When Caroline Corum was first diagnosed with breast cancer, she hardly paid attention to the bills. As a 52-year-old nurse from Arlington, Va., Corum’s treatments were largely paid through insurance from her employer.
But that changed when the disease forced her to leave her job and take disability last year. Suddenly faced with exorbitant costs and the prospect of losing her doctors, Corum signed up for coverage with a nearly $700 monthly premium through the COBRA health insurance law, which lets former employees temporarily keep their employer insurance at a higher cost.
Although expensive, the plan offered no deductible and a $3,500 out-of-pocket spending limit.
Her cheapest insurance plan option under the 2010 health care law, meanwhile, had a $600 premium with a $7,000 deductible and a $8,150 out-of-pocket cap. She only qualifies for a federal subsidy of less than $100 per month, she says, because of rental income from a studio she owns and her disability pay.
“To sum up, little or no overall cost difference,” Corum says, adding she prefers “the devil you know versus the devil you don’t know.”
All told, she estimates that she pays $1,500 a month for her medical care now. She projects she only has a few years before her savings are gone.
Corum’s case illustrates why, 10 years after the passage of the health care law that became known as the Affordable Care Act and which was intended to give patients less costly options, more work remains to be done.
To be sure, the 2010 law succeeded in significantly improving health insurance for many people facing difficult situations. People who qualify based on their incomes can typically get essentially free care if their state expanded Medicaid or federally subsidized insurance through new online marketplaces.
Before the law took effect, cancer patients like Corum sometimes couldn’t get private insurance at all. If they were lucky enough to find a plan that offered them coverage, patients with preexisting conditions often faced unaffordable bills or limited benefits.
It was this insurance practice of discriminating against preexisting conditions that President Barack Obama’s law sought to solve. But while it ushered in a number of much-needed changes to strengthen benefits and provided new coverage to more than 20 million people, the law did little to curb rising costs like premiums and deductibles. The law, as implemented, mostly ignored the underlying driver of those rates — the price of medical care and prescription drugs.
Even as the number of people with insurance has soared, costs for some consumers remain an intractable personal challenge and a growing political concern. The law has been a gift and a curse for both parties since 2010, helping propel Republicans into office in the years after its passage, but costing them the House in 2018 after a series of repeal attempts fell short in spectacular fashion.
Now Democrats are again staking their campaigns on health care as they acknowledge the law was not enough. Presidential contenders are split on how far to expand government-run coverage, but stand united in their belief that changes need to happen for patients like Corum.
Corum’s situation prompted her to get involved with advocacy groups like Health Care Voter, and to lobby for Democrats’ proposals to lower drug prices. She entered a clinical trial after the cancer spread to her liver, and says she’s fortunate to receive extra attention from physicians and have the cost of her treatments — which totaled nearly $40,000 in just one month last year — largely covered for now through either the trial or COBRA, officially called the Consolidated Omnibus Budget Reconciliation Act.
But her situation could turn dire in an instant. Metastatic breast cancer is a lifelong diagnosis, often resurfacing in other parts of the body.
“Literally you get up every morning and play Russian roulette,” she says. “You just don’t know.”
In the final months of debate over the health care law, Obama famously carried a letter with him every day from Natoma Canfield, a self-employed Ohio woman whose situation illustrated the insurance industry’s failures.
Canfield, who had been in remission from cancer for more than a decade, was forced to drop her health plan after successive rate hikes finally made it unaffordable. She noted that her premiums rose 25 percent in 2009, detailing how she paid more than $10,000 for premiums and medical care while her plan paid just $935.
Days after Obama read Canfield’s letter aloud to executives from insurance companies, she collapsed. She sat in a hospital, facing another bout with cancer, as Obama signed the bill into law.
The saga demonstrated the hurdles to insurance and the precarious situations for people without coverage that existed before the law. Earlier this year as the law’s 10-year anniversary approached, Canfield told a News 5 Cleveland television reporter, “The whole thing was not perfect from the beginning but it had a lot of promise.”
Kristine Grow, spokeswoman for America’s Health Insurance Plans, credits the law for rewiring insurance from a business-to-business industry to a more consumer-focused enterprise. But she disagreed the law was needed to address problems like discrimination against preexisting conditions.
“It wasn’t about whether or not health insurers supported those protections,” she says. “It was just a fundamentally different kind of market and a fundamentally different way that it all worked.”
When the law’s coverage launched in 2014 for people without other affordable options, insurers in the law’s new marketplaces, known as exchanges, suddenly had to contend with significant financial risks associated with sick patients like Canfield. The law also required broad health care benefits. Premiums subsequently jumped 24 percent on average across the individual market when the exchanges opened, according to a Brookings Institution analysis. Exchange plan premiums then increased almost 10 percent from 2014 to 2016, according to the nonpartisan Kaiser Family Foundation.
The trend continued after Obama left office. Average premiums in the exchanges — which cover about 4 percent of Americans — spiked 54 percent to $462 per month between 2016 and 2020, pushed along by actions from President Donald Trump and Republicans to pick the law apart.
As rates skyrocketed, so did out-of-pocket amounts. Deductibles for popular silver-level plans, which cover about 70 percent of costs, increased 87 percent between 2014 and 2020, averaging more than $4,500, according to the Kaiser foundation.
The majority of exchange plan enrollees — those with incomes up to four times the poverty level — were shielded from the full force of premium increases through federal tax credit subsidies, while a smaller share of lower-income people received additional subsidies for out-of-pocket costs.
Separately, those with incomes of up to 38 percent above the poverty line received essentially free coverage if they lived in a state that chose to expand Medicaid, the federal-state program for the poor.
But for those who weren’t covered through their employer, the law’s subsidies or Medicaid expansion, ballooning costs hit them straight in the pocketbook.
Plagued with debt
Medical-related bankruptcy was a key target of the health care law. Yet households with overdue medical bills file bankruptcy at about the same rate as 10 years ago, according to a 2019 study by researchers from Hunter College, City University of New York and Harvard Medical School, which received survey responses from 910 debtors.
The researchers found that 58.5 percent of bankruptcy filers from 2013 to 2016 cited a medical expense as a contributor, nearly the same as the 57.1 percent of debtors in 2007.
Medical bills still remain the top reason Americans file for personal bankruptcy, where around two-thirds of bankruptcy filers cited medical bills or illness as a reason.
The Consumer Financial Protection Bureau points to medical debt as a leading cause of bills in collections. As one reflection of that, the last 10 years saw the rise of the crowdfunding site GoFundMe, where roughly one-third of fundraisers are devoted to medical costs.
About 8 million Americans have started a medical-related campaign for themselves or someone in their household and more than 12 million Americans started a campaign for someone else, according to a February study using a survey of 1,020 adults by NORC at the University of Chicago, a nonpartisan research institution. About 50 million people, or 1 in 5 adults, donated to such crowdfunding campaigns.
Pluses and minuses
On one hand, the law helped consumers by cutting the number of uninsured roughly in half, offering insurance that capped consumers’ out-of-pocket costs, and banning some of insurers’ worst practices.
“Going to the hospital uninsured and getting a $100,000 bill is much different than going to the hospital with a $10,000 deductible,” says Joel Ario, a former Obama administration health official who now works as a consultant, comparing the climate before the law to the one after enactment. “The [law] advanced the ball in important ways. But clearly we have to continue to take incremental steps forward.”
Having insurance is still no guarantee against bankruptcy.
“It gave more people access to the system. But the system was not fixed, and in some ways got worse,” says Steffie Woolhandler, a primary care doctor with Physicians for a National Health Program, an advocacy group that supports single-payer health care. “People have big gaps in coverage, these huge copays and deductibles, uncovered services.”
A 2019 study from the Commonwealth Fund found that while the law significantly reduced the number of Americans who are uninsured, about 23 percent of adults under the age of 65 were underinsured in 2018 — up from 16 percent in 2010. Commonwealth defined underinsured in three ways, including whether their deductibles were 5 percent or more of household income.
Part of the reason why so many U.S. residents are underinsured is because out-of-pocket costs have been rising.
The average out-of-pocket limit in the most common type of exchange plan with a combined deductible of medical and drug costs grew to $7,735 this year for individuals with income over $31,225, according to the Kaiser Family Foundation.
Deductibles have become far more prevalent for employer-sponsored insurance, too, which is the most common way Americans get coverage. The percentage of workers who faced an annual deductible before insurance pays their medical costs rose from 59 percent of workers in 2008 to 85 percent in 2018, according to Kaiser.
The average deductible rose 212 percent during that time, from $433 in 2008 to $1,350 a decade later. The averages include workers who don’t have a deductible.
Sara Rosenbaum, founding chair of the Department of Health Policy at George Washington University’s Milken Institute School of Public Health, says problems involving the exchange plans are circular. Costs are high and coverage is thin on the exchanges because not enough healthy people could afford to enroll.
“The whole thing comes back on itself in terms of not enough money spent on the coverage subsidies, both in terms of the cost-sharing assistance and assistance for premium support,” she says.
The price tag was a significant factor in the law’s enactment, which ultimately ended up adding taxes totaling around $1 trillion to pay for it.
“There was a lot of focus at the time on bringing the bill under $1 trillion,” says Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under Obama. “That, I think, in retrospect turned out to be a mistake because if it had been done properly, the subsidy levels would have been higher.”
While Republicans disagree that subsidies should be higher, they often cite the high cost of coverage for consumers who don’t qualify. Seema Verma, who succeeded Slavitt as CMS administrator under Trump, has borne a large share of criticism in her role overseeing the exchanges and Medicaid.
Still, Verma credits the law for expanding coverage for preexisting conditions, in addition to other changes like establishing a center to test new ways to pay for medical services. But coverage protections don’t matter if you can’t afford a plan, she said in an interview.
“We’re still increasing health care costs, they’re still higher than the GDP and we haven’t really figured out what are those underlying issues,” Verma says. “And that’s where I think it’s been its biggest failure.”
Patients in all types of insurance, whether offered through their jobs or the government, also still take on medical debt after facing claims denials, even for medically necessary procedures. That makes some patients like Tennessee resident Kristen Grimm feel like they pay premiums for nothing.
Grimm says she has “serious medical debt” from both before and after the law was enacted because of her 19-year-old son’s vascular problems. That includes a whopping $54,000 she owes a children’s hospital in neighboring Arkansas because of a clerical issue last year with her family’s employer-provided COBRA plan.
In 2019, an unexpected $103 bump in Grimm’s $3,000 monthly premium caused her to lose the coverage when she paid the previous monthly cost, and her insurance company denied payment for her son’s surgery.
The insurance company sent her a letter saying it would restore coverage for January, when her son had received the surgery, if she paid the remainder by Jan. 31. She received the letter on Feb. 4. The insurer still refused to pay the $54,000.
“Health care executives are finding ways to deny services and surgeries; that’s a big part of medical debt,” Grimm says.
She became active advocating against the health care law’s repeal, but has since begun pushing for a single-payer system. She founded a group called Mothers for Medicare for All in Tennessee last September.
“I had an epiphany standing in my kitchen. I had to fight so hard to get approval for my son’s 24th surgery because the insurance company pulled a fast one,” she says. “The season of incremental improvements is over. Too many families are still suffering.”
Gold mine for some
In part because the law did little to curb costs, health care remains highly profitable. Following an expected decrease once the law’s major coverage provisions took effect in 2014, profits for insurance companies in the individual market steadily rose, according to a Kaiser Family Foundation analysis.
The law’s expansion of Medicaid also sparked a gold rush for insurance companies, which promptly snapped up more state contracts to administer the expanded benefits. Medicaid made up 13 percent of insurance business in 2010, according to ratings agency A.M. Best, but 27 percent in 2019. Net premium income from Medicaid more than tripled in the past decade, rising from $61.3 billion in 2010 to $230.5 billion in 2018.
Insurers’ net Medicare premium income, meanwhile, more than doubled from $93.5 billion in 2010 to $226 billion in 2018, fueled by aging baby boomers.
S&P data show that the exchanges, Medicare and Medicaid made up 66 percent of fully insured business in 2018, compared to 44 percent in 2010. S&P Global Ratings Director Deep Banerjee says the shift will continue.
“That’s the trend of the future,” he says.
Hospitals have seen less benefit from the increase in government-sponsored programs, although that varies by health system. Safety-net and not-for-profit hospitals benefited from the reduction in uncompensated care, but not from the rise in high-deductible plans. For-profit systems take care to position themselves in areas and fields that have less exposure to Medicaid, according to S&P Director David Peknay.
“These companies pick and choose which markets they want to be in,” he says.
The trends haven’t escaped lawmakers’ attention. Massachusetts Sen. Elizabeth Warren, formerly a Democratic presidential contender, chastised an Anthem executive in 2017 for raking in “buckets of taxpayer money” while fleeing the exchanges.
“If you’re curious about why the majority of Americans support Medicare for All, here’s Exhibit A,” she told the executive during a Health, Education, Labor and Pensions Committee hearing.
Virginia Democrat Tim Kaine piled on. Anthem had just announced it was withdrawing from the exchanges in Virginia, citing market volatility and uncertainty under the Trump administration. The move was tantamount to insurance companies “holding a knife up to their own throat,” he said, warning that the industry’s behavior would eventually lead Congress to create a public option to compete with private insurers.
”And when that day comes, we won’t just allow them to buy in if insurance companies don’t cover their county,” Kaine said.
Flash forward to 2020, and those prophecies look increasingly prescient, even if the chances for wholesale overhaul in the short term remain thin.
Both Democrats and Republicans have turned their attention to prescription drug prices and surprise medical bills — two cost concerns the law hardly touched — while liberals like Vermont Sen. Bernie Sanders (an independent seeking the Democratic presidential nomination) are winning votes on a single-payer platform.
The concerns have drawn some Republicans in on congressional efforts tackling drug prices and surprise bills, even as the GOP denounces Democrats’ Medicare for All promises as delusional socialist rhetoric.
Democrats paid a steep political price for the health care law after its enactment in March 2010. Republicans reclaimed the House that November before gaining control of the Senate in 2014. The GOP also deepened its majority in the House while claiming statehouses and legislatures across the country that year. The pummeling exposed a rift among Democrats over Obama’s decision to focus on his health care overhaul — the tangible impacts of which ultimately touched a small slice of voters.
Senate Minority Leader Charles E. Schumer of New York, the chamber’s third-ranking Democrat at the time, said the party “blew the opportunity the American people gave them.”
“The plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” he said then. “But it wasn’t the change we were hired to make. Americans were crying out for an end to the recession, for better wages and more jobs, not for changes in their health care.”
But six years later, health care is polling as voters’ No. 1 issue and Schumer is all in on the message.
The Republican effort to overhaul the 2010 law gave Democrats a renewed edge on health care — and shot the issue to the forefront of voters’ minds.
It was fairly early in 2017 when Democrats were citing the chance to defend the health care law as a reason to run for Congress. As the law’s popularity surged, Republicans’ years-long vow to repeal the law became a liability. In 2018, Democrats took back the House on promises to protect guaranteed coverage for preexisting conditions, which became a flashpoint after the Trump administration began arguing in a high-profile lawsuit that those protections were unconstitutional and should end.
Democrats are continuing to recite the message this year. Trump vows to maintain the law’s protections for preexisting conditions, although his administration is attempting to overturn the law in full in a case the Supreme Court has agreed to hear during its next term starting in October.
Questions have swirled around what the administration would do if the law is struck down.
“We wanted to make sure that people with preexisting conditions have the protections that they need and to make sure there were no disruptions in coverage,” Verma says in response to whether a contingency plan is in place. “And work with Congress to find an appropriate way to assure that Americans that need help have the help that they need and that we are doing that in a construct that actually addresses the underlying issues in our health care system.”
Issue No. 1
Both parties hope to assume the mantle of addressing rising health care costs, a top priority for voters.
“Any Democratic candidate is going to focus on both the cost issue as well as preexisting conditions,” says Dan Mendelson, the founder of Avalere Health and a former Clinton administration official.
Ever since Democrats sought to emphasize their commitment to the law in 2018, the party has debated how best to expand its reach. In congressional hearings and on the debate stage, Democrats have considered whether to expand the size and availability of the subsidies that help people afford insurance, or move beyond the 2010 law to establish a single-payer system.
The political turmoil over the law may have led, at least in part, to the debate over Medicare for All, says Melinda Buntin, chair of the Department of Health Policy at Vanderbilt University.
“Ironically, one of the reasons we are having this discussion about single-payer is because the ACA has been so unsettled,” she says, using the law’s acronym.
John McDonough, a professor of the practice of public health at Harvard University, says the law has survived efforts to repeal it and hits from the judicial system, emerging from those threats with its signature components intact.
“It has proven far more durable and long-lasting than many people gave it credit,” says McDonough, who was a senior adviser to Senate Health, Education, Labor and Pensions Committee Democrats when the law was crafted. “The key structural elements are standing in place and partly because, with the exception of Medicare for All, there’s no big vision of what else to do.”
But in spite of Democratic presidential contenders’ promises for another overhaul, their visions may be too ambitious. Political forces are almost certain to sink any attempts at a single-payer system, and industry groups vigorously oppose more incremental updates like a public option.
“There’s only so much you can take on in any one bill. I don’t believe that you’re ever one and done,” says Slavitt, the former CMS acting administrator. “Any presidential candidate that is talking about a single bill that is going to fix the health care system — it just doesn’t work that way.”
Sandhya Raman contributed to this report