by Nicole Huberfeld, Ashland-Spears Distinguished Research Professor of Law, University of Kentucky
The Patient Protection and Affordable Care Act (also called Obamacare) has extended health insurance coverage to more than 20 million Americans and achieved historically low un-insurance rates, yet most do not know much about the law or why its dramatic measures were necessary. The ACA responded to a constellation of health care and health insurance failures, including that un-insurance had reached an historic high of more than 16 percent at the time of the 2008 election. Fewer and fewer employers offered health insurance as an employment benefit for more than a decade before President Obama was elected and those that did had significantly increased employee cost sharing over time. The long-standing American assumption that people who work have health insurance was no longer true.
Further, the uninsured were concentrated among the working poor, who were not offered health insurance as an employment benefit or could not afford insurance that was offered. Though slightly more than half of Americans receive health insurance as an employment benefit, that is only meaningful for people earning more than the average income of about $51,000 per year. For people earning below 400 percent of the federal poverty level ($47,250), employers are significantly less likely to offer health insurance; part-time workers are even less frequently offered health insurance.
Additionally, individual and small group health insurance markets have had such high prices as to be inaccessible. And, in every market, insurers used tools such as preexisting condition exclusions, caps on coverage and other discriminatory practices to eliminate subscribers deemed not healthy. While public financing covered the elderly in Medicare, for the poor, Medicaid has offered an incomplete safety net, only covering the “deserving poor”, which meant about 40 percent of low-income individuals. The nation’s millions of uninsured citizens sought treatment in emergency rooms, which offered a point of rescue but not a permanent source of access to care (and which was unsustainably expensive for hospitals).