In a speech at the White House today, President Barack Obama will seek to redirect public attention away from the slow but steady drip of recent news stories about the imperfections of Obamacare. Exactly how the law will work is still a mystery to most Americans and, in this vacuum, Republican opponents of the law have renewed attacks on the health care overhaul and seized on the Administration’s admission that some parts of the Affordable Care Act (ACA) will not be ready on schedule. The President’s speech is the latest response from a White House that has long been on campaign footing around the new law.
“There’s a lot that’s been said and kicked around about the Affordable Care Act, but tomorrow the President will break down in very real terms what this policy really means,” said a senior Administration official on a call with reporters on Wednesday afternoon. The President’s speech will highlight some $500 million in rebate checks sent to more than 8 million consumers as a result of Obamacare — an effort to “step away from the distraction, which is the Washington noise,” another official told reporters.
Indeed, the insurance-company rebates sent out, which the Administration says average about $100 per family, are good news for some. A part of the ACA already in place and known as the “medical loss ratio” (MLR) requires insurers to keep no more than 20% of premiums for profit and administrative costs. If insurance companies exceed this threshold they are required by the ACA to return the difference. Some families that have received rebates as a result of this provision will surround the President while he delivers his speech on Thursday.
The White House is hoping this tableau will distract Americans from the Administration’s recent admission that the law’s requirement that larger employers provide health coverage for workers will be delayed. The employer mandate, as the requirement is known, will instead begin in 2015. On Wednesday, Republican leaders in the House orchestrated votes to delay by one year both the employer mandate and the individual mandate, the latter of which requires individuals to carry health insurance or face federal fines. Neither House vote will have real policy implications, as the employer mandate is already put off until 2015 and the Democrat-controlled Senate would likely block any effort to delay the individual mandate, a key component to the ACA functioning as intended.
The real test of whether Obamacare will work as promised will come in October, when state-based health-insurance marketplaces, known as exchanges, come online for the start of an open-enrollment period. To prepare for this deadline, the Department of Health and Human Services has invested a reported $267 million in a massive computer system that will allow regulators to determine which Americans are eligible to buy coverage through the exchanges and receive Obamacare-funded subsidies to make coverage more affordable. In the call with reporters on Wednesday, senior Administration officials said they expect competition between insurers in the exchanges to produce more affordable health insurance and more consumer choice.
A study conducted by the Department of Health and Human Services, and set to be released today, shows that health-insurance costs in the exchanges may be lower than expected. Of 11 states included in the study, the cost for the cheapest “silver plan” to be offered in the exchanges will be, on average, 18% lower than estimates made by the Congressional Budget Office. (Policies in the exchanges will be categorized as bronze, silver, gold or platinum, depending on how comprehensive their coverage is.) Asked why the Administration focused on these 11 states, which don’t include any Southern states with large uninsured populations, the senior Administration officials said they were chosen based on the quality of their health-insurance price data.
In his speech today, it’s likely the President will mention a recent report that consumers buying insurance in New York State’s individual market will see dramatic declines in premiums in 2014 thanks to Obamacare.
President Obama has not hesitated to invest his own time in health care reform when it has seemed to be on the ropes politically. Close watchers of the debate that preceded passage of the Affordable Care Act will remember that Obama gave a special address to Congress to push for reform in September 2009 and spent an entire day in February 2010 moderating a public health-care-policy discussion between Republican and Democratic lawmakers to push the law over the finishing line.
Throughout the past several months, as Republican lawmakers have renewed efforts to repeal pieces or all of the law in the House and the Administration has been forced to concede that some of the law’s implementation regulations will not be ready on schedule, Obama has been back on the stump. In May, he delivered a White House speech on Mother’s Day touting the ACA and followed up in June with a similar speech in California. Whether today’s health care speech can hold up the reputation of the ACA until it actually begins working depends simply on what happens tomorrow.