Health Policy

The Future of the Affordable Care Act: Unscathed by Attacks from the Right, Overtaken on its Left?

By ETIENNE DEFFARGES Etienne_Deffarges

Having survived years of attacks from Republicans at the federal level, will the surviving ACA be rendered obsolete by Democrats’ local and state efforts towards universal health care? This could be an ironic twist of fate for Obamacare. Conceived out of the conservative Heritage Foundation’s ideas and an early experiment in Massachusetts under a Republican governor, President Obama’s signature legislative achievement could very well survive its most recent judiciary challenge. But over time the ACA is susceptible to obsolescence, because of the many universal health care solutions being pushed at the state level.

Let’s start this brief outlook for Obamacare by reviewing how it has played defense, quite successfully thus far: During most of 2017 and 2018, the future of the ACA was always discussed in the context of Republican efforts to repeal it. After all, the GOP controlled the White House and both Chambers of Congress. Hadn’t Republicans spent the last four years of the Obama administration promising to repeal Obamacare the instant they could? And so they went after the ACA in 2017 with all the levers of Washington power. But repealing is one thing, legislating another: We know what happened in July 2017, when the last “repeal and replace” effort was defeated in the U.S. Senate by the narrowest of margins, because three Republican Senators, Susan Collins, Lisa Murkowski, and the late and much regretted John McCain, voted against the repeal. With their December 22 tax law, Republicans did succeed in eliminating the ACA’s individual mandate tax penalty owed by individuals failing to maintain “minimum essential coverage.” Most medical plans qualify for this, as long as they meet a number of requirements, such as not charging more for pre-existing conditions. For good measure, the Trump administration used executive orders in 2018 to allow low-cost plans not meeting these ACA guidelines to be offered by employers. Twenty state attorney generals from Republican states, led by Texas and Wisconsin, also initiated litigation against the ACA, arguing that without the tax penalty the law had become unconstitutional.

On November 6, after having campaigned heavily on health care and the protection of pre-existing conditions, Democrats won control of the House of Representatives, making further legislative challenges to the ACA very unlikely. The Midterm elections also saw three newly elected Democratic governors in Kansas, Maine and Wisconsin promising to bring to their constituents a key provision of the ACA, Medicaid expansion. The citizens of Idaho, Nebraska and Utah will also get Medicaid expansion, following the success of local ballot initiatives. In total, around 800,000 people are poised to gain access to Medicaid for the first time in these six states: Obamacare is on the march! Not so fast. On December 14, 2018, U.S. District Judge Reed O’Connor ruled for the twenty Republican states and against the ACA, arguing that once Congress repealed the tax penalty that enforced the individual mandate, the whole legislation became invalid—everything within the ACA, protections for pre-existing conditions, children under 26 insured within their parents’ plans, Medicaid expansion, etc. A lot of voices, not all of them from Democrats, criticized the ruling as stretching a legal principle called “inseverability” far beyond reasonable boundaries—how could for example the ACA Medicaid expansions be bundled with the individual mandate tax penalty? Legal scholars argued that Judge O’ Connor’s ruling ignored settled law, i.e. that Congress had refused to repeal the entire ACA in the summer of 2017, striking down only a portion of the legislation under the December tax law, and leaving the rest of the ACA standing. This ruling is being appealed by sixteen other states supporting Obamacare, joined in January 2019 by the newly installed Democratic House. After the appeal, will the U.S. Supreme Court have to rule (for the third time) on the constitutionality of the ACA? If this becomes the case, one has to remember that the Court affirmed twice the constitutionality of the ACA, in 2012 and 2015, with Chief Justice John Roberts voting with the majority on both occasions.

Despite this judicial development and the Trump administration slashing advertising and promotional budgets for ACA enrollments, the law remains very popular: After its six annual enrollment season, the ACA federal insurance marketplace proved again to be very resilient, with the number of Americans signing up for 2019 ACA health plans down only 4% relative to the prior year. Not surprisingly, Americans are interested in good health care coverage at affordable prices.

But what if good and affordable health care coverage came from sources other than the ACA? The Democrats’ success in campaigning on health care for the recent midterms did not go unnoticed, and 2019 opened up with a flurry of new local and state universal health care proposals. If successful, these initiatives would represent a new front, on the left of the political arena, in the health care battles unleashed by Obamacare. Mayor Bill De Blasio has just mandated universal health care for all New Yorkers, even undocumented ones, bringing coverage for the first time to about 600,000 people. Newly elected Governor Gavin Newsom promised in his inaugural speech to enact full access to health care for all Californians. His first $209 billion budget blueprint, of which health care accounted for close to 30%, included a state health insurance mandate (to restore the repealed federal ACA mandate); increased insurance subsidies for Californians under the ACA (bringing them to individuals making between 400 and 600 percent of the federal poverty level); and access to Medical for undocumented immigrants up to 26 years of age. (One of Newsom’s first executive orders was to direct Medical to negotiate directly with pharmaceutical companies to demand lower priced drugs for its 13.5 million enrollees.) Not to be outdone, Washington State Governor Jay Inslee proposed a public option for those who do not qualify for Medicaid but cannot afford health coverage from private markets in his state. Similar efforts to help uninsured people who earn too much to qualify for local Medicaid plans are underway in half a dozen states, Colorado; Connecticut; Illinois; Minnesota; Nevada; and New Mexico.
Many states will not wait for the end of paralysis in Washington DC, and policies pioneered in the states often lead to fundamental changes at the national level. As mentioned above, the comprehensive Massachusetts health care legislation signed by Republican Governor Mitt Romney in 2006 became the blueprint for Obamacare. Similarly, the ACA employer’s mandate, enrolling private businesses to increase access to health care, has its roots in long-enacted legislations in Hawaii and San Francisco. This means that during the two years leading to the 2020 presidential elections, there could be many state and local health care initiatives granting health care to millions of people, people who no longer would have to look for insurance in a ACA health exchange. Enrollment in these exchanges could then plummet. Medicaid expansions are likely to be the longest lasting component of the ACA…until some form of federal universal health care legislation (in 2021? 2025?) replaces the landmark legislation.

Author of “Untangling the USA: the Cost of Complexity, and What Can Be Done About It,” Etienne Deffarges has counseled, created, and invested in countless organizations during his professional life as a management consultant, business executive, and entrepreneur.

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PeterAllanSteve2pjnelsonWilliam Palmer MD Recent comment authors
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William Palmer MD
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William Palmer MD

We have to have prices because they tell us what to produce and how much. This is the canonical defect in socialism. But we can’t have prices because the elasticity of demand is too low (at least for non-ambulatory care.) And people can’t really shop with cash. No group of bureaucrats can manage an economy because they cannot assimilate and manage the millions of bits of information. Prices are the summation and tallies of these millions of little votes at the time of buying or selling. And they automatically tell us in real time what to produce and what to… Read more »

pjnelson
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pjnelson

Unfortunately, real-time access to actual prices is limited by the proprietary character of the agreements between payers and providers.

Johann Odermann
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Johann Odermann

Regarding the reversal of the previous administrations policy limiting short term plans and eliminating guaranteed renewals in the short term plans, Cato’s Michael Cannon has already addressed this issue quite well: MAY 29, 2018 1:38PM HHS Can and Should Allow Short-Term Plans to Protect the Sick from Medical Underwriting By MICHAEL F. CANNON If you aren’t paying attention to the debate over short-term health insurance plans, you should. It’s a mixed-up, muddled-up, shook-up world where Republicans are pushing to expand consumer protections, Democrats are fighting to block them, and the public debate has it exactly backward. In this morning’s Wall… Read more »

Steve2
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Steve2

“ObamaCare premiums keep skyrocketing. Rate hikes as high as 91% will hit many consumers just before Election Day. Maryland insurance commissioner Al Redmer warns ObamaCare is in “a death spiral.” So-called short-term health plans, exempt from ObamaCare’s extensive regulations, are providing relief. Such plans often cost 70% less, offer a broader choice of providers, and free consumers to enroll anytime and purchase only the coverage they need.” First paragraph is pretty much not true. Yup, you can find an individual occurrence of a large increase, but it Obamacare as a whole was going up 91% per year as you guys… Read more »

Johann Odermann
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Johann Odermann

It’s a CATO piece but what I will say in defense of it is the author writes “as high as 91%” NOT “up 91%” as you state. The author is accurate from what I know based on hearing from a few friends who have told me their premiums have close to doubled and based on my periodic review of premiums. I’m not sure how “often they really cost 70% less” but short-term health plans are priced less in premiums. The answer to your question about why other insurance companies haven’t priced similarly is largely, though not exclusively, two fold –… Read more »

Allan
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Allan

“Yet in 2016, the Obama administration did exactly the opposite. It issued a regulation that exposed enrollees in short-term plans to medical underwriting after they got sick:” A lot of people like to forget how Obamacare screwed up healthcare and made it worse. It made the sickest working families that had high borderline incomes the ones to pay the most financially and health-wise. “Democrats want to prevent short-term plans from offering these consumer protections because they fear consumers will find short-term plans more attractive than ObamaCare.” It seems that many on the left who wish to prevent “short-term plans from… Read more »

Peter
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Peter

“So-called short-term health plans, exempt from ObamaCare’s extensive regulations, are providing relief. Such plans often cost 70% less, offer a broader choice of providers, and free consumers to enroll anytime and purchase only the coverage they need.”

Nothing in health care comes free. Have you checked the deductible/coinsurance/coverage limits in these plans. And please explain how these plans will protect low wage workers – the group needing the ACA?

Johann Odermann
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Johann Odermann

Rather fitting if “ACA were overtaken on its Left” as maritime rules dictate that when approaching head on that, in order to avoid collision – passing to Port is SOP.

Johann Odermann
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Johann Odermann

To bastardize Mark Twain – I’m sorry for the short note, I don’t have time to write a long one: To equate “Romney-Care” with conservative thought / Republicans with “Obamacare” is a specious argument at best, malicious and malignant at worst. Medicaid coverage hasn’t been shown to increase population health – in fact quite the opposite. Touting expansion of Medicaid as a success of the ACA (through redefining what it means to be poor and expanding subsidies to those newly qualified indigents) betrays more of a concern for expanding dependence on government largess and less of a concern for cost-effectively… Read more »

Steve2
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Steve2

“Medicaid coverage hasn’t been shown to increase population health – in fact quite the opposite.” Incorrect. “betrays more of a concern for expanding dependence on government largess and less of a concern for cost-effectively impact public health and cost-effective healthcare delivery.” You might want to try a politics blog rather than a health care blog. If your ideas are unable to stand upon their own merits, or the only way you can deal with what others propose is to write that kind of BS, then you are in the wrong place and the wrong field. This is on par with… Read more »

Johann Odermann
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Johann Odermann

Thus my point about Twain.

When I have the time I will post proof for you citing medicare coverage not increasing population health.

Regarding politics – no thank you. I was responding in kind to the original post which brought political accusations and reference into the discussion of healthcare policy. Healthcare and healthcare insurance SHOULD be apolitical but some have sought to make it political.

Peter
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Peter

“When I have the time I will post proof for you citing medicare coverage not increasing population health.”

“Medicaid coverage hasn’t been shown to increase population health – in fact quite the opposite.”

If find those opposing Medicare/Medicaid/ACA already have great subsidized health coverage through their employer.

Saying the above coverage “does not improve population health” is a fallacious argument. What health coverage does change population health? First you’d have to define population health, then you’d have to describe how private plans do change population health, as population health involves population health culture.

Would you give up your health coverage to get healthier?

Johann Odermann
Guest
Johann Odermann

The comment about population health relates directly to Medicaid and Medicaid expansion (relaxing the requirements to qualify for Medicaid) is the predominant way in which PPACA expands healthcare coverage.

To ask the question if I or anyone who has private insurance would give it up to get healthier misses the entire point of the analysis and the study cited.

Peter
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Peter

You’re still going to have to explain “population health”. Do you mean Medicaid expansion allowed more unhealthy people to get coverage – or do you mean that Medicaid does not improve heath only maintains existing bad health populations?

Johann Odermann
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Johann Odermann

https://www.nationalreview.com/critical-condition/uva-study-surgical-patients-medicaid-are-13-more-likely-die-those-without/

The largest outcomes study to date looking at survival of patients with private insurance vs. Medicaid vs. uninsured showed that surgical patients on Medicaid were 935 more likely to die before leaving hospital than those with private insurance. Uninsureds were 74% more likely to die than privately insureds. So . . . in other words . . . Medicaid patients did not fair better than those who lacked insurance – they fared worse (Medicaid benefits did NOT improve their health – denominated by the ultimate measure – life v death).

pjnelson
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pjnelson

I am reminded that recent statistics indicate a decline in the percentage of our nation’s citizens with formal insurance enrollment. Correspondingly, there is an increase in health spending that is higher than economic growth. Even though there were probably a few months last year that heath spending growth was less than economic growth, this is unlikely to occur again. The best cumulative analysis can be found at the ALTARUM CENTER FOR VALUE IN HEALTH CARE. https://altarum.org/sites/default/files/uploaded-publication-files/SHSS-Spending-Brief_January_2019.pdf See page 4 of the report. Its grim. Meanwhile, our nation has no strategy to offer healthcare that is justly efficient and reliably effective… Read more »

William Palmer MD
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William Palmer MD

Are you hoping for a federal plan? Wouldn’t we have a more evidence-based ultimate plan if we allowed the states to experiment?

Steve2
Guest
Steve2

This has been one of the more disappointing parts about health care reform. Since states are spending so much on health care you would think they would take a shot at it. Why hasn’t any state ever committed itself to the idea of market based health care if its leaders believe that is the best way to control costs and make it available to everyone? And please don’t use Obamacare as an excuse. They could have done that well before Obamacare existed.

Steve

Johann Odermann
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Johann Odermann

See one of my answers above – same here. The reason (if there is ONE reason) states haven’t explored more market based solutions is REGULATION (though keep in mind that when it comes to Medicaid many HAVE moved to a more market based approach – after all that’s what the movement from FFS to Managed Medicaid is all about). State spending on healthcare tracks with Medicaid – so expanding the definition of Medicaid eligible, ceteris paribus, will result in increased costs (keeping in mind that Medicaid is a joint State-Federal initiative). FFS and Managed Medicaid plans have some of the… Read more »

Johann Odermann
Guest
Johann Odermann

Mentioning it doesn’t make it true. Pinning PPACA on the Heritage Foundation may be convenient, but inconveniently for those who do, it’s also inaccurate: “Is the individual mandate at the heart of “ObamaCare” a conservative idea? Is it constitutional? And was it invented at The Heritage Foundation? In a word, no. The U.S. Supreme Court will put the middle issue to rest. The answers to the first and last can come from me. After all, I headed Heritage’s health work for 30 years. And make no mistake: Heritage and I actively oppose the individual mandate, including in an amicus brief… Read more »

pjnelson
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pjnelson

No matter how we allocate the resources available for health care, we have no means to manage the worsening level of Unstable HEALTH that our nation’s healthcare is expected to manage with only down stream intervention. The upstream social factors driving our nation’s worsening HEALTH are not within the capabilities of our nation’s healthcare industry to manage on its own. In the absence of community sponsored investments in their own Social Capital needs, the standard means of resource allocation needs to improve the economic resources available for Primary Healthcare. Since Primary Healthcare tends to follow Parkinson’s Law rather than actuarial… Read more »

Johann Odermann
Guest
Johann Odermann

We increasingly have the wrong types of competition on the wrong types of care with the wrong types of payment schemes and measurement. We don’t have a “health”care system as much as we have a “sick”care system – true “healthcare” would be upstream in your example.

Better prevention, education, understanding of cost/benefit per intervention over the longitudinal continuum of disease could help.

pjnelson
Guest
pjnelson

Our healthcare industry has no capacity to alter the micro-neighborhood networks that sustain parental capabilities to prepare their children’s success within their Primary Education beginning in kindergarten. If you are uncertain about this assertion, even with the citation below, find a federally supported Comprehensive Health Center and arrange to observe their daily encounters for a week. You will find that they are overwhelmingly preoccupied with the down stream character of each person’s HEALTH that has been generationally caused by their community’s social cohesion deficits.

See Shin et al at https://doi:1.1001/jamanetworkopen.2018.6963

Peter
Guest
Peter

” Heritage and I actively oppose the individual mandate, including in an amicus brief filed in the 11th Circuit Court of Appeals to the Supreme Court.”

Because you wanted the ACA to fail – cause the govm’t was involved. There can be no successful Medicare for All concept without a mandate – like car insurance at the state level, like vaccinations at the school level.