Thursday, March 28, 2013

An Honest Assessment of Obamacare at Age 3

Saturday was the Affordable Care Act’s third birthday, but you might have missed it for all of the (lack of) attention it received.  Sure, there was the usual back and forth from the law’s supporters and opponents, but almost nothing that provided any new insights.

Supporters, such as the liberal New York Times editorial page, marked the ACA’s anniversary by touting the tens of millions already being helped by the law, from seniors on Medicare getting preventive services at no cost to them, to children with pre-existing conditions being able to get affordable coverage—the first steps on the road to expanding coverage next year to as many as 30 million uninsured persons (including 535,000 uninsured veterans according to a new study) while providing new benefits and consumer protections to everyone. 

Opponents such as the conservative Heritage foundation, marked ObamaCare’s anniversary by charging that it is causing higher premiums, putting more people out of work, leading to a loss of employer coverage, and making it more difficult for seniors to access Medicare-covered services.
Because the charges and counter charges were mostly a repeat of the same old tired talking points we have been hearing for three years, is it any wonder that much the public tuned the whole thing out?
Meanwhile, a new poll shows that the public remains ambivalent about the law and perhaps even more confused than ever.  According to the Kaiser Family Foundation’s well-respected health tracking poll, “a majority of Americans are unsure how the law will impact them, and few are paying attention to the details of state‐level decisions about implementation. Though opinion on the law overall remains nearly evenly divided, opponents’ attacks seem to have taken a toll on the public’s expectations, and Americans are now more likely to think the law will make things worse rather than better for their own families. While most of the law’s individual provisions remain popular, many of the most well‐liked elements are the least well‐known among the public. Public knowledge of the ACA’s provisions has not increased since 2010, and awareness of some key provisions has declined somewhat since the law’s passage when media attention was at its height.”

As Mick Jagger sang, “it’s enough to make a grown man cry!”

But let’s put aside the political talking points for a moment, and instead look at some hard truths about ObamaCare’s present and future:

1. The law already is helping many millions of people—that’s a fact, not a talking point.  For the most part, the people being helped so far are mostly those who already had health insurance coverage (no-cost preventive services for seniors, rebates if your insurance company spends too much on profit and administration rather than patient care, elimination of life-time limits on coverage) while helping relatively small pockets of people who in the past had trouble getting coverage (e.g. children and some adults with pre-existing conditions, and young adults).   The law also has increased Medicare and Medicaid payments to primary care physicians, provided scholarships and loan forgiveness for thousands of them and increased access to underserved communities through the National Health Services Corps.  The Kaiser Family Foundation has an excellent three-year anniversary summary of who has benefited so far and the progress being made in preparing for the next steps.  These gains are nothing to sneeze about, but they are just the opening acts to the huge changes that are supposed to take place in a little over nine months, when the ACA’s biggest coverage expansions and full gamut of health insurance regulations are scheduled to take place.  

2. The next act—expanding coverage to up to 30 million uninsured persons and mandating minimum levels of health insurance benefits and new consumer protections for everyone-- will be highly disruptive to the current system, and as a result some things will go right, some things will go wrong, some will pay more, some will pay less.  But why should this surprise anyone?

Did anyone really think we could transition from the current system, where tens of millions are uninsured, where many millions more have inadequate insurance and consumer protections from insurance practices that put them at risk of losing coverage, to one where almost all legal residents will have access to guaranteed, subsidized minimum benefits that can’t be taken away when you get sick, without it being highly disruptive? Changing the status quo is supposed to be disruptive.  

Did anyone think you can provide coverage to people who don’t have health insurance, especially those who are older and sicker, without some people (mainly the healthy young and wealthy of all ages)  paying more through higher taxes and premiums?  This is the way risk-sharing and pooling is supposed to work! 

(About those premium increases for some people, by the way: keep in mind that this isn’t a case of premiums going up for the same old insurance you had before, it is premiums going up for new and improved insurance offered on the individual insurance market.  An analogy: when the federal government required all new cars to have seat belts, air bags, and safer crash protection, these increased costs were passed on to consumers through higher prices, but most of us would agree it was worth it, because with these features, we are less likely to die or become hurt in car crash!  The same is true for health insurance: the insurance we will buy next year will have standardized benefits and consumer protections that will help ensure that we all have better access to health coverage with the benefits we need to help keep us alive and well, so of course we may have to pay a bit more for it. But also keep in mind that under the ACA,  the premium charged isn’t the same as what the insurance will actually cost you, because anyone with an income up to 400% of the federal poverty level--about $94,000 for a family of four--will be eligible for subsidies to help keep the cost down).

The social contract underlying all of this, of course, is that someday it will be me, someday it will be you, who will become older and sicker, and we all benefit from having a system that spreads risks and costs more equally  over our lifetimes so that health insurance and healthcare are there for us when we need it most, at a price we can afford at that time.

3. The biggest practical challenge facing Obamacare is that the federal government has too little control over what happens next.   Yeah, I know it is a staple of conservative critiques of the law that it is a big (federal) government take-over of healthcare, but from the very beginning, the ACA was classic example of U.S. federalism—the federal government would provide most of the money and establish the ground rules, while the states would create the structures to implement most of it.   So, as the law was written, the states were supposed to be the ones who would set up the marketplaces (exchanges) by which eligible persons would be able to buy a qualified and federally-subsidized health insurance coverage.  The states were supposed to be the ones to expand Medicaid to the poor- and near- poor, paid for almost entirely by the federal government.  (Originally, the Medicaid expansion was for all intents mandatory, because states could have lost their current Medicaid funds if they didn’t go along—but the Supreme Court decided in 2011 that punishing states for not going along was unconstitutional, making the Medicaid expansion a totally voluntary one for the states).   Because Republican governors and legislatures in most states are continuing to resist Obamacare,  both for political (ideological opposition and a desire to see it fail, see below) and practical reasons (uncertainty about how much it will cost them), most states have opted-out of setting up the health insurance exchanges and only half have agreed to the Medicaid expansion.

In the immediate future, the federal government may (on paper, at least) actually have some more control over the health insurance industry than originally anticipated by the ACA’s framers, because it will run the health insurance marketplaces (exchanges) for the dozens of states that opted-out.   This raises another concern though: will the federal government really be able to carry it out, especially since Congress has not given the administration any additional money to help pay the increased costs it will incur for the federal exchange and the agency responsible for the program has lost billions of dollars in funding because of sequestration?   The administration says it will be ready to operate an exchange in every state that has opted-out—but this is hardly a sure thing.

The key point though is that under the ACA, the federal government does not have the power turn a switch to make the program work the way it wants it to (like it can with Medicare); instead, it must rely on the states, including GOP-led states that in many cases are going to do everything they can to make sure it doesn’t succeed. 

4.     This brings me to the greatest political challenge facing the ACA, which is the unrelenting effort by GOP opponents to try to make sure it fails.   It is no secret that Republicans will continue to try to limit funding for Obamacare’s implementation.  They will push for votes to remove the tax revenue  that the government needs to fund it.  They will point to any problems that can be pinned on the law (e.g. higher premiums for some people, the confusion that will take place as new insurance options are rolled out next year) as evidence that the law isn’t working.  They and their allies will continue to go to court to try to get it overturned.  Most importantly, they will count on state resistance to the law (see #3 above) to make the law’s “failure” become a self-fulfilling reality.  This, they hope, will lead to an “I told you so moment”  and widespread public disaffection with Obamacare.

As the Washington Post’s Ezra Klein notes, “ceaseless efforts Republicans have made to attack the law publicly, impede it procedurally and defund it legislatively. Implementation of a law of this size would always be difficult. But it will be far harder with Republican governors refusing to help and Republican legislators viewing each and every tough problem as an opportunity to chip away at the legislation.”   But this will not result in repeal, he believes. “Obamacare can have a hard implementation in 2014, but President Obama isn’t going to repeal it or even lose reelection over it (though congressional Democrats might). And by 2015, it will be insuring tens of millions of people, the health-care industry will have adapted and many businesses and ordinary Americans will be using the exchanges. At that point, no one is going to repeal it.”

So to summarize, an honest assessment of Obamacare on its third anniversary would  acknowledge that it already is helping tens of millions of people.  It would also acknowledge that the next steps—expanding coverage to up to 30 million uninsured persons and providing better benefits and consumer protections to everyone —will be highly disruptive, but that this shouldn’t surprise anyone, it was supposed to be disruptive.  It would acknowledge that some things will go right and some things will go wrong as a result.  It would note that  the states have a critically important role in making all of this work but acknowledge that many GOP-led states will be doing everything possible to make Obamacare fail.  It would  acknowledge the political reality is that congressional Republicans have no intention of calling a ceasefire in their efforts to make sure that Obamacare’s implementation does not go well, hoping that if the implementation is messy they can decisively turn public opinion against it.

It would also acknowledge that in the end,  Obamacare is not likely to go away, and somehow or another, bumps and  all, it likely will get us to a better place than today, a health care system where nearly all will have access to better and more affordable health insurance coverage.  But getting from here to there isn’t necessarily going to be pretty.

Today’s question: What do you think of my analysis of the “hard truths” about Obamacare on its third anniversary?


ryanjo said...

"The great masses will more easily fall victim to a big lie than to a small one"

I guess if you keep saying that the reasons Americans don't support Obamacare is that they don't understand it, it will eventually be thought to be true.

And if you say it enough that those with existing health insurance are better off, it will also become the truth. Even as we watch our premiums go up 40% in 2 years of Obamacare, as the heath insurers get prepared for the really big con to come. Sorry, can't find those "no-cost preventive services", just the increasing deductibles. We are paying for those new seat belts, but the car didn't have them when delivered.

But it must be true that doctors are paid more,
-- even as the sequester cuts our fees and SGR looms again or evolves to a pay-for performance sham. Oh sorry, that's not really needed for healthcare "reform" to succeed. If Obamacare runs a little short on cash, I wonder who will be paid less?

And those 30 million will have spanking new insurance, except there's few exchanges to buy them, and the feds won't get any money to set them up. But the insurance is there, isn't it?

It was an amusing assessment, though, of an underachieving beginning and an impending disaster.

Ashok V. Daftary, MD, FACP. said...

The above comment is honestly correct. Several years ago I predicted that the Hospitalist movement would reduce the value of the ambulatory internist.
I predict that ObamaCare will be a financial and a healthcare disaster. It will be a stepping stone to a single payer system..... The only panacea for a broken and broke healthcare system

Jay said...

I hope you turn out to be right, Bob. So far patients are confused and uncertain. So are the doctors. The go-live date is nine months away and in Illinois there is no exchange and no one even knows what the choices will be among policies. Employers don't know what their costs will be, so their planning is hamstrung. No timeline has been announced for any of the steps necessary in the next nine months. When will the Feds organize the exchange? When will the information on policies available thru the exchange become available? What is the deadline for sign up so the policy will be in effect? I hope your faith in the Obama admin is justified by events but performance to date has been dismal on execution of the PPACA plan out here in deep blue Illinois. I fear to imagine what it's like in red states.

ryanjo said...

Maybe we should stop calling Obamacare the Affordable Care Act:
"The Society of Actuaries is out with another estimate of health insurance rate increases as a result of implementation of the Affordable Care Act ("Obamacare")...they are estimating an average increase of 31.5% on account of the new underwriting reform and benefit expansion requirements of the health law..."Obamacare" supporters in denial had better get ready for reality." (

BDoherty said...

About those rate increases:

1. They are only in some states, and only in the individual insurance market. Not in the large-employer based market, where most of us get coverage.

2. The premium increase do NOT equal how much people will pay for their insurance, even in the individual insurance market. Because there are subsidies and limits on out of pocket costs for people with incomes up to 400% of the poverty level, the amount an eligible person will pay is the difference between the premium AFTER the subsidy is applied.

3. Most importantly, the insurance you will be buying will have better benefits, lower deductibles, coverage of preventive services at no cost, no restrictions on pre-existing conditions, no lifetime or annual limits, and at least 80-85% of the premium collected must go go benefits, not profit or administration--or you get a refund. So it isn't an apples to apples comparison. It is like comparing a 1960 era car with no seatbelts, no airbags, no crash protection and that gets 10 MPG with a 20013 car that has all those safety features and gets 40 MPG. Of course the latter car will have a higher sticker price, but it will be safer and stretch your gas dollars when you drive it. And it will last years longer.

Read this for an accurate explanation of the premium issue:

ryanjo said...

Bob, I must disagree.
1. There will be higher rates for both individual and small groups under 50. Businesses from 2-50 workers employ just over half the working population. Those persons are going to get the higher premiums from their company or high individual rates if no company plan.
2. Obamacare advocates love that car analogy. Most buying new health insurance will not be using preventive care, won't exceed annual limits, or need the other "enhancements". I don't need are car with 5 tires or seatbelts on the roof. But I have to pay for them, don't I ?
3. Who is going to pay the health insurance subsidy, do you think -- why taxpayers, of course. The less than 50% of us who pay taxes.
4. The bottom line is that this is exactly the objection many of us had when the ACA was enacted -- the cost was understated. The CBO in Nov 2009 told us that premiums would rise 10%. Now it seems to be at 30% or more.

BDoherty said...

Fsct: health care price increases since Onamacare was enacted were the lowest in 50 years.

And, I have been driving 40 years and I have never had an accident, never had an air bag deploy, never had a seer belt come into play. But I sure glad the government requires them.

Justice requires that the young healthy and well off subsidize those who are not. I am glad to do my part. And I am wiling to pay higher taxes to make this possible. Just as I do for Social Security and Medicare.

Anonymous said...

One thing that will be required before you can have a honest assessment on Obamacare, someone that is honest and in charge. Do you know of anyone like that?

Unknown said...

I must disagree that your assessment of Obamacare is an honest one. It is clear that a very small percentage of the previously uninsured are now covered using government spending and much higher premiums on the middle class. A few more are also now covered under Medicare.

In return, my patients are now saddled with much higher premiums and outrageous deductibles in the thousands of dollars. For many the insurance is only useful for catastrophic care. There are few incentives to limit costs and procedure oriented specialists continue to have markedly higher pay. From the start, the ACP's promotion of the so called 'Affordable' Care Act has been disappointing.

Now that the ACP has become a complete SJW organization by proclaiming the dangers of climate change I am rethinking my membership in this organization, which used to be about promoting Internal Medicine and improving patient care.