Americans below the age of 65.
Nevertheless, the ACA certainly simplified the system, with its preexisting conditions provisions among its most popular elements. When Republicans tried to repeal the law in 2017, they discovered how difficult — and politically perilous — it was to introduce new rules and uncertainty for people with preexisting conditions.
The president earns Two Pinocchios.
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