When passed in 2010, the Affordable Care Act (ACA), often called “Obamacare,” had three basic goals: increase access to health insurance, reduce costs and spending, and offer patients stability with respect to their insurance coverage. By offering a subsidy for low- and middle-income Americans to purchase private insurance plans, the ACA was successful in expanding coverage for about 14 million previously uninsured individuals, including those with pre-existing medical conditions.
Although Congress failed to repeal the ACA in 2017, many of its key provisions have since been whittled away or weakened through acts of both Congress and the Executive Branch. For instance, the recent tax reform legislation repealed the requirement that individuals show proof of insurance. Also, the administration has championed the expansion of health association plans on the premise that they will afford consumers access to cheaper insurance options.
Other steps are also underway. The Centers for Medicare and Medicaid Services (CMS) is withholding more than $10 billion in risk adjustment payments to health insurers participating on the exchanges pending a decision by a federal court; the Justice Department has decided not to defend the ACA against constitutional lawsuits filed by 20 states; and most recently CMS has cut funding for the Navigator program, which provides guidance for consumers when seeking coverage on the ACA exchanges.
To understand where we are today, we need to understand how we got here. The U.S. is unique in the developed world in that healthcare is provided on a private rather than a public basis. The current structure of health benefits had its start after World War II, when employers began offering health insurance to recruit and retain workers. Over the decades, health insurance gradually became an entitlement that workers expected their employers to provide. Many companies had the resources to subsidize coverage for their employees, and the government promoted this model through the use of tax incentives.
Today, as was the case before the passage of the ACA, employers find it increasingly difficult to pay the steadily rising cost of health benefits for their employees. Those that offer health insurance as a benefit often require employees to contribute through payroll deductions. The result is a continuing squeeze on the financial resources of many workers as well as employers. Are we now at a moment of “deja vu all over again”?
Whether you agree or disagree with Obamacare, the ACA provided a new pathway for millions of Americans to move from uninsured to insured and protected millions of Americans with pre-existing conditions. If the actions noted above and those that are still to come end up undermining the confidence of consumers in the ACA and the willingness of health plans to offer products through the federal exchanges, what will come next?
Do current policy makers and politicians truly believe that a reversion to the pre-ACA status quo will offer a sustainable and credible model? Will millions of Americans lose access to insurance coverage? Or will the federal government be able to come up with a viable and workable replacement program?
If there is an ACA “replacement” program, will it continue to offer comprehensive benefits, will persons with pre-existing conditions have access to “affordable” benefit plans and the care they need, or will they be confronted with low-premium, limited benefit plans with very high deductibles?
As the current marketplace for health insurance benefits continues to evolve, both consumers shopping for individual coverage and businesses looking at group plans need to understand what they are purchasing regarding deductibles, co-pays, scope of benefits, and provider networks ,among many issues.
Should the ACA ultimately crumble, the collateral effects will impact not only those who first obtained insurance coverage because of ACA but those who receive health insurance from their employers. If there is a reversion back to the number of uninsured persons pre-ACA, the number of people accessing care through hospital emergency departments will likely increase.
Hospitals and treating physicians may find themselves providing more services without reimbursement resulting in uncollectable bad debt. Those providers will inevitably look towards private insurers and paying patients to cover those losses, resulting in a spiral of higher premiums and fees, creating a financial ripple effect throughout the healthcare marketplace.
With the fall midterm elections looming, it’s unlikely that Congress will be dealing with healthcare until 2019. Nevertheless, now is the time to have the discussion on how best to repair or replace the ACA. As history tells us, going backwards to the pre-ACA era will not result in a sustainable system. Despite political sound bites to the contrary, it is highly unlikely that a single-payer option or a Medicare for all approach is viable.
Instead, we need to learn from both the strengths and weaknesses of the ACA to build a long-term sustainable approach that promotes access to care, brings insurance coverage within the reach of the many, contains costs, and aligns economic incentives among payors, providers and patients, while improving the nation’s overall level of health.
Attorney Gary Scott Davis a partner at McDermott Will & Emery’s Miami office, Board Certified in Health Law by the Florida Bar Board of Legal Specialization and Education Care. He focuses his practice on healthcare issues.