The Takeaway: Reflecting on the ACA
It was a big week for reflecting on the accomplishments of, and challenges facing, the ACA and the U.S. health care system. President Obama released an article in JAMA summarizing what the ACA has achieved to date, and where health policy needs to go in the years ahead. Politico also did a special issue on the achievements, challenges and politics of health reform, and in Health Affairs, the CMS Office of the Actuary released new forecasts on health spending.
Here are some of the key takeaways:
The President’s Agenda
In his JAMA article, the president outlined a five-part agenda for health reform going forward: closing the Medicaid coverage gap in the remaining 19 states; reforming the delivery of health care; improving affordability; strengthening the Marketplaces; and, reining in drug prices. Before delving into these, it is important to flag what feels like the big miss in this agenda: addressing health disparities.
Despite the progress made by the ACA, life expectancy, health status and even access to health care remain greatly affected by the interlocking factors of race, class and geography. While the U.S. spends far more than other developed countries on medical care, it invests less in policies and programs that maximize health in the first place. Of course, it is not possible to address every health-related topic in a single article, but given that the president still commands the bully pulpit, the failure to highlight this issue seems like a missed opportunity.
Closing the Coverage Gap
President Obama called on the remaining 19 states to take advantage of the almost-full federal financing to extend Medicaid to all low-income adults. However, Politico’s survey of health care “experts” projected that getting to 100 percent could take as long as 10 years. That said, if Hillary Clinton becomes the next president, the pressure on states to take the federal money is sure to increase. That’s not because Clinton will be any more popular or persuasive than President Obama, but because a Clinton win would place the final nail in the “repeal” coffin. At the same time, the economic and moral case for closing the gap will continue to strengthen as both the positive effects of coverage and the consequences of failure to cover become ever clearer. (For example, see this new report on closing the gap and infant mortality in North Carolina, as well as the cross-state comparison between Tennessee and Kentucky.)
Affordability – It’s Not Just About the ACA (and It’s Not Just About the Federal Government)
President Obama called for stepped-up efforts to educate people about the availability of financial assistance under the ACA, as well as for increasing the amount of financial assistance. But clearly advocates have more work to do to educate policymakers about the need to take action to address affordability problems. In response to a question about affordability, Secretary Burwell mainly talked about cost containment and stabilizing the Marketplace risk pool. These are important topics, but not really answers for people struggling to pay premiums and out-of-pocket costs. And while the share of health expenditures paid out of pocket may be flat as a percentage of total health spending, the shift from copayments to deductibles has made budgeting for health care spending harder. And with wages stagnant, out-of-pocket costs are taking a bigger bite out of family budgets even if they don’t represent a bigger share of total health spending.
Most importantly, out-of-pocket health spending is an issue that concerns far more people than are covered on the ACA Marketplaces. Any solution to the affordability issue is going to have to look beyond the current universe of people eligible for cost-sharing assistance. Realistically, given Congressional gridlock, advocates will need to look to a combination of administrative and state action to make any progress on this issue in the near term.
Marketplaces – What’s Really Going On?
Perhaps the greatest contrast between the picture of the ACA painted by the administration and the one painted by Politico lies in their depiction of the Marketplaces. The President points out that 88 percent of enrollees live in counties with at least three insurers, and Secretary Burwell notes most people can find a plan with a premium of $75 per month or less. But Politico writes about insurers losing money and co-ops collapsing. The truth is that, for a variety of complex reasons, many insurers miscalculated the cost of Marketplace coverage. As a result, premiums are likely to increase more in 2017 than they have in recent years. The good news is that with health care cost growth expected to remain below historic averages, this is likely a one-time correction rather than the beginning of a trend. Furthermore, the financial assistance available to Marketplace enrollees adjusts automatically, so the vast majority of enrollees will be shielded from the increase. The bad news is that Marketplace premium rates will be made public right before the November election. Therefore, any significant increase will immediately be subject to intense political spinning, while the true picture will emerge more slowly.
Drug Prices – A Dragon Left Un-Fought
In his JAMA article, President Obama calls for increased transparency around drug development costs, higher rebates to Medicare and Medicaid, and giving Medicare the authority to directly negotiate with the drug industry over prices. However, as Ron Pollack points out in the Politico article, the reason neither these nor other measures to hold down the price of prescription drugs was included in the ACA, was that doing so would have sunk the bill. And all signs are that history is about to repeat itself with respect to the “cancer moonshot,” which will continue the pattern of allowing the drug corporations to reap unchecked profits off of public sector investments.
Politics of the ACA: Play It Again (and Again and Again)
Kaiser Family Foundation’s latest health tracking poll is out and it tells the same old story. People view the ACA through a partisan lens that is not really connected to what the law actually does. With Republican leaders and Republican voters continuously reinforcing each other in their animosity toward the ACA, it is little wonder that there have been more than 60 repeal votes in Congress aimed at all or parts of the law. And even though nearly all have failed (and been doomed to failure from the outset), it would not be correct to say they have had no effect. As President Obama notes, the incessant attacks have distracted from the difficult work of implementation and, in a few instances, have actually undermined the law’s operation. And while he may be correct that it is not obvious that the strategy of undying hostility to the ACA has paid political dividends for Republicans, Speaker Ryan and Majority Leader McConnell would probably disagree, seeing as their party was firmly in the minority when the ACA passed.
But the ACA has another problem winning over the public beyond partisanship. That is the problem of “if the dog that doesn’t bark in the night – no one notices.” For example, if Medicare spending rises more slowly than it would have absent the ACA, or if there are fewer medical errors than there would have otherwise been, how do you get people to notice? The counter-factual case is almost never persuasive.
On the other hand, it is easy to overstate the unpopularity of the ACA. Those holding an unfavorable opinion of the law include a significant number who want to see it go farther, rather than be repealed. And there is really little appetite among the public for taking people’s health care away from them or allowing insurance companies to go back to pre-existing condition exclusions.
The bottom line: there is little incentive for Republicans in Congress to declare a ceasefire on the ACA as long as Republican voters continue to oppose it. There is also little likelihood that voters will change their tune in the short run as long as their leaders continue to attack it. But, eventually, the public acrimony over the ACA will subside due to the experiences of an increasing number of people who benefit from the law.
Near the end of his JAMA piece, President Obama recounts the letter he received from someone who did not vote for him and opposed “Obamacare,” but changed his mind when he was able to obtain the coverage he needed as a result of the law. Take that story and multiply it millions of times over. That’s why despite its flaws and the challenges that lie ahead, the ACA is here to stay.