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Obamacare's next 5 years will be better than the first 5

Rick Newman
Senior Columnist

When the Affordable Care Act became law five years ago, nobody foresaw the bungled rollout in 2013 or the huge row over canceled plans for several million people whose policies didn’t comply with the new law. But the next five years ought to be far smoother for the health reform law known as Obamacare.

The ACA faces one more major hurdle: The lawsuit at the Supreme Court, known as King v. Burwell, over whether federal subsidies are valid in 34 states that rely on the federal exchange. If the court sides with the plaintiffs, seven million Obamacare enrollees could lose insurance, forcing a major revamp of the plan. But if the court upholds the law, Obamacare will finally be on track to become a fundamental pillar of the U.S. healthcare system, just like Medicare, the federal health program for retirees.

“Over time, more and more people are going to draw benefits from the ACA,” says Henry Aaron of the Brookings Institution. “Any [politician] running against Medicare today would be suicidal. The same thing will be true of the ACA at some point.”

Even though it remains unpopular, the ACA is accomplishing what it was meant to do: Providing health insurance coverage for those who can’t otherwise afford it. More than 16 million Americans receive health insurance through the ACA, and the Congressional Budget Office expects that number to rise to 25 million by 2020. The vast majority of people will still get health insurance through an employer, but the ACA will cut the number of uninsured by half.

It still won’t provide “universal coverage,” since there will be about 26 million uninsured Americans in 2020. That’s because the law allows many exemptions from the requirement for all adults to have coverage. But the ACA has pushed down the portion of Americans without insurance to 12.9%, the lowest level in 40 years. The uninsured rate is likely to stay there.

It also stands to reason that the ACA will gradually become more popular as negative publicity wanes. The portion of Americans who dislike the law is still larger than the portion who favor it. But the gap has narrowed recently, with 43% of Americans opposed to the law and 41% in favor of it, the smallest difference between unfavorable and favorable views since the fall of 2012, according to polls by the Kaiser Family Foundation.

Many gloomy predictions regarding the health law have failed to materialize. It hasn’t led to massive job cuts, as critics predicted, and employers haven’t dumped workers off their health plans en masse. Attitudes toward the plan will likely improve as these concerns fade.

The law, meanwhile, has developed some powerful supporters: insurance companies and health care providers that have gotten millions of new customers since the law went into effect. Since those companies have an interest in sustaining the ACA, they counterbalance the Republican wing in Congress that still wants to repeal it.

The Supreme Court is due to issue its decision in King v. Burwell in June. Obamacare will no doubt be an issue in the 2016 presidential election, though Republican opposition to the law is morphing from an outright effort to repeal to more nuanced ideas about how to modify it and fix what doesn’t work. Out-of-pocket health costs remain sky-high and unaffordable for some people with coverage through Obamacare, perhaps the biggest unresolved problem under the law.

Beginning in 2018, employers that offer lavish health plans will have to pay a 40% tax on a portion of the cost, which is likely to lead some companies to scale back health benefits. That will probably be another Obamacare controversy. But by then, a minor uproar over Obamacare may barely make the news.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .