Health Care Reform in Massachusetts: State Model for the Affordable Care Act Is Working And Broadly Popular
The Affordable Care Act was signed into law one year ago. It is modeled in large part on the landmark Massachusetts health reform law enacted four years earlier in 2006. Opponents of the Affordable Care Act often attack it by distorting the facts about the Massachusetts experience. They selectively alternate between snapshots of and trends in Massachusetts and comparisons between Massachusetts and the United States.
The most appropriate way to assess the impact of the Massachusetts law is to compare changes over time in things like health coverage and premium costs in Massachusetts to changes over time in the United States as a whole. We use that approach below to debunk many of the myths opponents propagate regarding Massachusetts’s experience with health care reform.
Massachusetts increased health coverage while coverage declined in the rest of the country.
Myth
The Massachusetts law failed to significantly reduce the ranks of the uninsured in the state.
Fact
The Massachusetts health reform law dramatically increased the insurance rate in the state over a period when the national health coverage rate declined. As of the end of 2010, 98.1 percent of the state’s residents were insured compared to 87.5 percent in 2006 when the law was enacted. Almost all children in the state were insured in 2010 (99.8 percent). In comparison, at the national level the health insurance rate dropped from 85.2 percent in 2006 to 84.6 percent in 2010.
Employers continued the same level of health coverage in Massachusetts while dropping people in the rest of the country.
Myth
The Massachusetts health reform law is eroding employer-sponsored health insurance.
Fact
The number of people in Massachusetts with employer-sponsored health insurance has not dipped below 2006 levels since passage of the health reform law. Approximately 4.3 million people in Massachusetts obtained health insurance through their employer in 2006. This figure increased to 4.5 million in 2008 before returning to 2006 levels in 2010. In comparison, the number of nonelderly people in the United States with employer-sponsored health coverage declined from 161.7 million in 2006 to 156.1 million in 2009.
Since passage of Massachusetts’s health reform law, a larger share of the state’s employers have offered health insurance to their workers when compared to the United States as a whole. At the national level only 60 percent of employers offered health coverage to their employees in 2005. This is significantly lower than Massachusetts’s rate of 70 percent at that time. The Massachusetts rate increased to 76 percent in 2009, which is 7 percentage points higher than the national figure for 2010.
People buying insurance on their own in Massachusetts are paying lower premiums. Premiums in the nongroup market have increased in the rest of the country.
Myth
Massachusetts residents are paying higher premiums in the nongroup market as a result of the health reform law.
Fact
Nongroup health insurance premiums in Massachusetts have fallen by as much as 40 percent since 2006 because health reform brought healthy people into the insurance market. In contrast, at the national level nongroup premiums have risen 14 percent over that period of time.
More than 98 percent of Bay Staters met the law’s individual insurance requirement.
Myth
A significant portion of Massachusetts residents are ignoring the mandate and only purchasing health insurance when they need care.
Fact
The size of Massachusetts’s individual market more than doubled after passage of the health reform law. This boost and the accompanying drop in the average cost of individual premiums were due in part to more healthy—and previously uninsured—individuals entering the market. Only 1.3 percent of the state’s 4 million tax filers who were required to and did report their coverage status were assessed a penalty for lacking coverage in 2008, the last year for which complete data are available. About 26,000 of these 56,000 people were actually in compliance for part of the year.
The cost of health care in Massachusetts is in line with expectations.
Myth
The Massachusetts law is bankrupting the state.
Fact
The fiscally conservative Massachusetts Taxpayers Foundation, or MTF, finds that under reform, “State spending is in line with what [the organization] expected.” An MTF report released in 2009 found that state spending on health reform increased from $1.041 billion in fiscal year 2006 to a projected $1.748 billion in fiscal year 2010—an increase of $707 million over the four-year period, half of which is covered by the federal government.
Higher-than-expected enrollment in Commonwealth Care, the state-subsidized health insurance program, initially raised fears that policymakers had dramatically underestimated the number of low-income uninsured in Massachusetts. These concerns, however, were unfounded. Commonwealth Care enrollment peaked in mid-2008 with 176,000 members. The MTF attributes the initial rapid growth in Commonwealth Care enrollment to the state’s early success in getting residents signed up for the program.
The majority of people in Massachusetts like the health reform law, and it has gotten more popular over time.
Myth
The Massachusetts health reform law is highly unpopular among members of the public, the business community, and policymakers.
Fact
Support for the law is strong among members of the public. Sixty-one percent of the Massachusetts nonelderly population approved of the law when it passed in 2006. Two years later, 69 percent of nonelderly adults viewed the law favorably. In a survey of employers conducted in 2007—shortly after passage of the health reform law—a majority of Massachusetts firms surveyed agreed that “all employers bear some responsibility for providing health benefits to their workers.”20 A survey of employers conducted a year later—after the individual and employer mandates were implemented— found that a majority of firms believed the law was “good for Massachusetts.”
The Massachusetts health reform law was also a bipartisan achievement, drawing support from both sides of the aisle throughout the process. The law was passed by a Democratic legislature with support from its Republican members and then signed by GOP Gov. Mitt Romney.
Massachusetts is building on its 2006 reforms to promote better quality care at lower costs.
Myth
Current Gov. Deval Patrick is proposing to ration health care in Massachusetts.
Fact
Gov. Patrick’s proposal would make Massachusetts a leader in nationwide efforts to reform health care delivery and bring down costs. The governor has proposed new tools for achieving integrated care—by holding providers accountable for working with each other and their patients to coordinate and delivery higher-quality care at a lower cost.
These innovative tools encourage providers to deliver better care—replacing the current payment system’s set of incentives that provide more care regardless of value. Indeed, more care can sometimes be harmful to patients. Hospital-acquired infections and medical errors are among the most common causes of preventable deaths and injuries in U.S. hospitals. Medical errors accounted for 238,000 preventable deaths in Medicare and cost the program $8.8 billion from 2004 to 2006. A recent study found that sepsis and pneumonia caused by hospital-acquired infections resulted in 48,000 deaths in 2006 and cost the program $8.1 billion.
Conclusion
The Massachusetts health reform law is a success story from every perspective. The state has expanded health coverage to almost all of its residents, maintained a strong market for employer-sponsored health insurance, gained the support of the business community and the public, and is moving forward in containing costs. We can look forward to a similar positive experience across the nation as we implement the Affordable Care Act modeled in large part on the Massachusetts law.
By: Nichole Cafarella and Tony Clark, Center for American Progress, April 13, 2011
State Budget Crises And The New Language of Deceit
For most of history, we had undebatable definitions of words such as “bailout” and “bankruptcy.” We understood the former as an undeserved public grant, and the latter as an inability to pay existing bills. Whatever your particular beliefs about these concepts, their meanings were at least agreed upon.
Sadly, that’s not the case during a deficit crisis that is seeing language redefined on ideological terms.
“Bailout” was the first word thrown into the Orwellian fire. As some lawmakers recently proposed replenishing depleted state coffers with federal dollars, the American Conservative Union urged Congress to oppose states “seek(ing) a bailout” from the feds. Now, Rep. Paul Ryan, R-Wis., says, “Should taxpayers in Indiana who have paid their bills on time, who have done their job fiscally be bailing out Californians who haven’t? No.”
Ryan, mind you, voted for 2008’s TARP program — a bank bailout in the purest sense of the term. But one lawmaker’s rank hypocrisy is less significant than how the word “bailout” is being used — and abused. Suddenly, the term suggests that federal aid would force taxpayers in allegedly “fiscally responsible” Republican states to underwrite taxpayers in supposedly irresponsible Democratic ones.
Aside from stoking a detestable interstate enmity, this thesis ignores the fact that state-to-state wealth transfers are already happening. According to the Tax Foundation, most Republican-voting states receive more in federal funding than they pay in federal taxes, while most Democratic-voting states receive less federal money than they pay in federal taxes.
That means traditionally blue states like California are now perpetually subsidizing — or in Ryan’s parlance, “bailing out” — traditionally red states like Indiana. Thus, federal aid to states could actually reduce the state-to-state subsidies conservatives say they oppose.
Congressional Republicans will undoubtedly ignore these facts. Their proposed solution to the budget emergency could instead be a Newt Gingrich-backed initiative letting states default on outstanding obligations by declaring bankruptcy. Again, the word is fraught with new connotations.
Whereas sick or laid-off individuals occasionally claim a genuine inability to repay debts and thus a need for bankruptcy protections, states can never legitimately claim such a need because they are never actually “bankrupt.” Why? Because they always posses the power to raise revenue. The power is called taxation — and destroying that authority is what the new bankruptcy idea is really about. It would let states avoid tax increases on the wealthy, renege on contractual promises to public employees and destroy the country’s creditworthiness.
Blocking state “bailouts” and letting states declare “bankruptcy” are radical notions, especially in a bad economy. One would result in recession-exacerbating public layoffs; the other would institutionalize an anti-tax zealotry that destroys tomorrow’s middle class in order to protect today’s rich. That’s why advocates of these ideas have resorted to manipulating language. They know the only way to make such extremism a reality is to distort the vernacular — and if we aren’t cognizant of their scheme, they will succeed.
By: David Sirota, Creators.com, Originally Published 3/4/11
The Affordable Care Act, One Year Later
A year ago this week, Capitol Hill was full of noise as the House of Representatives debated, and then voted, on the Affordable Care Act. But one of the most vivid memories of that experience for me was an extended moment of silence.
It came very late on Sunday evening–after the floor speeches, the votes, and the press conferences had ended. The galleries had long since emptied and the Capitol building itself was virtually unoccupied, so that it was possible to walk the entire length of the building, on the ground floor hallway that stretches from the House all the way to the Senate, without hearing so much as a single conversation.
It felt more than silent. It felt peaceful and, yes, satisfying. A prolonged, difficult debate had finally ended. It was time to move on.
Except that we haven’t moved on. We are still having arguments about health care reform. In fact, we are still having the same arguments about health care reform. The Affordable Care Act is law of the land now, yes, but its critics are determined to change that. And while the prospects of repealing it legislatively remain relatively slim, the prospects of repealing at least part of it judicially seem far more realistic than they did in the spring of 2010.
So perhaps it is worth taking a step back, just for a moment, and remembering how we got to this point–why this debate started in the first place and why it led to the enactment of this law.
It’s really not that complicated. Around one-fifth of the non-elderly population, or somewhere in the neighborhood of 50 million people, have no health insurance. Many millions more have insurance with major gaps or limitations, leaving them at risk of financial or medical catastrophe. Notwithstanding legitimate debates over exactly how many people go bankrupt or suffer physical hardship because they can’t pay their medical bills, virtually nobody denies that the human toll is real and significant.
These problems are the product, in part, a dysfunctional health insurance system that evolved haphazardly during the 20th Century. They also the product of a medical system as inefficient as it is costly. The United States pays more–far, far more–for health care than any other developed nation. But the care does not seem to be better overall, to say nothing of the fact that it is patently less available.
The goal of reform was really two-fold: In the short term, to make sure everybody can afford to pay for medical bills without financial distress; it the long term, to make the health care system as a whole more efficient, so that it no longer applied such a crushing financial burden on society. A single-payer system, like the ones in France or Taiwan, would have accomplished this. So would a scheme that turned health insurance into a regulated utility, as the Dutch and Swiss governments have done.
Political compromises, dating back to the earliest days of the 2008 presidential campaign, left the U.S. with a second-best–or, more accurately, a third- or fourth-best solution. It bolsters two existing insurance arrangements: Employer-sponsored coverage for workers in most companies, Medicaid for the very poor. It creates a new, regulated marketplace–insurance “exchanges”–for everybody else. Then, through a combination of tax changes and alterations to Medicare, it tries to reengineer medical care itself, wringing out administrative waste and focusing resources on the treatments, and care styles, that provide the most bang for the buck.
It’s easy to find the flaws–and to figure out who’s responsible for them. Doctors, hospitals, drug manufacturers, and device makers fought changes in the delivery of medical care that might affect their incomes; unions lobbied against tax reforms designed to discourage overly generous insurance; everyday Americans resisted changes to plans they already had. All of this blunted the Affordable Care Act’s efforts at cost control, which explains why, ten years from now, the best projections suggest we’ll have spent roughly as much on health care–as a government and as a country–as we would have if the law never passed.
At the same time, political conservatives fought to limit the bill’s expanse, demanding that the new outlays not exceed a $1 trillion, give or take. They had extra power, thanks to the filibuster, and were able to make the demand stick. As a result, the expansion of insurance coverage–via Medicaid and subsidies for private insurance–will not begin until 2014. Even then, somewhere around 20 million people, or 8 percent of the total population, will remain uninsured. And for some of the insured, the coverage will remain meager.
But the law’s shortcomings should not tarnish its many virtues. Eight percent uninsured means 92 percent insured, or around 95 of residents here legally. Or, to put it another way, more than 30 million additional people will have health insurance because of this law. The coverage, if not always as generous as it should be, will be enough to keep many if not most of the newly insured out of bankruptcy–and it will be available to almost everybody, regardless of pre-existing condition or insurance status.
The cost picture is also encouraging. The official projections suggest that, as of 2021, government spending (and, apparently, the country’s total spending) on health care will not be rising as fast as it is now. This is the critical distinction, because it’s the long-term burden of health care that threatens to bankrupt us. Critics doubt that officials will enforce planned changes to health care financing, but today’s lawmakers have no way to force action by their counterparts in the future. All they can do is put laws on the books–and that’s what they have done.
Are there better alternatives? Of course. But the loudest critics of the law, from the right, don’t have them. For all of their screaming, they have yet to put forward a credible plan that can do as much, let alone more, for less money. Their plans, stripped of misleading rhetoric, generally involve covering far fewer people, dramatically reducing the coverage that people have, or some combination of the two. Their dispute is not with the means Democrats have used to make health care affordable to all. It’s with the goal itself.
No, the way to improve the law is to build upon it–to bolster the insurance coverage, reach those Americans the law as written will not reach, and to strengthen the experiments in cost control that work. The best analysis of the law remains the one Senator Tom Harkin gave: The Affordable Care Act is not a mansion. It’s a starter home. But it’s got a solid foundation, a sturdy roof, and room for expansion.
A year from now, the presidential campaign will be well underway and the debate about the Affordable Care Act will likely be, if anything, more acrimonious than it is now. But perhaps after the election and, hopefully, after 2014, the country really will move on.
By: Jonathan Cohn, The New Republic, March 23, 2022
Size Matters: The GOP & Health Care
During the health care debate in 2009 and 2010, a serious issue emerged — the number of pages in congressional bills. I’m not kidding. The Republicans wanted short bills, and the health care reform bill was way, way too long (proving that it did too much and would end civilization as we know it). There was outrage across the country. Angry opponents of reform went to congressional town hall meetings brandishing huge stacks of paper. Then Minority Leader Boehner, foreshadowing his leadership priorities today, used a nationally televised address to condemn the length of the health care bill three times in as many minutes.
The extremists went wild. Rumors swept across the land. Some Tea Party types claimed the bill was 10,000 pages. Slate called the explosive stack-of-paper obsession “peculiar.” Ultimately, the New York Times set the record straight: “In the original version,” the Times said, “H.R. 3590 as passed by the Senate on Dec. 24, 2009, ran to some 2,400 pages, although with a very large font, triple spacing and huge left and right margins.” The newspaper went on to explain that, “With normal margins the document probably would shrink to about 500 pages or so.” Which meant the bill was not really that long when compared to other major bills, such as the financial reform law and past budget deals.
In the November mid-term elections, the Republicans ran on a platform of change, and change is what we got. Not only will the House Republicans vote to repeal the new health care law this week, they’re going to do so with a bill that’s only two pages long.
This is a triumph of conciseness, a 247-word beacon of brevity. The low word-count works especially well for the GOP, given the party’s unfinished “repeal and replace” campaign pledge. The Republicans addressed repeal, but they haven’t quite gotten to the “replace” part. That, we’re told, is a work in progress, and the question is being referred to various House committees to kick around for months.
In Sunday’s Washington Post, reporter Amy Goldstein noted that the Republican repeal vote is “the prelude to a two-pronged strategy that is likely to last throughout the year, or longer.” Great. Just what we need — another interminable debate on health care when the Republicans ought to be focusing on bipartisan solutions to create jobs. Rep. Fred Upton (R-Mich.), the new House Energy and Commerce Committee chairman, said it “may take time” for the GOP to develop a health care plan. Upton, who has been in Congress since 1987, has had only 24 years to come up with some health care ideas of his own. Instead, he hired Julie Goon, the former top lobbyist for the health insurance industry’s biggest trade group, as his special adviser.
I’m not sure what the Republican “replace” plan is (or how many pages it will be), but I know their two-page repeal bill is a bad deal for America’s families, seniors and small businesses.
The Republican repeal bill will take away dozens of benefits and important consumer protections that are making a real difference in peoples’ lives right now. When the Republicans vote for repeal, they’ll be taking away people’s newly won freedom from fear of insurers denying their care, dropping them when their sick and imposing double-digit premium hikes with impunity. They’ll be booting young adults off their parents’ health plans. They’ll be telling seniors they have to pay back the $250 donut hole checks they received to help buy prescription medications and give up their new 50% discount on brand-name drugs. The Republican repeal plan will force nearly 900,000 American families a year into bankruptcy because of huge medical bills. And it will take job-creating tax credits away from small businesses.
Speaker John Boehner and the Republicans don’t want the public to know the truth about the Affordable Care Act and what their repeal plan will take away from America’s consumers. And you can bet the debate about repeal will be filled with misleading information from Boehner and the new Republican majority. To help folks see beyond the rhetoric, Health Care for America Now made a chart that tells the truth. You can read and download a printable, high-resolution version with citations here and below.
The Republican Repeal Bill puts insurance companies back in charge of your health care.
The Republican Repeal Bill
Be Careful What You Wish For: Repeal of the Affordable Care Act Would Be Harmful to Society and Costly for Our Country
The new Republican leadership of the House of Representatives says repeal of the recently enacted Patient Protection and Affordable Care Act is their top priority. The Republicans pushing for repeal, however, conveniently ignore the enormous step backward that repeal would represent for health care in our country, for the income security of our citizens, and for the fiscal health of our government.
The Affordable Care Act is not just a law designed to cover the majority of our nation’s uninsured, moving us into the league of industrialized nations which guarantee universal health coverage for its citizens. The law also takes the crucial first steps toward reining in our runaway health care costs. It ends discriminatory insurance practices that leave many of our citizens one bad gene, or badly timed accident, away from personal bankruptcy. It does so while introducing insurance market competition that will lead to lower health insurance premiums for some, and better coverage for others, in the so-called nongroup insurance market where workers without employer-provided health insurance turn for coverage. The Affordable Care Act does all this while significantly reducing our enormous federal budget deficit over the next 10 years.
Opponents of the new health reform law claim we can have many of the beneficial features documented above while repealing the parts they don’t like. This is a misleading and dangerous assertion. In fact, virtually none of the accomplishments of the new law are possible without the entire law’s infrastructure coming into place. That’s why all of the harms of repeal documented in this issue brief below will take place if the new law were to be scuttled.
To understand the consequences of repealing the Affordable Care Act, we can turn to two sources of objective information. The first is the careful and comprehensive effort put in by the Congressional Budget Office to evaluate the law’s impacts, including their recent report summarizing the effects of repealing the new law. The second is the closest case study we have where major elements of the new federal law are already in place—the state of Massachusetts, which passed a similar reform in early 2006. So let’s now turn to the different harms repeal of the health reform would deliver up to the American people.
Repeal means more uninsured, and worse public health
The first noticeable feature of a world without the new health reform law would be the much higher share of Americans without health insurance coverage. Absent the Affordable Care Act, CBO projects that 54 million people in our country, or almost 20 percent of our nonelderly population, will be uninsured by 2019. The new law will cover 32 million of those uninsured, according to CBO, or about 60 percent, with much of the remainder undocumented immigrants who are ineligible for coverage. This is more than a projection: It is also the same percentage share of the uninsured in Massachusetts who have been covered by that state’s health reform effort.
Clearly, repeal of the new law would have enormous negative consequences for our nation’s public health. Numerous studies document the dire health implications of uninsurance. An earlier study by the Institute of Medicine estimated that, in the year 2000 (when 38 million persons were uninsured), there were 18,000 deaths per year due to uninsurance. This suggests that repealing the Affordable Care Act could lead to 15,000 more deaths per year due to higher lack of insurance.
Repeal means increased financial risk for U.S. households alongside distorted labor markets
The impact of repeal extends well beyond those households who are uninsured. Indeed, repealing the new law would reach any household who faces the risk of losing their employer-sponsored health insurance. This is because the Affordable Care Act will fix the fundamental broken system of nongroup insurance in the United States.
Currently, individuals who do not have access to employer-provided group insurance coverage face a nongroup insurance market that is discriminatory and expensive. In most states individuals can be denied insurance coverage because they are ill or have their pre-existing illnesses excluded from coverage. Individuals who become ill can face personal bankruptcy as a result. Even when nongroup insurance is available, in most states insurance is priced according to individual health, with the oldest and sickest enrollees paying many multiples of younger and healthier enrollees.
There is a fundamental unfairness to a system under which individuals can face financial ruin because they have the wrong genes, or cross the street at the wrong time, but don’t happen to have access to insurance through their employer. Moreover, such a system significantly distorts our labor markets by forcing individuals to stay in jobs that offer health insurance rather than to move to newer and more productive positions where coverage is not available. Millions of U.S. workers are not moving to better jobs for them or starting new businesses because there is nowhere to turn for insurance coverage should they leave their jobs.
The Affordable Care Act would fix this flaw in our system. Insurance companies would no longer be allowed to price discriminate or deny coverage based on health or pre-existing conditions, and price differentials by age would be lowered. Individuals would be free to move to the job of their choice or to become entrepreneurs without fear of facing uninsurance.
Repealing the new health reform law would leave us in a world of broken nongroup insurance markets, with the attendant financial risk for individuals and the continued distortion to our labor markets. Why? Because without the comprehensive framework of the new law, it is incredibly costly to make insurance fairer in nongroup markets.
If insurance companies must charge the same price to people whether they’re sick or healthy, for example, then many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices because only the sick would buy insurance, chasing even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms in their non-group markets over the past two decades, and the results were sharp rises in insurance prices and rapidly shrinking market size. The only way to make insurance market reform feasible is to pair it with large subsidies to purchase insurance and an individual requirement for coverage, as is the case with the Affordable Care Act.
Direct evidence for this point comes from Massachusetts. In the late 1990s the state moved to a nondiscriminatory nongroup market, but without the subsidies and the individual requirement that are central to the Affordable Care Act. The result was a collapse of the state’s nongroup market, so that by 2006 the state had by far the highest nongroup premiums in the nation. In 2006, the state implemented their comprehensive reform, which added to the insurance market reforms extensive low-income subsidies to purchase insurance and an individual requirement for coverage. This resulted in a 40 percent reduction in nongroup premiums in Massachusetts over a period where such premiums were rising by 14 percent nationally. That’s just one reason why the new law is called the Affordable Care Act.
Repeal means a noncompetitive and expensive nongroup insurance market
Another reason the Affordable Care Act works to bring down costs is because without it, a typical health insurance policy is much more expensive in the nongroup market than in the group market, partly because nongroup insurance markets are less competitive than group insurance markets in many states. There is no common marketplace where individuals can compare the prices of all the options that are available to them in the nongroup market. As a result, existing market participants keep prices high and new firms are unable to promote lower costs as a tool of market entry.
The Affordable Care Act addresses this problem in two important ways. The first is by introducing competitive insurance exchanges in every state. Individuals would be able to shop more effectively, comparing their nongroup options in a competitive and transparent environment. This approach has already had a notable success in Massachusetts, where the introduction of the state’s Connector health insurance exchange expanded the use of nongroup insurance and promoted the entry of a major new low-cost insurer into the state’s nongroup insurance market.
Without the Affordable Care Act states are unlikely to be able to establish transformative and competitive exchanges for the purchase of nongroup insurance. Many states have tried over the past 20 years to establish insurance exchanges and they have virtually all either failed or had little impact. This is typically because insurers were afraid that individuals would choose to buy from the exchanges only if they were sick, which meant prices in the exchange were high and demand for exchange products was low. With low demand, exchanges could not establish the economies of scale necessary for success.
The success of exchanges under the new health reform law will be due to the fact that individuals will be both required to purchase insurance and that insurance purchase will be subsidized only through the exchange. This will promote exchanges on a scale necessary to succeed in promoting competition in state insurance markets.
The second way that the Affordable Care Act addresses the high costs of nongroup insurance is through the introduction of new tax credits to make health insurance affordable through the exchange. The typical middle-class family in the United States would now be provided financial support to ensure that they would not have to spend an unfair amount for the insurance they need to protect their family.
The upshot: Repealing the new law would mean returning to an era where individuals can’t effectively compare their insurance options, guaranteeing continued noncompetitive and expensive insurance in this market. And it would mean that individuals would face the full prices in these noncompetitive markets without the necessary tax credits to make insurance affordable. Repeal, in short, would be unfair, ineffective, inefficient, and costly.
Repeal means free riders would continue to exploit the health care system
Another fundamental flaw in our current health care system before passage of the Affordable Care Act was that individuals could “free ride,” remaining uninsured until they need care and then turning to emergency rooms. Emergency rooms are required by law to provide care to all regardless of insurance coverage. The associated uncompensated care costs of treating these individuals amount to a more than $40 billion a year tax on the insured in the United States
The Affordable Care Act ends this free riding by requiring that individuals purchase insurance if it is affordable for them (which it will be for most due to the subsidies described earlier). This personal responsibility requirement, originally the brainchild of Republican experts, would end the unfairness of a system where emergency room health care providers are required to treat everyone but individuals are not in turn required to pay their fair share of the costs of treatment. Repealing the new law would mean returning to a world where individuals can simply wait until they are sick to get treated, passing the costs on to the rest of society that is paying their share.
Repeal means the continued decline of private insurance
There was an enormous erosion of private insurance coverage in the United States over the past decade. Employer-sponsored insurance fell by 15 percent and nongroup insurance has not grown to keep pace. The result today is an increase in both the ranks of the uninsured and the publicly insured.
The Affordable Care Act arrests this decline and promotes private insurance coverage. According to the CBO, the new law will lead to a small erosion in employersponsored insurance coverage, offset by a rise in nongroup insurance coverage that is almost five times as large. Overall, private insurance coverage in the United States will rise by 15 million people due to the Affordable Care Act.
Repeal would provide no cushion for our citizens to offset this rapid decline in employer-sponsored insurance coverage. Fifteen million fewer U.S. residents would have private insurance than without the law. The Affordable Care Act is not a government takeover of the U.S. health system; it is a means of using reformed private nongroup insurance markets to more effectively fight the steady decline in employer-provided group insurance. Repeal means a fundamental retreat from the promise of private health insurance coverage for our citizens.
Repeal means higher and more rapidly growing budget deficits
The Affordable Care Act delivers a unique dose of fiscal responsibility in an era of rapidly growing federal budget deficits. The new law offsets its new spending with even larger reductions in other spending and revenue increases. As a result, CBO estimates that the legislation will reduce the deficit by more than $100 billion by 2019, and by more than $1 trillion in the decade after that.
What is not widely appreciated is that deficit reduction due to the new health law will rise over time. The cuts in excessive spending and increases in revenues are back-loaded, not front-loaded as with so many other recent pieces of legislation. This is illustrated by the fact that the most recent CBO estimate shows that repeal would raise the deficit by $230 billion over the next decade. And, because the net budget savings from the new health law will grow over time, repeal would raise the deficit by much larger and ever growing amounts into the future.
Repeal would therefore mean undoing the enormous fiscal benefits of this legislation. Offsetting a more than $100 billion hole in the budget deficit by 2019 would require significant cuts elsewhere in the budget or other increases in revenues. And it seems highly unlikely that Congress would enact spending or revenue changes that would increase so rapidly over time. That means even fixes that offset the short-term costs of repealing the new law would not address the enormous long-term hole it would leave in our budget.
Repeal means a critical step backward on cost control
Reforming insurance markets and covering the uninsured are actually the relatively easy lifts for the new health reform law when compared to the more daunting and fundamental challenge—reducing the rate of growth in health care costs, which threatens to bankrupt our government and our nation. U.S. spending on health care is very high and a source of great concern but it is the growth rate of medical spending, not its level, that ultimately determines our country’s financial well-being. Absent the Affordable Care Act, if current trends persist we will be spending an unsustainable 38 percent of our GDP on health care by 2075 because the growth of health care costs would continue to outstrip the growth rate of the overall economy.
Addressing the rapidly rising costs of medical care, however, faces two daunting barriers. The first is scientific: There is tremendous uncertainty about how to lower health care costs without sacrificing health care quality. There is a broad consensus that there is significant waste in our health care system. But there is little consensus about the best way to address that waste without risking the enormous gains in population health due to health care improvements in recent decades. The second barrier is political: There are major entrenched interests that are threatened by fundamental health care reform and who will strongly oppose any such efforts.
In the face of these barriers, our political process has found it difficult to make progress on significant cost-control efforts over the past several decades. The Affordable Care Act represents the most important step forward in cost control in at least 30 years. The new law pursues many different approaches toward cost control, studying them to see which ones work best. This is through provisions that:
- Reduce consumer demand for excessive medical care through the “Cadillac tax” on high-cost insurance plans.
- Reduce health care provider payments by appointing a depoliticized board to make up-or-down recommendations to Congress on changes to Medicare’s provider payments.
- Set up dozens of health care pilot programs to test various approaches to revamping provider-payment incentives and organizational structure.
- Invest hundreds of millions of dollars in new comparative-effectiveness research.
- Launch pilot programs to assess the impact of various reorganizations of the medical malpractice process.
None of these approaches is guaranteed to work but together they represent a significant step toward fundamental cost control.
Importantly, they represent steps that are unlikely to happen if the Affordable Care Act is repealed. None of these ideas are new; most have been around for decades. But it was through the overall push for health reform that Congress was able to finally put them in place. Absent such a unifying framework, the barriers which have blocked cost-control efforts in the past will continue to stand in the way of moving forward on cost-control efforts.
Bottom line: Repeal is a dramatic step backward
The debate over repeal of the Affordable Care Act is characterized by enormous misinformation and confusion. Opponents of the legislation exploit this for political gains. A legitimate debate over the Affordable Care Act and the future of health care in America must recognize the fundamental improvements to our health care system put in place by this new law. Repealing would lead to:
- A society with poorer health and ultimately more deaths from lack of medical care
- A continued unfair and expensive nongroup insurance market that leads to economic instability, medical bankruptcy, and a less efficient job market where individuals are afraid to move to more productive job opportunities
- Continued free riding by those who pass billions of dollars in care costs onto the insured
- A massive decline in private insurance coverage
- Huge and unsustainable increases in budget deficits reaching trillions of dollars over coming decades
- A fundamental step backward in our efforts to control the health care costs which threaten to bankrupt our society
The Patient Protection and Affordable Care Act is aptly named. Repeal would mean less health care protection for more and more Americans at higher and higher costs to themselves, their families, and our nation. We simply cannot afford to repeal the new law.
By: Jonathan Gruber, Professor of Health Economics at the Massachusetts Institute of Technology and a member of the Massachusetts Health Connector Authority: January 19, 2011
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 
You must be logged in to post a comment.