“ObamaCare” – actually two complex pieces of legislation, the Patient Protection and Affordable Care Act and the Health Care and the Education Reconciliation Act of 2010 – started life as an unloved orphan. The right hated it passionately and comprehensively, and still does. Progressive Democrats, who’d been working for something like it for a century, were disappointed that it came out a patchwork of baby steps, not a full-fledged reinvention of American health care.
Last month’s policy conference of the National Academy of Social Insurance (NASI) in Washington brought together a group of health care reformers, some of whom have been in the game for a long time. If their comments are anything to go on, progressive Democrats are finally learning to love ObamaCare. If they go so far as to stand up for it in the 2012 elections, the new health care regime may even help them to turn what looks like a congressional salvage operation into a partial victory.
Three things need to stay firmly in mind. First, ObamaCare is not a government takeover of health care. It’s not even social insurance, strictly speaking, in that it doesn’t create a single universal program. It’s only “universal” to the extent that it requires everyone to buy private insurance. Even if you can’t afford it and you get care instead through expanded Medicaid, you’ll be getting it from private sources.
Second, the real effects of ObamaCare won’t be felt for some years. The processes it sets in motion to control health spending and test out and approve new forms of patient-centered care – changes that could revolutionize health care in the U.S. – need time to play out.
Third, there are a lot of things that people like about ObamaCare – such as the “Slacker Law” that allows families to keep grown children on their policies until age 26, the no-rejection-for-preexisting-conditions rule, and the rule requiring insurers to cover recommended screenings and preventive care without adding on copays or deductibles.
“I believe the ACA is going to be less and less vulnerable as time passes,” Donald Berwick, former administrator of the Centers for Medicare and Medicaid Programs, told the audience at the NASI conference. “Do you really want to go back to denying people coverage for preexisting conditions? Do you really want to tell small employers they’re on their own? These are not defendable goals anymore.”
Simply repealing the part of ObamaCare that conservatives like the least – the requirement that everyone purchase health insurance – is no way out, noted Alan Weil, executive director of the National Academy for State Health Policy. “Just saying you want to retain the coverage for preexisting conditions gets you back into a lot of the things that conservatives are challenging.”
Another reason to believe that ObamaCare has launched the U.S. on a new path is the rapidly rising cost of the old way, pointed out John Rother, president and CEO of the National Coalition on Health Care. Providers are consolidating, giving them ever more clout over pricing. Poorer, at-risk populations are increasingly marginalized by the current system, added Brian Smedley, VP and director of the Health Policy Institute of the Joint Center for Political and Economic Studies. Lost wages from health care neglect and misalignment comes to some $1.24 trillion, he noted.
It’s becoming more obvious, too, that while ObamaCare may not be an ideal structure, the right has no alternative to offer. “As of today, there’s no conservative model of universal coverage that compare with the ‘liberal’ one,” Weil said. “What is a ‘market-based solution’ if a lot of people can’t afford private coverage? I don’t know what range of options is acceptable to conservative people that includes universal coverage.”
Some on the right nevertheless defend a market-based approach by arguing that if everyone has “skin in the game,” chances are that competitive pressures will start to push prices down. Berwick disagrees. “It doesn’t work,” he said. “There’s no scientific evidence that it does. Patients don’t use health care as a recreational good. Poor people will give up care” without a truly universal system. The old system was trending in a direction that “would shift costs hugely to the individual, in a way that outstrips their capacity to pay.” The results would be “blunt and erratic,” he warned.
ObamaCare faces challenges in the Supreme Court and the outcome of the November election, which could swing power into the hands of people pledged to dismantle it. What are the odds it will still exist a year from now? Again, the better question might be, what’s the alternative? “If Romney gets rid of ObamaCare, he would have to replace it with something,” said Gretchen Young, SVP of health policy at the ERISA Industry Committee.
A Supreme Court decision could come as early as June, but Young suggested it might not be conclusive. The justices might put it off until June 2015, when the tax impact of the new laws would be clearer. But even if they overturn the universal mandate, the efforts that have been made so far at the federal and state levels won’t end, predicted Joel Ario, managing director at Manatt Health Solutions. Instead, we’re likely to see a rebalancing of state-federal responsibilities, including more innovation waivers for some states and new partnership options.
The election is likely to yield an even more ambiguous outcome. If Obama is reelected, “he’ll continue the process,” Berwick predicted. But what will that mean in substance? “The least likely results are full repeal and no changes at all,” said Ario. “Neither party is strong enough to have its way.”
Much will depend on the degree of progress during the balance of this year – by federal regulators in finalizing and publishing rules, and by the states in getting health insurance exchanges off the ground. “There are two conspiracies,” said Weil. “One is by [ObamaCare's] supporters, pretending all is going well. Its opponents are pretending that the states aren’t implementing the law. In reality, there’s a tremendous amount of work going on, below the radar screen, that they can’t talk about. But there’s a lot of progress.”
Ario noted that six of the 10 states that the White House has cited as having made the most progress in implementing state-level health exchanges are red states. “What happens if the law is overturned? The exchanges won’t be gotten rid of.” Progress is piecemeal, however, and no one one should expect a perfectly integrated system for choosing a health care provider to be in place by 2014, when the new structure is supposed to be complete, Weil warned.
That’s a problem for large businesses, said Young, which would prefer something close to a national standard, rather than 50 separate and quite different regimes, since this would add to their reporting and disclosure headaches. The good news, Ario said, is that the Department of Health and Human Services is on target to finalize its ObamaCare regulations on schedule.
Other good news, said Robert Berenson, a fellow in health care policy at the Urban Institute, is that the Center for Medicare and Medicaid Innovation – perhaps the greatest hope that Washington can devise a better, more efficient and cost-effective structure for health care delivery – is moving rapidly to develop demonstration projects and models. Berwick notes that the center has a great deal of power to implement programs, even to relax provisions of the Social Security Act and other laws to facilitate projects it deems worth testing. That suggests the benefits of some of the better projects could surface sooner rather than later.
Which underscores a larger aspect of ObamaCare – that it’s a process, even an extemporization, rather than a closed and finalized system. Much like the New Deal in the 1930s, in fact. ObamaCare’s biggest failure to date, the CLASS long-term care insurance program, which HHS called a halt to recently, wasn’t a misstep in this respect, Berwick argued. “It put a bogey on a very big, long-term problem,” he said. “It didn’t fail any more than a child falling off a bicycle fails.”
In fact, the biggest challenge of the whole undertaking, the NASI participants suggested, will probably not be the current struggle over the scope of coverage and the extent to which government dictates policy to the private sector. Instead, the challenge will be implementation.
We need to focus more on delivery and provider capacity,” said Weil. “Federal money going to the states is heavily balanced on the coverage side, for the exchanges. But in terms of helping them with system improvement, there’s not a lot of resources.”
Berwick pointed to three things that need to be achieved to move the new system “further along the curve” to success: 1) consolidate payment processes, so that a global payment capitation is in place; 2) cost transparency between providers; and 3) an intelligent approach to eliminating waste, such that “we don’t subject people to care that doesn’t work.”
Why is implementation so important? “We have to convince the public that health care is their right,” Berwick said, “and that we’ll be a trustworthy partner in getting it.” That won’t be possible unless the public finds the new system to be understandable, affordable, easy to use, and efficient.
And if it fails? It’s hard to predict, but oddly enough, the casualties two to three years in the future might not be the building blocks of ObamaCare, as conservatives tend to think, but insurers and other private providers. What the new structure attempts to do, Berwick pointed out, is to integrate the private health care system into a much more exacting value chain, upending the system that, thus far, has put them in the drivers’ seat.
When ObamaCare passed in 2010, the Wall Street Journal wasn’t far off in arguing that “WellPoint, Aetna and the rest are from now on going to be public utilities, essentially creatures of Congress and the Health and Human Services Department.”
When prices rise and choice suffers, the fault will live with ObamaCare,” the Journal predicted. But if the public comes to value the improvements that ObamaCare offers them – and perhaps they already have – then failure may not be the government’s but the providers. In which case, efforts such as Vermont’s to create single-payer alternatives, may get a boost. Far from killing private health care, ObamaCare may be its last chance.