The ACA 6 month check up (the patient seems to be a little under the weather)

This edition of the Insider is devoted to a high level overview of where reform stands politically at the six-month mark. As regular publication resumes, we’ll be digging into specific policy issues in more detail.

Public Opinion

Six months out, public opinion remains essentially stagnant with roughly equal percentages of the population supporting and opposing the new health care law. While there is some month to month fluctuation, no clear trend has been established in either direction.

The good news about public opinion is that much of what the public worries about (death panels, still; or that the ACA will increase the federal deficit) is not really part of or true about the law. People are (or would be) more supportive of the actual ACA than they are of the image of the law that they carry in their mind. More good news—focus groups consistently show that support goes up as people learn more about the law.

The bad news: It’s been extremely hard to break through the well-financed and aggressive disinformation campaign about the law. Certainly in the realm of paid advertizing, supporters are getting outspent by opponents. Furthermore, supporters have yet to come up with an effective counter campaign to match the three-pronged attack of opponents that includes unified messaging from the Republican party, the Fox/ talk-radio 24/7 media barrage and direct paid opposition messaging. Also, while overall public opinion is roughly evenly balanced, that is not necessarily the case among likely 2010 voters in hotly contested electoral races across the country.

All this underscores the importance of the outreach and community education efforts that groups are undertaking across the country. People shouldn’t expect those efforts to show up in short term swings in public opinion, but in the long run they are vitally important – and they work.

Does the public know more than they think?

Most of the public messaging from supporters is about the benefits of reform to the middle class, especially holding insurance companies accountable and eliminating pre-existing condition exclusions. But, when you ask the public who they think benefits from the ACA, the number one answer is low-income people and the uninsured. Actually, the public isn’t wrong about this. Low-income and uninsured people are the population most adversely affected by the current system, and most helped by reform. People with pre-existing conditions, the next most popular response, constitute a much smaller pool of winners.

People are much less likely to identify themselves or the middle class as beneficiaries of reform. Although the ACA takes steps to address people’s #1 concern, which is their own health care cost, they are relatively modest and probably not well known. While politicians are attempting to tout the benefits of the ACA for the middle class, there is a disconnect between the size of the ACA edifice and the benefits it appears to deliver to middle-class voters. Most political leaders and their advisers have concluded that making the case for the ACA based on expanding coverage for low-wage workers won’t help politically. But in failing to highlight the coverage issue, they risk demobilizing a group of voters for whom the ACA’s coverage provisions matter. Going forward, supporters of reform may want to be careful not to overlook the benefits of expanding coverage in their efforts to woo support from the insured middle class.

Interest Group Round Up

Insurers

Insurers are not monolithic. Some have the potential to thrive on a high-road focused on quality improvement and customer service while the bottom feeders whose business model relies primarily on cherry-picking and risk avoidance could lose market share or even go out of (the health insurance) business as the ACA gets phased in. So far, however, it is the lowest common denominator that has dominated industry political action.

Many insurers are working overtime with the NAIC and in states to blunt the potential for the Exchanges to emerge as strong, effective purchasers and to preserve maximum “flexibility” in the market outside the Exchanges, which could result in adverse selection inside. Since the decisions about how the Exchanges will function are made by the states but the cost consequences of failing to do a good job are mainly federal, there is a significant risk that the states will buckle under industry pressure.

At the same time they are working the inside to affect federal and state rules, insurers have increasingly shoveled campaign cash to Republican opponents of reform. While electing candidates committed to repeal (starting with the individual mandate, ostensibly desired by insurers) may seem like a risky strategy, bear in mind that insurers were making money even while they were losing enrollees prior to ACA passage. The conventional wisdom may be overstating insurers reluctance to see reform rolled back.

Business

Business is not monolithic either. To some extent the political stance of employers is skewed by the weight that health insurers and insurance-related businesses (e.g. brokers) have on the policy deliberations of small business associations, not to mention that many business associations may view the Exchanges as a direct competitor in the sale of insurance. In part, it seems that the opposition of some industry groups is driven more by the view that reform (or at least a distorted version of it) is a useful club with which to beat Congressional candidates in order to elect a Congress more in tune with business concerns on issues that have nothing to do with health care.

Most businesses will be unaffected by the employer responsibility requirements in the law and do not seem heavily invested in either supporting or opposing the coverage expansion per se, though they seem opposed to many of the specific financing provisions. Their major concern (like everyone else’s) is their own costs and here the business view seems to be that the ACA doesn’t go far enough…

In addition, there is concern that slower growth in Medicare payments will fuel private side cost-shifting. In truth, the ACA still leaves employers with plenty of running room to deploy their traditional cost-containment strategies—benefit buy down and shifting costs to employees.

Providers

Physicians and hospitals are divided on the law and wary of each other. Physicians are concerned about and gearing up for another Medicare Sustainable Growth Rate fight. The current provision blocking a 23% payment cut expires at the end of November. Hospitals are worried about future Medicare cuts, and hospitals and doctors are eyeing each other warily over the issue of who will control new “Accountable Care Organizations.”

Conventional wisdom is that the providers have more to gain than to lose from reform and so constitute a powerful bulwark against the rollback effort, but there is deep ambivalence within the provider community. Disenchanted physicians have become a major funder of tea-party affiliated politicians and should providers find themselves in 2013 sitting across the table from an administration hostile to the ACA, provider support could prove ephemeral.

November election outlook and the future of the ACA

First, where do things stand with respect to November Congressional races? Both the “prediction” trading site Intrade and Political website fivethirtyeight see a Republican takeover of the House as likely, with Democrats retaining a majority in the Senate.

Chance of Republican Control of House

Chance of Republican Control of Senate
InTrade

75%

25%
Fivethirtyeight

66%

22%
Repeal, really?

With this as a working hypothesis, what does it mean for ACA implementation? There is a consensus that even if they took both branches of Congress in November, repeal would be unfeasible for at least the next two years. What is unclear is how far Republicans would be willing to go in an attempt to sabotage the implementation of the law. In particular, the question is whether House Republicans would attempt to shut down government in order to deny the administration funding for implementation. Some Congressional Republicans seem eager for a showdown over health care while others are more circumspect. At minimum, expect multiple legislative and oversight actions aimed at diluting current provisions. Although Obama administration officials profess not to be losing sleep over the prospect, advocates will have no choice but to gear up to respond to the continuing attacks.

— Michael Miller, Policy Director