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Lincoln Mitchell Headshot

The Future of the Health Insurance Policy

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The current problems with the rollout of the Affordable Care Act (ACA) have mostly focused on the problems with the website. Many people, including me, encountered little but frustration while trying to explore health insurance options in the days immediately following the rollout. This is an embarrassment for the administration and a problem for those who tried in the first days to get coverage through the ACA. It also deprived the administration of thousands of feel good stories of people, families and small businesses getting coverage through the health care exchange.

While this is a bad story for the Obama administration, at the end of the day, it is a technical glitch. This is not the first time that a highly ballyhooed website or technological product did not work well on day one. In time the website will be fixed and these first few days will be forgotten, but the website is not the biggest problem facing the ACA.

The bigger problem is that for the ACA to work financially, healthy people, particularly young childless healthy people, need to sign up for insurance. In any health insurance system, these young healthy people keep the cost down for others. While this may not seem fair, any American who has received health care through their employer has been part of a similar system. At a big company, the young healthy workers subsidize the older and less healthy workers. The difference is that people who get health insurance through their jobs are mandated to participate in the program. Of course, everybody is mandated to buy health insurance, but it will soon become clear that the enforcement of this mandate will not be strong.

This problem can be turned into a talking point with opponents of the ACA claiming that Obama counted on these people to keep costs down, and was not honest with the American people when he based cost estimates for the ACA on the assumption that enough young healthy people would enroll. Similarly, supporters of the ACA can propose strategies for making enrollment more appealing for young, healthy childless Americans.

The roots of the problem are in the nature of the ACA and the debate from which it emerged. Because President Obama, wisely or not, discarded the single payer approach from the outset, and the public option soon after that, he was forced to support a Republican initiative. The President was also able to get some good reforms into this initiative, such as making it harder to turn people down for insurance due to pre-existing conditions. The result of this is that the US still does not have a health care program or policy. It has a health insurance policy.

This is better than what we had a few years ago, but it is still subject to the economic logic of health insurance. The economic logic of health insurance is that insurance companies need to make money. The policy logic of health care is that citizens need to have access to health care. These are related, but different points. The Republican attacks on President Obama suggesting he was a socialist because of the ACA were nonsensical at the time, but they seem particularly absurd now.

The future of the ACA is not clear. Republican fantasies and hatred for Obama notwithstanding, the bill is not likely to be overturned anytime soon, but the debate over health care is also still not over. The Republicans will continue to attack the bill and its creator, because they cannot help themselves, but Democrats will also try to modify the bill, but in a different way.

The ACA is the biggest and most significant piece of domestic legislation from a Democratic president probably since the Great Society, so Democrats are heavily invested in its success. Additionally, as people who have health problems, or simply have children and need health insurance use the bill to get health coverage, the ACA will become entrenched and well liked by many. This may provide an opening for progressive reform to the bill. Providing more subsidies, lowering the Medicare age by a few years to take some of the more expensive cases out of the health exchange pool, or perhaps even revisiting a public option for some segment of the uninsured are some of the possibilities that might be explored.

The battle over reforming the ACA will be just as intense, although not as visible or dramatic, as the battle over the legislation itself. The brilliance of the ACA, once the unfortunate but relatively inconsequential technological problems are overcome, could be that it is just good enough to have enough supporters to guarantee its survival, but flawed enough to require fixing. If this is the case, it is more likely the change will be in the form of an expanded health care policy rather than abolishing the flawed but useful health insurance program we now have.