Questions for 2014
Today’s discussion of the Affordable Care Act (ACA) is focused on immediate implementation milestones leading up to 2014 when the law’s major provisions are set to kick in. This is a critical period when the foundation for the ACA is being established and key building blocks such as the state Medicaid expansions, exchanges, and a host of regulations about other elements of the ACA being produced by HHS are getting our attention.
But there is also an ACA horse race mentality threatening to take over: Is this or that regulation on time or late? How many states have committed to the Medicaid expansion so far or to one kind of exchange or another? Will every element of the ACA be ready to go in 2014 as envisioned in the legislation? Is the ACA succeeding or failing? Everybody is keeping score. In a partisan Washington with a gotcha media, it’s easy to get lost in the weeds. Here are five big picture questions to keep in mind about the ACA.
1. As Republican governors slowly come on board, can the ACA make the transition from an ideological and partisan war zone to a more bipartisan effort to benefit people, with more traditional tensions between Washington and the states over money, flexibility and control?
Governors, historically more pragmatic than ideological, may be reverting to form and could give the ACA the bipartisan support on the ground it has not had in Washington. It is still too early to say if the Republican governors will actually change the politics of the ACA. Conservative legislatures in some states, including Florida, are putting up resistance to their governors’ decisions. Some governors are also putting their own twist on how their Medicaid expansions will operate, to distance themselves from Obamacare at the same time as they embrace the Medicaid expansion and substantial federal funding for it (though not necessarily the exchanges and the rest of the law). More of this two-step – embracing while distancing – may be necessary to bring conservative state legislatures along. It is possible that the governors, pushed by providers in their states and local government and their own sense of pragmatism, will slowly transform the ACA from a partisan conflict to a more typical federal-state program with more traditional state-federal tensions over money and control. To be clear, it is the federal money and the potential to provide coverage for their citizens which is moving the Republican governors, not some overnight conversion to Obamacare, but the longer term result could be a much more bipartisan complexion for the law.
2. Will there be a rush to judgment in 2014 when there are inevitable early implementation stumbles and enrollment builds more slowly than expected?
It may be time to recalibrate expectations about timetables set originally to pass legislation to reflect new realities. Since the ACA passed, the Supreme Court effectively made the Medicaid expansion a state option. Many governors and legislators also waited for the outcome of the election to decide whether or not to move forward on ACA implementation. As a result, the ACA being implemented now is no longer exactly the same health reform law that passed the Congress, and the circumstances affecting implementation have changed. Already the Congressional Budget Office (CBO) has adjusted their enrollment projections. It will take time for enrollment to build up as new systems and outreach efforts gear up. Our newest tracking poll shows that the public remains confused about what the ACA does, including groups like the uninsured who will benefit most. This is not surprising, since mostly what the public has heard for three years is partisan bickering about the ACA. Only now as we head for implementation of its key provisions in 2014, is the ACA beginning to be introduced to the public for real. This transition point from political talking point to reality is both a challenge and a critical opportunity for the law.
To be clear, implementation deadlines should not be changed. People have waited long enough for the coverage and other benefits the ACA will provide; and if they are changed, the implementation effort will slow accordingly. Quite the contrary, now is the time for an all-out implementation effort. But expectations may now need to be adjusted to reflect post Supreme Court realities and the uncertainties of current federal budget debates.
3. Will there be a backlash to the individual mandate and the law in general if some people find the policies they are now required to buy unaffordable, especially those who will not be receiving premium subsidies in the exchanges?
Policies available in the exchanges will provide far better value than those offered today in the largely broken non-group market. Even so, the affordability of bronze and silver plans as perceived by people who buy them, not by experts calculating their actuarial value in advance of implementation, will be a critical moment for the ACA. And people will be required to buy these policies. The mandate worked smoothly in Massachusetts, the only place where it has been tried. The citizens of the state like the program and by all accounts no one ran from Massachusetts for Rhode Island or New Hampshire because of the mandate. Does that mean the ACA’s mandate will work smoothly in the rest of the country? The vast majority of people buying policies in exchanges will like the deal they are getting but some may not. How will the press handle a relatively small number of people experiencing rate jitters? How will policymakers respond?
4. If, as I suspect, costs begin to rise again when the economy strengthens, will that be blamed on the ACA?
It should not be. The ACA supports important Medicare payment and delivery experiments. It also has provisions (medical loss ratio thresholds and rate review) that put downward pressure on premium increases in some parts of the market. And it is entirely plausible (to me) that the ACA has precipitated a market response beyond its own Medicare pilot projects resulting in changes in payment and delivery and at least temporary cost moderation, just as the mere threat of health reform legislation has done in the past. But the ACA is neither the cause of nor the ultimate solution to the larger problem of rising health care costs. The causes of the recent slowdown in health costs are a much bigger topic that we will be addressing in a forthcoming analysis. We have seen slowdowns in health costs before and they have always been followed by upticks. It is important to understand when the slowdown started, how much of it is due to the effects of the weak economy on utilization or, potentially, to changes in health delivery and financing, and what the future outlook might be.
5. In the hyper-partisan political system we have with today’s media, is there the capacity to learn from implementation so health reform can continue to be reformed and improved?
The idea that you pass a law, write regulations, implement it, and then judge its success or failure bears little relationship to how programs do or should work. Not everything can be anticipated when legislation is written, and much that goes into legislation is designed to win enough votes for it to pass rather than for it to work optimally in the real world. This legislation too was passed without the normal reconciliation between House and Senate plans, which offers opportunities to fix problems in the law and choose the best of both approaches. Circumstances also change as programs are implemented. Reflecting this, Medicare and Medicaid have changed substantially over time. Can adjustments to the ACA be made in this Congress? In the states? By our current largely frozen political system? The kinds of changes often made to improve legislation do not seem possible in the current Congress.
In 2014 there will be an ample supply of both early ACA success stories and stumbles. It will take years for scientific evaluations to measure the impact on access and financial burdens and other outcomes. The year 2014 is merely the date when major ACA provisions begin, and it will take years beyond 2014 before it is clear how many states undertake Medicaid expansions or what the ultimate mix of state versus federal exchanges is and how many people ultimately benefit from the ACA’s coverage expansions. While no doubt some will try, 2014 is not the right time to declare success or failure for the ACA any more than 1966 was the right time to do the same for Medicare or Medicaid.