qotd: Is patching ACA the best approach for now?

Urban Institute
August 12, 2015
Next Steps for the Affordable Care Act
By Linda J. Blumberg, John Holahan

While the ACA has already had some very important successes, simply put,
there has never been enough funding, given how ambitious the goals of
the law were—for example, substantially reducing the number of
uninsured, ending discrimination against those with health conditions,
and controlling health care costs.

Every effort was made to keep the costs of the law under a trillion
dollars over 10 years, which amounted to about 0.7 percent of GDP. This
amount was simply not adequate, given the problems the nation faced in
the health care sector. In order to allow the ACA to meet and exceed its
long-term objectives, additional investments should be made to improve
affordable access to care and bolster administrative capacity.

Affordability concerns

Under the ACA, significant strides have been made in increasing the
affordability of coverage and reducing the number of uninsured by 15
million people. This was done in an environment with surprisingly
moderate premiums in the private nongroup insurance market and
prohibitions on discrimination against those with health problems.
However, despite these achievements, affordability remains the most
often stated reason for remaining uninsured.

* As it now stands, premium and cost-sharing subsidies are not generous
enough to make coverage affordable for large numbers of low-income
Americans.

* Low-income families are often unable to obtain subsidized coverage if
one worker in the family receives an offer of affordable single coverage
through an employer.

* Following the Supreme Court decision in 2012, which essentially left
Medicaid expansion up to individual states, 21 states still have not
expanded eligibility for that program. That leaves a significant gap
between those Medicaid eligible prior to the ACA and those eligible for
federal subsidies through the marketplaces.

Administrative concerns

In addition to these affordability issues, the significant reforms in
the ACA require serious attention to administration. Much of the need
for administrative effort is a consequence of building a system around
competing private insurers. This requires a complex and flexible IT
apparatus, continuing strategies and structures for broad-based
education, outreach and enrollment assistance, and effective approaches
for oversight and enforcement of insurance regulation.

* Experience with IT systems has been decidedly mixed, with some state
marketplaces working effectively, some moving to the federal
HealthCare.gov system, and some moving to well-functioning systems
developed for other states. But the most promising systems, including
HealthCare.gov, require more funding than they have thus far received.

* Education, outreach, and enrollment assistance needs are not
diminishing, although the current funding approach appears to treat it
that way.

* Regulatory oversight and enforcement resources have yet to be
allocated sufficiently.

Our solutions

All of these issues can only be addressed with additional funding, and
the amount that is needed is trivial as a share of the economy. We
propose the following:

* Make reductions in the premiums and cost-sharing (deductibles,
co-payments, coinsurance) that low-income people pay to purchase
coverage through the nongroup marketplaces.

* Make it possible for families to receive financial assistance for the
purchase of marketplace coverage even if a family member has an
affordable offer of single coverage through an employer.

* Make it an option for states to expand Medicaid to those at or below
only 100 percent of the federal poverty level to induce more states to
step forward.

* Make permanent a significant federal contribution to administrative
costs. This includes IT systems, but also the human support that is
needed, like call centers and a permanent cadre of personnel to help
individuals get enrolled both during open enrollment and during special
enrollment periods. Plus, make a federal investment in ensuring
appropriate oversight and enforcement of insurance regulations.

How much these solutions cost

We estimate that our proposed reforms could be done for about 0.2-0.24
percent of GDP. There are many ways to pay for this, including applying
rebates used in the Medicaid program to certain Medicare enrollees as
well, increasing cigarette and alcohol taxes, and replacing the
"Cadillac tax" with a cap on the exclusion of employer contributions to
health insurance.

The changes that we propose are not trivial. We recognize that they are
not politically feasible in the near term, but we also believe that what
is politically feasible at this moment will not do the job that is
necessary to make the ACA solve all the problems it is intended to address.

The ACA marks a large step forward for the US health care system, but no
country solves its health care problems with one piece of legislation.
There is more to do, and doing it is achievable with additional
investments that are extremely small relative to our economy and our
total level of health care spending.

http://www.urban.org/urban-wire/next-steps-aca

Full report (60 pages):
http://www.urban.org/research/publication/after-king-v-burwell-next-steps-affordable-care-act/view/full_report

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Comment by Don McCanne

This report is ideal for those who say that we should forget single
payer and instead move forward with fixing what we have - the Affordable
Care Act. The authors list some of the more obvious problems and provide
suggested solutions. Although their contribution to the reform dialogue
is commendable, there are two major problems with their approach.

The most important concern is that their recommendations are limited to
deficiencies in ACA, but ACA was merely a series of patches to our
highly dysfunctional, inequitable, inadequate, overpriced system
uniquely characterized by profound administrative inefficiencies. The
fundamentally flawed system would remain intact. Though the ACA patches
were beneficial, they did not begin to address the profusion of other
problems in our system.

The authors are merely proposing patches to the patches. We will still
be left with millions without insurance, millions who are underinsured,
profound administrative waste, and little means to control our high
health care costs. In fact, the authors recommend increasing our
spending on health care - additional spending that is appropriate only
if you accept the fact that we reject the comprehensive reform that we
really need.

The other problem is political. They acknowledge that their proposals
"are not politically feasible in the near term." But isn't that what
people say about single payer? Is single payer really that much less
feasible than patches to the patches? Look at the current political
campaigns. One of the most outspoken advocates of single payer Medicare
for all is filling stadiums with passionate supporters of his messages.
Yet other candidates who advocate for repeal of Obamacare and reducing
our spending on Medicare and Medicaid are drawing ridicule from those
outside of their narrow camp.

If we are going to work on changing political feasibility, wouldn't it
be far better to join the rising tide in support of replacing bad policy
with good policy through single payer, instead of merely trying to patch
the bad policies of our highly dysfunctional post-ACA non-system?