ObamaCare’s hold growing stronger

ObamaCare is entering the pivotal year of 2016 on a stronger footing, with healthcare officials touting stronger-than-expected demand so far in this year’s sign-up season.

Over the past year, the Obama administration has driven the uninsured rate to record lows and beat back its last major Supreme Court challenge, helping to soften the often-sharp politics of the healthcare law ahead of a presidential election year.

{mosads}Signups in recent weeks have beaten last year’s totals while also bringing in a larger share of key populations like young people under age 35, signaling good news for health insurers.

“The marketplace is strong and growing,” Marketplace CEO Kevin Counihan said Tuesday after releasing extensive data on this year’s signups.

Still, major obstacles are ahead, namely a presidential contest that could result in a dismantling of the law if a Republican wins the White House. 

ObamaCare also remains a political loser, with 40 percent of voters approving and 52 percent disapproving of the law, according to a New York Times/CBS poll released this month.

The next administration will also have to quell uncertainties about the still-fledging healthcare marketplace while tackling rising prescription drug costs and trying to spread the word about the law to increasingly harder-to-reach populations.

“It’s been a great success, a greater success than a lot of people expected,” said Anne Filipic, president of Enroll America and a former Obama administration health adviser.

“But the reality is, this is a major change to the American healthcare system. … There’s still a lot of people out there who don’t even really understand what’s available to them.”

Strong sign-up season

Federal health officials have seen unprecedented demand for ObamaCare coverage in the final two weeks of the year.

Just ahead of the first deadline, 8.3 million people had enrolled — 2 million more than the same point last year. Significantly, 35 percent of those who signed up are under age 35, a statistically healthier population that is crucial to balancing risk in the marketplace. Last year’s share of young people was about 32 percent.

Demand was so strong leading up to the Dec. 15 deadline for the federal marketplace that it was extended by two full days, an exception that the administration had previously said it wouldn’t need to make. 

Heading into 2016, officials have largely shifted their attention from implementation to outreach, with 2015 marking the last time the administration has had to deal with a new part of the rollout — this time, the tax penalties for those without insurance and automatic re-enrollment into insurance plans. 

Still, officials are struggling to reach pockets of the uninsured: A recent Kaiser Family Foundation poll found that 60 percent of people without coverage said they didn’t know this year’s enrollment deadline and 80 percent said they had not been contacted by anyone about signing up.

Insurer troubles

The strong numbers offer some assurance to health insurers, which grew skittish about the new marketplace after the administration disclosed in October that it wouldn’t be fully repaying insurers for higher-than-expected claims costs.

“We are all — HHS included — really excited about what we’re seeing,” added Filipic, who has closely studied enrollment trends. “I would say that a lot of healthcare [company] leaders are probably feeling as excited as we are, and probably a bit of relief too.”

Funding for the “risk corridors” program, which was intended to shield insurers from the instability of a brand new market, was severely restricted in the last year’s budget bill at the urging of congressional Republicans.

As a result, the administration informed insurers that it would be paying just 12 cents to every $1 owed, causing chaos throughout the system. More than a dozen startup insurers created under ObamaCare, known as health co-ops, shuttered within weeks.

“It was a point in which many [companies] had to reevaluate,” said Clare Krusing, spokeswoman for the insurer trade group America’s Health Insurance Plans. 

The same budget rider applies this year, though Democrats also negotiated the pause of a costly tax on health insurers that they say will help make up for the burden.

Moving beyond pure politics

The biggest threat to ObamaCare is the outcome of next fall’s presidential election, with all GOP candidates pledging to dismantle it after assuming office. 

But earlier this summer, ObamaCare was faced with a Supreme Court challenge that would have had a crippling effect on the law by making coverage unaffordable for millions.

After the high court again ruled to uphold the law, the focus within the healthcare sector returned to issues like drug pricing.

“That was a pivotal moment,” Krusing, the insurer spokeswoman, said. “Once we had that certainty with Supreme Court case, it was, ‘Now what are the key issues we have to pick up again? And it really was those cost challenges.”

Prescription drug spending rose 13 percent alone in the last year, elevating it to the agenda of presidential candidates in both parties.

A target on Capitol Hill

The healthcare law also took a hit with the pause of several taxes — including the excise tax on high-cost health plans called the “Cadillac tax” — in the most recent budget standoff. The budget also paused the medical device tax, a key funding mechanism for the law. 

Beyond the budget talks, the politics of the healthcare law continue to be divisive. Republicans are set to send a near-full repeal to Obama’s desk in January, setting up a veto battle ahead of the State of the Union address. 

But Democrats are likely to seize on the lack of alternative healthcare plan from the GOP, either in Congress or on the campaign trail.  Newly elected Speaker Paul Ryan (R-Wis.) has vowed to put forward such a plan sometime in 2016.

“When we return in January, the House will put an ObamaCare repeal bill on the floor and pass it and put it on the president’s desk,” Ryan told reporters on his last day at the Capitol in December. “We are going to keep working to give families relief from this law while we work to dismantle and replace it altogether.”