Code blue

WASHINGTON—Last April the Department of Health and Human Services reported some 8 million Americans had enrolled in health insurance plans under the Affordable Care Act. President Barack Obama stood in the White House Rose Garden and proclaimed the law a success: “The debate over repealing this law is over.”

But as the second open enrollment period gets under way, a string of bad news is casting new doubts on the president’s proclamation. The website works this time, yet systemic problems are growing: Companies are shedding jobs, rural hospitals are closing, premiums remain high, penalties have spiked, and the administration has admitted last year’s enrollment figure was inflated. Actual first-year enrollment numbers landed at 6.7 million—leading the administration in November to lower 2015 enrollment expectations from 13 million to less than 9.9 million.

The main thrust of the Affordable Care Act (ACA) is to increase access to healthcare, but on a surprisingly large scale it’s having the opposite effect. Millions of Americans lost their health insurance because their plans didn’t meet the requirements of the law, accounting for a large portion of the 6.7 million 2014 enrollees. Ed Haislmaier, a health policy expert at the Heritage Foundation, estimates a maximum of 2.4 million previously uninsured individuals obtained insurance through the state and federal exchanges. Others have lost healthcare access through hospital closures: Forty-five rural hospitals have shuttered since 2010, including at least a dozen this year, according to North Carolina Rural Health Research Program tracking data. The closures are primarily due to new regulations and cuts to Medicare/Medicaid reimbursement, but rather than helping reverse the alarming trend, the ACA has accelerated the process.

“It’s going to get worse,” said Carla Roadcap, the former CEO of a 25-bed hospital in rural Linden, Texas. Roadcap told me her facility was already struggling financially, and knowing the ACA would bring more cuts in 2015 prompted the three-hospital system to close that location, affecting about 100 employees. Now the closest hospital is another rural location 15 miles away, the sole firewall saving Linden residents from a 35-mile drive—which would put thousands at risk of missing the “golden hour” for treatment after a major medical incident, such as a stroke or heart attack.

“It’s obvious to anyone working in healthcare that the healthcare delivery system needs to be changed,” Roadcap said. “How it needs to be changed is a whole different question.”

Today’s system still relies heavily on employment, and that’s another area where Obamacare is wreaking havoc. Companies are making choices to cut hours, cut the workforce, and in some cases close locations to cut costs or slide under the 50-employee threshold that requires a company to provide health insurance. Others are dumping employees into the health exchanges, risking the fines that will accompany enforcement in 2015 (see sidebar).

“This is exactly what our survey predicted,” said Duke University Professor Campbell Harvey, who helped poll more than 1,000 chief financial officers a year ago to ask how they would handle the ACA. Between 40 and 50 percent reported they would hire fewer workers, shift toward part-time employment, and/or lower health benefits. “The impact on the real economy is astonishing,” Harvey said, and the country is “definitely” still in the early stages of feeling the effects.

As the nation’s labor participation rate already languishes at historic lows, the Congressional Budget Office this year projected the ACA would directly lead to the loss of 2 million full-time-equivalent workers by 2017, rising to about 2.5 million in 2024. Harvey said that “significantly understates the legislation’s impact,” because it is based on historical patterns and doesn’t reflect companies planning to hire less and shift to part-time labor.

Harvey believes if more people had understood the real effects of the law, the legislation would likely have never passed. He’s not alone: Jonathan Gruber, a Massachusetts Institute of Technology professor and Obamacare architect, sparked a public relations nightmare in November when videos surfaced showing him crediting secrecy and the “stupidity of the American voter” for getting the law through Congress. In Dec. 9 testimony before a House panel, Gruber issued a blanket apology for his “insulting and mean comments” but defended the law and claimed it was passed in a transparent way. “My flaws as a private citizen should not reflect on any process by which the ACA was passed, or any success of that law.”

Heritage’s Ed Haislmaier, who was part of a panel discussion with Gruber earlier this year, said the professor’s attitude in the videos is typical: “There’s plenty of folks in health policy on the left who believe the same way.”

All this has left Obamacare’s approval ratings in the tank, forcing even some senior Democrats to distance themselves. Following big GOP gains last month, Sen. Chuck Schumer, D-N.Y., who faces reelection in 2016, said Democrats “blew the opportunity the American people gave them” after the 2008 election and shouldn’t have put their energy into passing Obamacare. Schumer’s comments were more about political strategy—he still supports the health law—but it was a stunning admission from the Senate’s No. 3 Democrat.

Retiring Sen. Tom Harkin, D-Iowa, went after the substance of the law in a Dec. 3 interview with The Hill, saying the law is too complicated and doesn’t lower costs. “We should have either done it the correct way or not done anything at all,” said Harkin, who helped author the bill as chairman of the Senate Health, Education, Labor, and Pensions Committee.

Harvey told me he thinks “people from both sides would entertain a reexamination with a clean slate.” They may get that chance. In November the U.S. Supreme Court agreed to hear a case challenging the subsidies the federal government is giving to lower-income enrollees in the 36 states that didn’t set up their own exchanges. The law says tax credits are available through marketplaces “established by the state,” but the administration in 2012 made them available in all 50 states.

The implications are huge: About four out of five enrollees receive a subsidy and many of them likely couldn’t afford the coverage without it. That means the law could be in tatters as early as next June, weeks after the end of the second open enrollment period. If 2015 enrollment barely grows, Haislmaier said, “then the argument that I and others make is just to scrap this complicated system with a much more straightforward subsidy for people to go on the open market.”

WORLD and Obamacare

WORLD News Group employs 58 individuals full time as of Dec. 1. The Affordable Care Act requires all companies with more than 50 employees to provide health insurance or pay an annual fine—$3,000 per employee for offering substandard coverage or $2,000 per employee above 30 employees for offering no coverage at all.

WORLD has for many years provided health insurance to its employees, but the ACA has made it increasingly difficult to find plans that are affordable and come without coverage for abortions and abortion-inducing drugs. Since it has become virtually impossible to predict and control costs, WORLD is moving its staff to a healthcare sharing ministry (see “Growing in a loophole,” June 1, 2013) beginning in January.

The new arrangement will satisfy the requirements of the individual mandate for employees, but it will not satisfy the requirements of the employer mandate. Although WORLD may have to pay as much as $56,000 in fines, it will be able to lower costs, predict costs, and still provide ethical coverage to its employees.

“We are stewards of both the financial resources God provides through our members and the individuals and families He places under our care as employees,” said WORLD CEO Kevin Martin. “The ACA has made those two responsibilities mutually exclusive. We believe our move to a healthcare sharing ministry will best enable us to fulfill our responsibilities to our members and our employees.” —J.C.D.