Thursday, June 12, 2014
The JAMA Forum
June 11, 2014
The Moral Case for Affordable Coverage and How Obamacare Fails To Live
Up to It
By Austin Frakt, PhD
Some health policy commentators have claimed that President Obama and
Affordable Care Act (ACA) supporters have not made a convincing moral
case for coverage expansion. Scholars suggest that support for the law
could turn, in part, on the moral argument for it. What is that
argument, and is implementation of the law consistent with it?
We can make some headway by turning to Norman Daniels, PhD; Brendan
Saloner, PhD; and Adriane Gelpi, who articulate one possible moral case
for universal coverage. Their key assumption is that there is a "social
obligation to protect opportunity."
From this, a lot follows. One's opportunity is threatened by poor
health. In sickness, one cannot learn or earn as efficiently, let alone
enjoy the same length or quality of life. Therefore, protecting
opportunity implies protection of access to health care services that
promote and preserve health. And, it's hard to argue with the notion
that such access should be protected equally.
Access to health care is enhanced by health insurance. As Daniels,
Saloner, and Gelpi argue, universal health insurance is a means to this
end. But it's not the only way. The key is to recognize that equality of
access is not equality of receipt. The authors are not suggesting that
we have a moral obligation to ensure that everyone receive the same
amount of health care, merely that everyone have the same degree of
access to it.
This more modest obligation would be met in a system that does not cover
everyone but extends equal opportunity of access to affordable coverage
to everyone. That is, equal opportunity to obtain coverage is a
necessary condition for equal access to health care, though some may
choose not to avail themselves of that care or that coverage. Put
another way, if we are morally satisfied with a regime under which
people can choose whether to receive care, we ought to be morally
satisfied with one under which people can choose whether to obtain
coverage for it, so long as there is equal opportunity of access to that
coverage and the care it facilitates.
The distinction is crucial because the ACA was not designed for
universal coverage, and it will not achieve it. However, it was passed
with the more modest ambition to provide universal access to affordable
coverage, the very thing we're morally obligated to provide.
But, when you go beyond the law's ambition and consider its actual
implementation, there are some problems. It has failed to provide
universal access to affordable coverage in at least 2 ways. First, the
Supreme Court ruled to permit states to opt out of Medicaid expansion
without penalty. Though gradually, more states are expanding their
programs, many states still have not. In those states, millions of poor
residents lack access to affordable coverage. No matter what institution
one wishes to blame, this is a moral failing.
Second, for some consumers, the products offered in the new exchanges
are unaffordable, even with subsidies. This is a serious ethical
concern, as addressed by Saloner and Daniels.
"[T]he exchanges leave families vulnerable to burdensome out-of-pocket
spending for treating health conditions that are costly but not
necessarily catastrophic. For example, 25 percent of individuals in the
United States have a major chronic condition such as a mood disorder,
diabetes, heart disease, asthma, or hypertension. The annual cost of
treating such conditions, including visits with specialists and payments
for medications, can exceed several thousands of dollars, even with
health insurance (Soni 2009). Under the ACA, a family of four with an
income around 275 percent of the [federal poverty level] ($64 000 in
2010) would be responsible for premium costs of around $5600 and would
not experience relief from cost sharing until it had reached half the
family cap, around $6000 in 2010 (KFF 2010b)."
Jed Graham of Investor's Business Daily recently reported that such
affordability concerns have become reality. He documents that some
families covered by exchange plans could face out-of-pocket costs as
high as 40%. By any reasonable definition of affordable, this is not.
This is another moral failing.
So, what can be done to bring policy into better alignment with
morality? First, all states could expand Medicaid. Second, Saloner and
Daniels suggest that subsidies could be increased for families with
higher health care burdens, such as chronic conditions. Third, tax
credits, (which now kick in when premiums are higher than a specified
percentage of income) could take into account other out-of-pocket costs.
Saloner and Daniels offer a final suggestion:
"[E]xchanges could be redesigned to protect specific types of
investments by providing income disregards for money that low-income
families set aside for paying children's college tuition, opening a
small business, or saving for retirement. An added benefit is that such
a proposal would encourage families to increase their assets and to
build financial stability."
All of these approaches would make coverage expansion more expensive,
unless they could be offset by policies that would make health system
delivery or health insurance more efficient.
Perhaps the moral argument for the ACA was not made fully or loudly in
years past. That's a failing we can now easily remedy. I've just done my
part. But, having done so, it's now clear that as designed and
implemented, the law is not consistent with what that moral reasoning
demands. That too can be remedied, but it will require some changes,
potentially at some cost. Do we have the moral fiber to make them?
Comment by Don McCanne
Austin Frakt is a highly credible health economist with great values,
and a person for whom I have profound respect. But sometimes he thinks
too much. He is certainly correct when he states that the design and
implementation of the Affordable Care Act (ACA) is not consistent with
"what moral reasoning demands." Where he falls short is in his
endorsement of flawed recommendations for improvement.
In conceding that ACA was not designed for universal coverage and will
not achieve it, he implies that this is acceptable since our only moral
obligation is to provide universal access to affordable coverage. The
problem is that no matter how much you modify our existing fragmented,
multi-payer system, you can never achieve truly universal access to
affordable coverage, much less to affordable health care.
Let's look at his suggestions. He says that all states could expand
Medicaid. Sure, but they aren't, and the Supreme Court ruled that we
can't make them do it. He says that we could increase subsidies for
families with greater health care burdens. Sure, but imagine the
administrative complexity assigning a health-care-needs status to each
individual and then continually adjusting that status as needs change
with time. He says that premium tax credits could take into
consideration other out-of-pocket costs. Sure, but which would be
allowable and how much documentation would be required? He says that
exchanges could be redesigned to protect certain investments such as the
children's college education fund, the expenses of starting a small
business, or saving for retirement. Sure, but talk about an
administrative nightmare, and the error rate would likely be very great.
He says that these approaches would make coverage expansion more
expensive. Sure. Much of the increased cost would be in the waste
inherent in adding more administrative complexity to a system that is
already uniquely heavily burdened with expensive administrative
excesses. He says that these extra costs could be offset by increasing
efficiency in health system delivery, but that has proven to be an
elusive goal with little gain to date. Besides, wouldn't we want the
gains from increased efficiency to be used to improve health care
delivery rather than to add to the administrative waste we already have?
The proper moral argument is to make actual health care - not health
care coverage - accessible and affordable for absolutely everyone. This
is what a single payer system would do. Tweaking our highly flawed
financing system so that more people have access to an insurance card
falls far short of the moral obligation that we have to each other.
Austin Frakt knows this. He should give up on trying to think up ways to
skirt single payer.
at 4:38 PM