By Rebecca Pizzitola, University at Albany School of Public Health
In the United States, we’ve been talking a lot about the Affordable Care Act (ACA), or “Obamacare”. We have heard President Obama and health policy experts claim that it will be a safety net not only for the poor but also for the middle class by expanding coverage to those who have previously been unable to get health insurance for a variety of reasons. Some did not qualify for coverage through their employers and found the individual insurance market too costly without their employer subsidizing the premium and too confusing to understand without assistance. Others may have been unable to afford coverage from any source because they were low income but were earning just above the income limits for public options like Medicaid or the State Children’s Health Insurance Program (SCHIP). For example, before the ACA, a low income male would only qualify for Medicaid if 1) he had income under a specific level and 2) he met a “categorical” requirement, such as having children or being elderly or disabled.
Others were priced out of the ability to buy health insurance coverage or were denied coverage altogether because of pre-existing conditions that made them expensive and risky for insurers to cover, bringing the catch-22 phenomenon to full life for those who needed medical care the most. Those lucky enough to have coverage despite preexisting conditions sometimes hit insurer spending limits. That is, after several years of battling expensive conditions like cancer or kidney failure, they had reached their insurer’s “lifetime maximum” and were now faced not only with their mortality but a loss of coverage.
Many more who thought “any” coverage was better than none paid small premiums each month for “barebones” plans, which have high deductibles (the amount the beneficiary must pay out of pocket before the insurer pays) and rarely pay for routine or preventive care. Barebones plans are known more formally as catastrophic coverage, i.e., coverage that typically only pays out for medical care needed after you’ve paid your deductible—i.e., in the worst-case scenario.
The ACA aimed to remove these barriers to coverage by making pre-existing exclusions and lifetime maximums illegal, by easing up on the requirements of Medicaid (notably by dropping categorical requirements and expanding coverage to those up to 133% of the Federal Poverty Level), and by offering more affordable coverage options (with income-based subsidies) through the federal and state-based “health insurance marketplace.” Further, the marketplace provides a way for people to compare plans more easily and ensure plans meet a certain minimum standard by covering essential health benefits (i.e., no barebones plans).
Among several hundred pages of other benefits detailed in the law, youth can now remain on their parents’ coverage through the age of 26. This change helps insure the many “young invincibles” who otherwise may have avoided getting coverage because it seemed like a bill they could forego given their current good health—even though they ran the risk of getting injured or developing a chronic disease that could delay or exclude them from coverage when and if they decided to apply for it in the future.
One of the greatest pieces of policy debate was the fact that the ACA now requires everyone to have coverage—the so-called individual mandate. Like with any rule, appeasing the masses involved creating a series of exemptions to the mandate based on things like religion, financial hardship and incarceration. But, for the most part, everyone has to get covered or pay a fine through their annual tax return if they do not acquire coverage. The idea behind this was that the health care system is a massive and increasingly expensive beast that has taken care of everyone including the un- and underinsured, and it’s about time everyone pay in and have decent coverage so the insured aren’t footing the bill every time the uninsured end up in the emergency room. This also helps make coverage more affordable for those previously priced out of or excluded from the market by giving insurers more money to play with.
This doesn’t mean insurers are now going to be rolling in the dough. Instead, insurers are under greater pressure to keep administrative costs to a minimum and spend more of their money on care—including a stronger push for prevention (which, if properly executed, is cheaper than treating a disease that sets in). This includes making certain preventive services completely free and deciding which treatments work and therefore should be covered and which treatments don’t work and should be excluded from plan benefits based on comparative effectiveness research. This is “evidence-based medicine.”
The ACA has several more provisions, but the main point is that President Obama wanted to cover more of the uninsured, just like President Lyndon Johnson did when first instituting Medicaid and Medicare under the Social Security Act in 1965, just like Former Massachusetts Governor Mitt Romney did for his state in 2006, just like Former Governor Arnold Schwarzenegger tried to do for California following the example of Governor Romney and other states’ reform efforts (e.g., Vermont, Illinois, Oregon, New York), and just like Senator John McCain was proposing to do during the presidential race against President Obama in 2008.
At this point in time, the ACA is far removed from its original intent, having been diluted by several amendments and compromises. For example, President Obama promised significant cost savings, yet much of those cost savings were lost when the public plan option was dropped, which would have given the government powerful leverage over insurers to negotiate competitive pricing due to economies of scale. Further, although the ACA has been implemented piece-by-piece since 2010 according to a specific timeline with relative success, this year the individual mandate became effective and Republicans stood behind a promise to pass a federal budget in time to avoid a government shutdown only in return for the defunding of Obamacare; the government shutdown and the individual mandate went into effect.
Despite the individual mandate, enrollment across the nation started much slower than predicted, partly as a result of technology issues with the enrollment website at the federal level of government: healthcare.gov. (Meanwhile, the 14 states that opted to run their own exchanges and websites and have marketed against consumer confusion seem to have had fewer issues, including California, which represents about a 25% of total enrollment figures nationwide.) Although glitches are still being worked out, enrollment is now in line with projections. The biggest remaining concern seems to be whether or not more young invincibles will enroll or instead opt out of coverage and pay the fine for not carrying insurance. Without them paying in, premiums for the rest of the health insurance pool will go up, as the average cost per capita will be higher for a group that, in general, requires more care than younger cohorts.
Getting the ACA passed in the first place was, as Vice President Joe Biden said, “a big f*cking deal,” in line with such historic moments as the passage of Medicare and Medicaid, COBRA, HIPAA, and SCHIP and outshining President Bill Clinton’s failed attempt at health care reform in the early 1990s. Having overcome a seeming resistance to social solidarity in governance because of the United States’ emphasis on “equal opportunity rather than equality of outcomes,” as briefly discussed in a recent article in the Journal of Public Policy, is quite noteworthy. But, executing the law effectively is equally important. Otherwise, the opposition will surely continue to fight to repeal the law through 2016 (42 times and counting), or in failing to do so, take over in 2016 and try to repeal it then. Currently, there is still a lot of confusion about the law, and this confusion leads to fear of change, which tends to drive down support—and facilitate a repeal. In order to combat this, it’s high time to remember why we needed health reform in the first place. Repealing the ACA may get a few folks elected, but it does nothing to get more folks insured or reduce health care costs, which are increasingly crowding out other parts of our individual, family, business, and government budgets. As the platforms of all those presidential candidates who battled President Obama in the primaries remind us, the end game of reform is not a partisan issue—only the roadmap to get there. And if anything has improved under the ACA, repealing the law in favor of our previous status quo is counterproductive. Instead, we should focus on improving the law, even if it requires several amendments to make it more effective in the long run. As President Obama and health reform advocates have stated time and time again, in the words of Voltaire, “Don’t let the perfect be the enemy of the good.”