The Af­ford­able Care Act’s sec­ond act

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But the fight to un­der­mine af­ford­able ac­cess to health­care is far from over. As the co-au­thors of the most re­cent failed re­peal ef­fort put it, “when it comes to Oba­macare, the worst is yet to come.”

Amer­i­cans must not let that hap­pen. A grow­ing num­ber of gov­er­nors, may­ors, and cit­i­zens recog­nise that Oba­macare has been a suc­cess. The ACA has re­duced dis­par­i­ties in ac­cess, en­cour­aged in­no­va­tions in health­care de­liv­ery es­sen­tial to stem­ming growth in costs, and, most im­por­tant, pro­vided in­surance cov­er­age and im­proved care for tens of mil­lions of Amer­i­cans.

Four steps are cru­cial to en­sure that the ACA con­tin­ues to work – and works bet­ter.

First, pro­po­nents need to go on the of­fen­sive. Among the most disin­gen­u­ous ar­gu­ments made by the Repub­li­can sen­a­tors who spon­sored the latest re­peal ef­fort was that their bill of­fered a choice be­tween so­cial­ism and fed­er­al­ism. The ACA is nei­ther so­cialised in­surance nor so­cialised medicine: along with the pub­lic in­sur­ers Medi­care and Med­i­caid, pri­vate in­surance plays a crit­i­cal role, and most care, re­gard­less of the source of in­surance, is left to the pri­vate sec­tor.

And the ACA is an ex­am­ple of fed­er­al­ism at work – a na­tional com­mit­ment to health in­surance for all Amer­i­cans, along­side con­sid­er­able state-level flex­i­bil­ity re­gard­ing the poli­cies needed to re­alise this com­mit­ment. Un­der the ACA, the fed­eral gov­ern­ment uses a com­bi­na­tion of reg­u­la­tions, sub­si­dies, and man­dates to ap­proach univer­sal cov­er­age. But sig­nif­i­cant dis­cre­tion is af­forded to states in the or­gan­i­sa­tion and reg­u­la­tion of in­surance mar­kets and in the de­liv­ery and cov­er­age of Med­i­caid and the Chil­dren’s Health In­surance Pro­gramme (CHIP).

In­deed, fol­low­ing a 2012 Supreme Court de­ci­sion, many states de­cided not to par­tic­i­pate in the Med­i­caid ex­pan­sion that was an es­sen­tial ACA tool for in­creas­ing health in­surance cov­er­age. Thirty-two states, in­clud­ing the District of Columbia, chose to par­tic­i­pate, pro­vid­ing health in­surance through Med­i­caid to an ad­di­tional 10 mln in­di­vid­u­als, or about 56% of those newly in­sured since 2013. ACA’s cov­er­age gains were large among low-in­come peo­ple liv­ing in states that ex­panded Med­i­caid.

Though cov­er­age rates have in­creased in all states since ACA’s pas­sage, they have im­proved most in states that chose to ex­pand Med­i­caid. A re­cent sur­vey of rig­or­ous stud­ies con­cludes that states ex­pand­ing Med­i­caid un­der the ACA have re­alised bud­get sav­ings, rev­enue gains, and faster eco­nomic growth. No stud­ies have found neg­a­tive ef­fects from Med­i­caid ex­pan­sion on em­ploy­ment or on the pro­vi­sion of pri­vate in­surance by em­ploy­ers.

The sec­ond step needed to de­fend the ACA is to en­sure that those run­ning it (es­pe­cially in Wash­ing­ton, DC) are do­ing their job to make it work, not dis­man­tling it in se­cret. The ACA rests on a three-legged stool: reg­u­la­tions, man­dates and sub­si­dies. Ef­forts are un­der­way to weaken all three.

Pres­i­dent Don­ald Trump’s ad­min­is­tra­tion must not be al­lowed to crip­ple en­force­ment of the in­surance man­date for the healthy, or to slash out­reach and advertising to help in­di­vid­u­als en­roll in the health in­surance for which they are eli­gi­ble. Yet such stealth at­tacks are al­ready hap­pen­ing.

Nor can those who want to sub­vert the ACA be al­lowed to make tax cred­its less gen­er­ous, elim­i­nate es­sen­tial health ben­e­fits (for needs as di­verse as preg­nancy and opi­oid ad­dic­tion), or de­fund sub­si­dies that help peo­ple meet out-of­pocket ex­penses. The loss of such sub­si­dies threat­ens in­surance com­pa­nies’ bot­tom lines, and is a ma­jor rea­son why many are drop­ping out of the mar­ket for in­di­vid­ual in­surance.

Third, Congress must re-fo­cus on bi­par­ti­san ad­dress recog­nised prob­lems in the ACA.

There is broad agree­ment on a range of im­prove­ments that health ex­perts have been ad­vo­cat­ing for some time, but that have been ig­nored in the “re­peal and re­place” cir­cus. One of the main eco­nomic ad­vis­ers on ACA, Zeke Emanuel, says three key changes are cru­cial, “En­force the man­date; guar­an­tee the sub­si­dies to the in­surance com­pa­nies for cost­shar­ing, the de­ductibles and co-pays for fam­i­lies mak­ing less than $50,000; and make sure the in­surance com­pa­nies have risk cor­ri­dors, so if they get too many sick pa­tients, they’re pro­tected against that.”

Fi­nally, the ACA’s de­fend­ers should fo­cus on pro­duc­tiv­i­tyen­hanc­ing innovation. As we wrote in 2014, “innovation is prob­a­bly the least dis­cussed as­pect of health­care re­form. Yet it is cru­cial to ‘bend­ing’ the sec­tor’s cost curve, be­cause it

ef­forts

to en­ables the de­liv­ery of qual­ity health care in cost-ef­fec­tive ways. Oba­macare has pro­vided pow­er­ful new in­cen­tives for such innovation.”

Many states are lead­ing the way by ex­per­i­ment­ing with new mod­els that fo­cus on de­liv­er­ing bet­ter pa­tient out­comes at lower cost. Six states have re­ceived “demon­stra­tion waivers” in their Med­i­caid ex­pan­sion pro­grammes in a wide va­ri­ety of ar­eas, in­clud­ing pre­mi­ums, cost-shar­ing ar­range­ments, and de­liv­ery sys­tems. Over half the states are lever­ag­ing the $1 bln ear­marked in the ACA for the Cen­ter for Medi­care and Med­i­caid Innovation to en­cour­age state-level ex­per­i­men­ta­tion.

Re­cently, Hawaii be­came the first state to re­ceive an ACA “state innovation waiver,” in­tro­duced in 2017. Eleven other states are de­vel­op­ing waiver pro­pos­als. This pro­vi­sion pro­vides broad flex­i­bil­ity to states to re­design their health in­surance and de­liv­ery sys­tems, so long as in­no­va­tions do not leave more peo­ple unin­sured, make cov­er­age less af­ford­able or comprehensive, or in­crease the fed­eral deficit. A state could use its ACA fund­ing to pro­vide cov­er­age un­der a state-run pro­gramme, and some states are con­sid­er­ing a sin­gle-payer ap­proach.

Many states – whether Repub­li­can, like Arkansas and Ten­nessee, or Demo­cratic, like Cal­i­for­nia and Mas­sachusetts – are al­ready show­ing signs of suc­cess in pro­duc­ing bet­ter health out­comes at lower cost. With lit­tle ac­tion likely to oc­cur at the fed­eral level, states must ac­cel­er­ate these early ex­per­i­ments and use their mar­ket power as in­surance pur­chasers for Med­i­caid clients and state em­ploy­ees to push for ref­er­ence pric­ing, qual­ity i mprove­ments, and cost trans­parency. They can also ac­cel­er­ate the move to­ward lower-cost care-de­liv­ery sys­tems, like med­i­cal homes, and away from fee-for-ser­vice pric­ing to sim­pler bun­dled pric­ing for many pro­ce­dures.

Even ACA pro­po­nents know that Oba­macare needs im­prove­ment. So­lu­tions are avail­able, and they are to be found not in disin­gen­u­ous grand­stand­ing about so­cial­ism, but in in­no­va­tions that lever­age the fed­er­al­ist flex­i­bil­ity that is a defin­ing fea­ture of US democ­racy.

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