Can We Learn From ACA Implementation and Improve the Law?

Senator Baucus made headlines recently when he predicted a “train wreck” for Obamacare. David Brooks predicted “chaos” in a recent column. In a news conference, the President offered a different perspective.  “There’ll still be, you know, glitches and bumps…. That’s pretty much true of every government program that’s ever been set up,” Obama said. “But if we stay with it, and we understand what our long-term objective is, which is making sure that in a country as wealthy as ours, nobody should go bankrupt if they get sick, and that we would rather have people getting regular checkups than going to the emergency room because they don’t have healthcare, if we keep that in mind, then we’re going to be able to drive down costs.”

There are always problems in big government programs and unintended consequences that could not be predicted in advance of implementation. The longer term question is not whether there will be problems – there will be glitches and there will be even more successes as people gain coverage and insurance is reformed – but whether the political system today has the capacity to learn from implementation, adapt and make improvements.

In the history of domestic programs there are few if any examples of “train wrecks” or “chaos”. Yes, Medicare Catastrophic was, well catastrophic, but it was never implemented.  Social Security, Medicare, and Medicaid were all implemented reasonably smoothly. In the ACA, like Medicaid or welfare, states bear a lot of responsibility for implementation and administration and there will be substantial variation in performance across the states. Some view that as a problem and some see it as a strength. One under-appreciated aspect of the ACA is how fundamentally the Supreme Court changed the law when it made the Medicaid expansion a state option. Many governors also waited for the outcome of the election to decide what they would do. The result is that the program being implemented is, in important respects, not the same as the one originally envisioned in the statute.

There is no doubt states will make adjustments as implementation proceeds and they learn what is working and what is not in their exchanges and Medicaid expansions. Right now only seven states are planning “active purchaser” exchanges that, among other things, more aggressively try to control premium increases among plans offering business in their exchanges. One prediction I will make (it could be wrong) is that over time more states running their own exchanges will move away from the passive Expedia.com model exchange towards a more active purchaser model. HHS will also have the ability to make changes through administrative authority, waivers, and new regulations. The question is the Congress. Typically the process of learning from experience culminates in Congress with new legislation. Welfare reform legislation, for example, began in the Reagan years but was revisited comprehensively in the Clinton years. And both Medicare and Medicaid have been substantially modified through successive waves of legislation over the years. Laws are changed as we learn what works, as needs and circumstances change, and as political support for needed changes coalesces. Can today’s hyperpartisan, largely paralyzed Congress agree on legislation to improve ACA as we learn from implementation? Would Republicans agree to anything Democrats want? Would Democrats open up the ACA for legislative tinkering? It is not easy to envision agreement on ACA-related legislation any time soon.

One thing that could change the picture somewhat is the current negotiations occurring between several states and the administration over the Medicaid expansion. If HHS and these states can successfully negotiate arrangements that give the states the flexibility they want and at the same time provide adequate protections for beneficiaries, it will bring more red states and their governors into the fold and create a much more bipartisan base for the ACA in the states than it has had in Washington, as well as a broader constituency for changes to improve the law over time. This will not happen overnight.

Another factor that will affect the ability to learn and adapt as implementation proceeds is media coverage. If journalists focus on both what is working well as well as what is not, they can make a real contribution not only to public judgment about the ACA but future efforts to improve it. If they focus only on gotcha outlier horror stories that do not reflect general experience with the ACA, their reporting will do more to fuel political partisan debate than inform future policy.

Of course the Congress itself could change in coming years, but with only thirty to forty seats up for grabs in the House of Representatives and the others mostly safe districts that lean right or left, redistricting has baked a certain degree of polarization into Congress for the immediate future.

As implementation unfolds there are as many questions about the ability of our political system to learn from implementation and respond intelligently to the ACA as there are about the ACA itself.