By 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.
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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” 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.
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?
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.
“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?
“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?
“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 offering these consumer protections” find that ideology trumps compassion and concern for those in need.
Unfortunately, real-time access to actual prices is limited by the proprietary character of the agreements between payers and providers.
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 most restrictive networks and PDLs around – so cost controls are tight. They receive a statutory best price on pharmaceuticals (branded). They under compensate providers – thus few providers are willing to see Medicaid patients based on reimbursement issues alone.
Regarding your earlier point about politicization – pot meet kettle. If you want to keep politics out of it then do so. The official title of the legislation is the Patient Protection and Affordable Care Act (PPACA) – commonly also known as the ACA.
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.
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 – regulations and choice. Regulations prevent it and the consumers demand choice which keeps premium prices varied.
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 consume.
So what can we do?
We have to try to achieve safe and altruistic shopping behavior using vouchers that are refundable. This is the only way to go. This way we can help the poor and subsidize their care and yet we still develope the best faux quasi-prices we can. It is the best we can do with a lot of poor choices.
Being refundable vouchers will be treated as money by providers.
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
“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 Grayson’s ” Republicans want you to die quickly if you get sick.” kind of nonsense.
Steve
“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 keep claiming, it would already take up the entire US budget. That compounding thing adds up.
As to that second paragraph, how often do they really cost 70% less? Sounds a bit like those “up to 90% off” sales. How often do they really offer a broader choice of providers and for what kind of care? (If it is possible to provide insurance coverage at 70% off and provide more coverage, as you are claiming here, why hasn’t some other insurance company already done that and made a fortune by eliminating all the other insurance companies?) How do people know ahead of time just what care they will need? What happens when they guess wrong and didn’t buy the coverage they really did need? How are those costs covered? How often does that happen?
Steve
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.
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 principles, a serious analysis of the Power Law distribution of healthcare resources should be used as a basis to improve Primary Healthcare economic support. Remember 50% of citizens incur 5% of our nation’s health spending and 20% of citizens use 70-80% .
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.
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 impact public health and cost-effective healthcare delivery.
The increase in healthcare insurance coverage in Massachusetts came as a result of increased numbers of privately insureds – not increases in Medicaid. The TYPE of insurance patients have matters as studies have shown that those with private insurance fair much better than those with Medicaid OR Medicare – uncompensated care and under-compensated care are two distinctly different things as denominated in Medicare and Medicaid reimbursement rates vs. private pay (though I know a few providers who don’t take insurance at all – their patients pay cash up front and then file their own claims).
One size doesn’t fit all – thus I completely agree with William Palmer, MD. Part of the reason why ACA as structured is such a mess is that it’s universal. What may work in a healthcare marketplace like Minnesota, won’t necessarily work in a marketplace like Mississippi – different demographics, race, socio-econommic stats etc.
Finally – I agree with pjnelson – University of Chicago / Milton Friedman (RIP) / Cato Institute. Turn them loose on a revamp and stop this piecemeal fiddling by the Feds. It’s the feds and price controls that are to blame for job-lock and employer sponsored insurance to begin with after all……..
Are you hoping for a federal plan? Wouldn’t we have a more evidence-based ultimate plan if we allowed the states to experiment?