We are being told now that Republicans are serious about undoing the Affordable Care Act (ACA) that the president signed in March. They want to eliminate specific provisions they don't like and, perhaps even more importantly, to starve it of the funds needed for implementation. Sure, the law is imperfect, but although the case for it is very strong, its supporters have been, if not invisible, ineffective to date. In this article, I outline some of what the new law will accomplish.
The law's provisions
The case for the law begins with its many positive features, including these: It corrects some of the worst flaws in the private insurance market that have caused untold harm to millions of Americans. Beginning now, insurers can no longer rescind a policy when the insured uses services; set lifetime benefit limits; set annual benefit limits; or deny coverage for children because of pre-existing conditions (2014 for everyone). Insurers must also cover children on their parents' policies up to age 26 and recommended preventive care and immunizations without charging cost-sharing amounts.
Further, insurers in the large-group market must spend at least 85 percent of premium income on medical care; and those in the small-group and individual markets, at least 80 percent.
In 2014, insurance premiums for covered plans can no longer vary by differences in health status (but only by age, region, whether the policy covers an individual or family, and for smokers).
With tax credits, it will help small businesses offer coverage to employees. Beginning in 2014, everyone will be required to buy insurance, which will make possible larger and more diverse risk pools and help to keep down premiums. An estimated 32 million Americans who do not have it now will be able to get comprehensive insurance.
States will set up special insurance markets (exchanges) for people to buy affordable coverage if they cannot get it through employment. Low- and moderate-income Americans will be eligible for subsidies to help them buy coverage; and out-of-pocket cost-sharing will be reduced so they can use covered services. Finally, Medicare beneficiaries who reach the "doughnut hole" in the Part D drug program will receive a $250 rebate in 2010, and the hole will close completely in 2020.
The law's limitations
On the other hand, the new law has limitations. Fee-for-service will remain the principle method for paying providers. As a result, incentives that tend to increase the volume of services provided will continue to dominate the system and will contribute to increasing overall spending.
At the same time, containing health care costs will be difficult without also cutting benefits or the quality of care because insurers will have few tools available for the purpose. The new law -- justifiably -- will constrain their ability to cut benefits or increase cost-sharing, two ways they kept down premiums until now. Proposals to moderate these effects did not get enough support to make it into the final bill. Bottom line: Unless insurers pay providers for "taking care of people" instead of for individual services, providers will not have an incentive to find innovative ways to serve their patients, and it will be hard to keep spending from continuing to rise.
Nonetheless, the CBO estimates that federal spending will decline over 10 years and per capita spending should decline, as well. But overall health care spending will probably increase in part because more people will have insurance and be able to use services they cannot afford now.
Other developed countries cover everyone, spend less, have more reliable quality of care, better health statistics, and more satisfied citizens. Why can't we do what they do? Why should we be satisfied to leave things as they are?
Some may be opposed because they really wanted cost-containment, but got expanded access to insurance and care instead. Yet, if access doesn't increase, the only way our insurance system can control spending is by cutting benefits or quality of care.
Many assume that the access provisions primarily benefit poor people who don't work or vote. In fact, however, almost all of those without insurance do work -- sometimes more than one job. Their employers either offer coverage that is too costly for many to afford or do not offer insurance at all. And since both those trends are growing, few can count on keeping their good coverage.
Finally, private insurers will be free under the new law to develop innovations that could stimulate health care providers to find ways to improve quality of care and efficiency, but to date, they have shown little interest in doing so.
In the end, the new Affordable Care Act deserves support because, although imperfect, it already provides real help to many Americans and permits us to make real progress toward a better health care system. The alternative is not a better law, but no action. Yet we can't afford that because the health care system is already unreliable, is deteriorating still further, and will only get worse unless we act to improve it.
Note: For more detail about why reform needs support, see my book, Still Broken: Understanding the U. S. Health Care System, especially the first 5 chapters.