Social Security as a model for the Affordable Care Act’s future

Picture 41 Check Back in a Generation to See if the Health Law Withstands Challenge” suggests the New York Times in an insightful piece that ran earlier this week, which suggests Social Security as a useful comparison. Social Security was enacted in 1935 but benefits didn‚Äôt start until 1941. During that long lag conservatives tried hard to get rid of Social Security and it took 10 years or so before it was firmly entrenched. Now of course conservatives love Social Security and other big entitlement programs they previously railed against, with Medicare being Exhibit A.

Democrats and Republicans realize the Patient Protection and Affordable Care Act (PPACA) is most vulnerable over the next few years before it is fully in effect, which is why Democrats designed it to have at least some elements kick in soon and why Republicans are mounting such a furious attack on it now.

It seems to me that history is likely to be on the side of the Democrats. Repeal isn’t going to happen with Obama in office, and if Republicans are somehow successful in having the Supreme Court declare the individual mandate unconstitutional and shave off some of the Act’s edges, what exactly are they going to do then? Health plans are going to scream bloody murder if they don’t get a bunch of healthy new customers –which the mandate is designed to deliver– and I can’t believe Republicans are going to bring back medical underwriting, i.e., exclusion from coverage based on pre-existing conditions.

If Republicans are successful in breaking the back of PPACA, they’ll have handed themselves a poisoned chalice. They have no viable alternative to PPACA, and a collapse is likely to lead to nationalized health care within a few years as employers find health insurance unaffordable and health care costs continue to bankrupt the country.

David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma, biotech, and medical devices. Formerly with BCG and LEK. MBA (Harvard), BA (Wesleyan)

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  1. From 1937 until 1940, Social Security paid benefits in the form of a single, lump-sum payment. The purpose of these one-time payments was to provide some “payback” to those people who contributed to the program but would not participate long enough to be vested for monthly benefits.
    Under the 1935 law, monthly benefits were to begin in 1942, with the period 1937-1942 used both to build up the Trust Funds and to provide a minimum period for participation in order to qualify for monthly benefits.