President Obama Pushes for ‘Public Option’ in Affordable Care Act

In medical journal article, president defends signature health law, acknowledges shortcomings

By Louise Radnofsky
July 11, 2016 6:35 p.m. ET

WASHINGTON—President Barack Obama, reviewing his signature health law six years into its implementation, is suggesting Congress and his White House successor add a government-run, or public, insurance option to the Affordable Care Act and increase federal financial assistance for people to buy coverage.

Writing as Barack Obama, J.D., in the Journal of the American Medical Association, the president lauded the health-care overhaul and excoriated its opponents, arguing the law has sharply reduced the number of uninsured in the U.S. and improved coverage for those who had it.

“The Affordable Care Act is the most important health care legislation enacted in the United States since the creation of Medicare and Medicaid in 1965,” he wrote. “Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.”

The article appeared as a “special communication” in which he offered evidence, findings and a description of their relevance. Among its most striking sections were those in which he acknowledged the law’s shortcomings and advocated responses to them. In his call for a public option, he noted the existence of parts of the country with limited insurance competition, where customers may have no choice but to swallow high premiums.

The piece reflects the president’s efforts to solidify the legacy of his signature law in his last year in office, especially as it comes under attack from Republicans who have vowed to repeal it.

It also arrives in the middle of an election campaign in which the health law is a defining issue for the two parties’ candidates for president and Congress.

The presumptive Democratic nominee Hillary Clinton backs the addition of a public option. On the Republican side, GOP House leaders have released their platform to strike most of the health law, and create different and potentially more limited tax credits and insurer requirements so people could buy coverage on their own.

In addition to criticism of Republicans for seeking to repeal the law in the piece, Mr. Obama repeated his call for 19 states to extend eligibility for Medicaid to all low-income residents as part of the law. Those states say neither their budgets nor Washington’s can afford to expand the program further.

The president advocated new changes that are aimed at more current concerns about the law, including the number of options and prices for coverage on the exchanges.

The biggest insurers selling individual coverage through and state equivalents have begun to seek dramatic premium increases for 2017, saying they need to recoup losses from the first few years. Some have pulled their offerings entirely from certain areas or whole states, leaving areas of the country where residents may have only one carrier to buy from.

Many liberal members of Congress fought bitterly in 2009 and 2010 for the law to include a public option that could be offered alongside private plans to people who don’t have access to coverage through a job or government program for specific groups of people such as Medicare. Mr. Obama said he had supported those members.

“More can and should be done to enhance competition in the Marketplaces,” Mr. Obama wrote. “Public programs like Medicare often deliver care more cost effectively by curtailing administrative overhead and securing better prices from providers. The public plan didn’t make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.”

Competition, however, hasn’t been the only problem for the law. The single largest group of the remaining uninsured are people who could obtain coverage as a result of the law but choose not to. They argue they are financially better off paying for care in cash than squeezing premiums into their budgets.

Mr. Obama said one answer was boosting the financial assistance offered by the law to subsidize the cost of premiums for people with incomes between the poverty line and four times that much, which for a family of four extends to around $97,000 for 2016. That “would help middle class families who have coverage but still struggle with premiums,” Mr. Obama wrote.

The idea has been floated by some of the law’s most ardent advocates recently, but few others.

Aides said the president was suggesting offering larger subsidies to people who already qualified for them, rather than expanding above that range. Currently, the subsidies are on a sliding scale that is pegged to income and the local cost of coverage for individuals, leaving some plans almost free of charge to participants but with younger people at the higher end of the income range getting only slim discounts on coverage.

The increase could be funded by drawing on savings from the law coming in under budget in its early years, when premiums were lower, Mr. Obama suggested.

Adding a public option and boosting tax credits would both require congressional action, and that is unlikely this year, White House staff said. In his article, Mr. Obama made few overtures to the GOP-controlled House or Senate.

“Any change is difficult, but it is especially difficult in the face of hyperpartisanship,” he wrote, before accusing Republicans of acting in bad faith for refusing to support ideas they had supported earlier once they were part of the health law, and undermining its implementation through “inadequate funding, opposition to routine technical corrections, excessive oversight, and relentless litigation.”

Such criticisms have been traded between Mr. Obama and Republicans for the entire life of the Affordable Care Act, with GOP lawmakers countering that the law was pushed through by Democrats using secretive and aggressive tactics, and that Mr. Obama has since abused his executive authority to implement it.