What's in Store for "Obamacare" in 2016?

By Matthew Valeta

Obamacare’s third open enrollment period just ended and while Congress forgot to shut down the government, health care reform continues to be a regular topic for presidential candidates on the campaign trail.

For the third time, individuals and families were able to sign up for health insurance plans and see if they qualified for financial assistance to reduce their monthly premiums during the open enrollment period. Yesterday, the Department of Health and Human Services announced that 12.7 million Americans had signed up for individual private insurance policies or renewed their coverage for 2016. Since Obamacare passed, the uninsured rate has fallen from 18.2% in 2010 to under 9% as of November 2015. Uninsured Americans who did not sign up will not be able to purchase a private health insurance plan until October 15, 2016 unless they experience a qualifying life event.

A key question entering this open enrollment period was how the remaining uninsured, especially young adults, would respond to the fully implemented individual mandate. The fee for not having insurance in 2016 will rise to 2.5% of household income or $695 per adult; whichever is HIGHER.  The 12.7 million-enrollment figure is up from 11.7 million after the end of the second open enrollment period and 8 million after the first, suggesting that for some Americans, it is finally worth purchasing insurance instead of paying the penalty and going uninsured.

One of the most exciting things to see about the long-term impact of Obamacare on the uninsured rate is how many Americans are getting private insurance at less than the ‘sticker price.’ After the 2015 open enrollment period, 87% of enrollees using Healthcare.gov received financial assistance. The average tax credit for individuals is $263 per person per month (2016 financial assistance data is not available yet). While the growing cost of health care continues to be of great concern for both families and the federal budget, millions of low and middle-income Americans are at least partially shielded from the impact of these insurance premiums.

However, now that the landscape for America’s health insurance market seems to be settling, many of the leading 2016 Presidential candidates are ready to shake it back up.

Senator Bernie Sanders, while a supporter of Obamacare, is proposing a universal single-payer health system. His ‘Medicare for All’ plan would cover “the entire continuum of health care” including inpatient, outpatient, preventive, emergency, primary, specialty, long-term, palliative, vision, hearing, oral, and mental health care as well as substance abuse services, prescriptions drugs, and medical supplies. ‘Medicare for All’ is projected to cost $1.38 trillion and would be financed by a 6.2% income-based health care premium paid by employers, a 2.2% income-based premium paid by households and a progressive income tax on incomes overs $250,000. In addition, Senator Sanders proposes to tax capital gains and dividends the same as income from work, limit tax deductions for households with incomes over $250,000, and raise the estate tax on inheritances over $3.5 million.

Secretary Hillary Clinton has remained the most vehement defender of Obamacare on the presidential campaign trail and has proposedlowering out-of-pockets costs such as copays and deductibles, reducing the costs of prescription drugs, and transforming the health care system to reward value and quality.

As for the leading Republican candidates, there is general agreement about the need to repeal Obamacare. However, the amount of detail provided about what they would replace Obamacare with varies.

During the January 28th Republican presidential primary debate, Senator Ted Cruz proposed allowing people to purchase insurance across state lines, expanding health savings accounts, and unlinking health insurance from employment.

Donald Trump, who has also promised to repeal Obamacare, stated on This Week with George Stephanopoulos, “We’re going to work with our hospitals, we’re going to work with our doctors. We’ve got to do something. You can’t have a small percentage of our economy — because they’re down and out — have absolutely no protection so they end up dying.”

Senator Marco Rubio is also a proponent of repealing Obamacare and has been active in Congressional efforts to repeal parts of the law. In August 2015, Senator Rubio outlined that his health reform plan would similarly to Obamacare create an advance, refundable tax credit that all Americans can use to purchase health insurance. In addition his plan would give those with pre-existing conditions access to federally-supported, actuarially-sound state-based high risk pools and allow Americans to purchase insurance across state lines.

For the nearly 13 million Americans enrolled through health insurance marketplaces and an additional 14 million Americans who are newly enrolled in Medicaid, a lot is at stake in the 2016 presidential election. Everything from losing your coverage entirely to guaranteed access to a single-payer system is on the table. With the benefits provided by Obamacare finally settling in, the pain of a repeal would be disastrous for both the health and financial security of millions of newly insured Americans.

Matthew Valeta is an Master of Public Policy candidate at the Goldman School of Public Policy. Before coming to Goldman, Valeta was a health policy analyst at the Colorado Consumer Health Initiative.