WHEN the ball came down in Times Square to herald the arrival of 2014 it also signalled a new era of health insurance in the United States, bringing cover to thirty-two million Americans and increasing the affordability of healthcare for millions more. These are the most significant changes in the US healthcare system since the introduction in 1965 of Medicare, the federal program for the elderly, and Medicaid, the federal-state program for the poor and disabled. They are changes many thought would never arrive, and many others hoped never to see. Indeed, a substantial cadre, headed by congressional Republicans and Republican state governors, has worked relentlessly to try to ensure that would be the case.
But despite all the odds – over fifty congressional attempts to repeal the act, a Supreme Court challenge, mischievous opposition from conservatives and fearful opposition from misinformed citizens, a botched roll-out of enrolment processes, and even a last-minute temporary stay of the contraceptive mandate – the new system came into being at midnight on 1 January.
Providing Americans with affordable health insurance was the key provision of the Affordable Care Act, or ACA (also known colloquially as Obamacare), and now, almost four years after its legislative enactment, this concept – albeit imperfectly delivered – is the law of the land. The discriminatory practices used by the insurance industry for many years – excluding people on the basis of pre-existing conditions, for example, and charging women more than men – are gone. The economic viability of the system is preserved by new mandates requiring everyone with incomes above 138 per cent of the poverty line to purchase health insurance, offsetting the cost burden of the sick with the premiums of the healthy.
For those whose incomes fall below this level, the ACA expanded Medicaid and provided funds to the states to cover the extra outlays. In mid 2012, though, the Supreme Court ruled that the Obama administration could not compel states to expand their Medicaid services, and despite the fact that their budgets will suffer, a significant number of Republican states have chosen to take advantage of the ruling.
But around half – twenty-five states and the District of Columbia – will provide access to Medicaid for individuals making less than $15,856 a year or a family of four earning under $32,499 (in 2013 US dollars). The newly eligible come from many strata of society: homeless people, former inmates, low-paid workers, recent college graduates, retirees not yet old enough for Medicare, and the unemployed. In the states that rejected the expansion, Medicaid remains limited to those children, pregnant women, parents, disabled and elderly who are poor, although the treatment of savings and retirement accounts and other assets in assessing eligibility will change.
Because Americans get their health insurance from a variety of sources, it’s impossible to know how many of the thirty-two million beneficiaries of the new arrangements had gained cover by 1 January. The Obama administration says that at least six million people have signed up for either private insurance or Medicaid since the enrolment period opened on 1 October. But some of these people had insurance before 1 January and simply transitioned into a new healthcare plan that is compliant with the provisions of the law.
Some 2.1 million people have purchased new health insurance plans through the state exchanges or the federal HealthCare.gov website, well below the end-of-December target of three million. The secretary of health and human services, Kathleen Sebelius, was unable to say how many of these enrollees had paid their first premium to ensure their policies took effect on New Year’s Day. Another 3.9 million people have new coverage through the expansion of Medicaid and the Children’s Health Insurance Program.
The Congressional Budget Office has estimated that seven million will sign up for private plans through the federal and state exchanges by 31 March and another nine million will enrol in the expanded Medicaid program. Considerable work clearly needs to be done if these targets are to be achieved. Previous insurance expansions, including Part D of Medicare and the Children’s Health Insurance Program, experienced an early lag in enrolments, which then climbed steadily over time.
The botched rollout of the federal HealthCare.gov website and some of the online state health insurance exchanges was a major setback for the enrolment processes. This raised great ire from the media and disingenuous Republicans, but it hasn’t deterred people from persisting in their efforts to get health insurance. Social media is full of stories from people delighted at finally having health insurance or finding that their premiums are dramatically lower.
Republicans have made much of stories of people who have received insurance cancellation notices because their policies did not meet the law’s stricter standards – an issue they have not raised when health insurance funds have arbitrarily withdrawn policies to force the purchase of more expensive ones. The optics are not good for the Democrats, and especially not for Barack Obama, who had promised voters that “if you like your current policy you can keep it.”
The partisan attacks may be overblown, though. According to one estimate, of the 4.7 million people whose insurance was reportedly cancelled, only 10,000, or 0.2 per cent, will wind up with no access to an affordable insurance alternative. The White House recently announced that insurers could extend for one more year their plans that were slated for termination. It will be interesting to see how many people choose this option, given that these plans are now labelled as seriously flawed and biased against consumers.
AS PEOPLE begin to use their new health insurance, the killer question is – will it work? Or more accurately – will it work in ways that are acceptable to Americans?
With insurers restricting doctor access in order to hold down premium prices, many of the new plans offer relatively limited healthcare networks. Some people will find that the doctor they want isn’t in the network. Provider choices are also likely to be narrow for those on Medicaid because many practices will choose not to accept the lower reimbursement rates they bring. The reality is that having a health plan won’t guarantee easy access to a primary care doctor, dentist or mental health professional.
The Health Resources and Services Administration, the federal agency charged with improving access to healthcare, has found that nearly 20 per cent of Americans live in areas that suffer from a substantial shortage of primary care doctors. This problem was highlighted by research released last week showing that since Oregon expanded its Medicaid program five years ago, the use of emergency departments for routine care has increased among the newly insured.
One explanation is that busy primary care doctors, facing an increased patient load, refer some of their more urgent cases to hospitals – hardly a desirable outcome. The more optimistic view is that the ACA’s new models of primary care delivery, such as the medical home and the nurse-managed health centre, will ensure that patients receive preventive services and early interventions while reducing the demand for more doctors.
A second challenge for the new system is posed by young, healthy people who are inexpensive to insure (the so-called “young invincibles”). Unless this group sees insurance as an attractive option and contributes to the pool of insurance funds, economic pressures could drive up premiums and/or co-payments for other demographic groups or simply force plans out of the marketplace. Americans are not likely to embrace the concept of community rating or the idea that healthy people might face higher premiums in order to ensure that heavy users of the healthcare system can have access to affordable care. But they may well buy the counter arguments: that insurance protects against the unexpected and that, ultimately, many healthy people will become sick.
Again, it will be March before the data are in and the trends are obvious. If enrolment increases throughout 2014 as technical problems are overcome and outreach efforts take effect, and as the mix of insured households increases accordingly, competitive pressures are likely to dissuade insurers from ratcheting up premiums.
Other unknowns lie in the massive transformation of Medicaid from a stigmatised safety-net program for the most vulnerable to an expanded and reshaped program covering a wider array of people. On average, these people will be sicker than those signing up for private health insurance, so it will be important that Medicaid rates are sufficiently high to be accepted by most providers.
Because it is a proxy for the broader debate over the role and responsibilities of government in the provision of healthcare, Medicaid remains a political lightening rod. It’s hard for President Obama to tout success in this area because it will revive right-wing fears that Obamacare is really a Trojan horse for a plan to create a single-payer, government-run healthcare system.
THE continuing rollout of the ACA has delivered much more than health insurance. It has seen a slowdown in healthcare costs; millions of patients are now able to receive no-cost preventive care; mental health and substance abuse services have received a huge boost and been better integrated into healthcare services; scores of innovative new ways to deliver and pay for healthcare are being trialled; health disparities are increasingly being targeted; and public health and prevention efforts are coordinated across government.
But it’s too soon to stage any version of “Mission Accomplished.” Repeal of Obamacare remains on the agenda of congressional Republicans, and the Supreme Court will hear two cases about the law’s requirement that employers cover birth control and other reproductive health services. The bureaucratic red tape, delays and lack of resources that contributed to the problems with the enrolment processes must be sorted out in the face of continuing budget pressures. And, late in 2014, health insurers will announce premiums for 2015. These will inevitably be higher, inflicting a political price on Democrats.
On the other hand, as Medicaid expands, hospitals, cities and counties and other interest groups in non-expansion states will be asking hard questions about why their states are not benefiting. Pressure of this kind will help extend cover to the many millions of people who remain uninsured. And as more Americans pay directly for more of their healthcare, expect them to demand price transparency and discounts, helping to lower America’s outrageous healthcare costs.
A recent Gallup poll showed that Americans see Obamacare as both President Obama’s greatest achievement to date and his biggest failure, underscoring the controversial nature of the law that will define his legacy. It will be many years before the changes that started on 1 January can be seen to deliver better health outcomes for all Americans. What is required in the immediate future is that millions of Americans enter the system with relative ease and moderate costs, that the system itself can cope and does not break under the strain, and that the ACA lives up to the president’s sales pitch.
The ACA doesn’t need to be perfect, but it does need to be good enough by the mid-term elections in November that it will be hard for the Republicans to justify their obstructionist tactics and unrelenting assault. •