The League of Women Voters is a nonpartisan political organization encouraging the informed and active participation of citizens in government. It influences public policy through education and advocacy.
OVERVIEW: COMPARISON OF THE ACA AND THE AHA
JUNE 15, 2017
VALERIE ELLIEN, PH.D
LWV- Position on Health Care
What Prevention Elements are Necessary for aRead the entire report in the Healthcare Reform section...
Complete Arizona Health Care Plan
By Lois Brechner, Second Vice President,
LWV of Northwest Maricopa County
The Affordable Care Act (ACA), commonly referred to as Obamacare, was enacted by Congress in 2010. How has it succeeded? How has it failed? What do we still not know? Can it be improved? The present law is broad and complex with many goals and even more provisions. This paper will deal with its major achievements, its biggest disappointments, questions not yet answered, and suggestions for making needed changes.
SUCCESSES: According to the Census Bureau, over twenty million more people now have health insurance. Recently, the both the Census Bureau and a Gallop Poll reported that the number of uninsured Americans dropped from 13.3% of the population to 9.1%. (1) Many of these newly insured Americans could not have afforded insurance before the ACA or would have been refused insurance because of a preexisting health condition. Under the ACA, health insurance is subsidized for those with low and middle incomes. Young people up to age 26 became eligible to remain covered through their parents. In addition, states who opted for government subsidy to expand Medicaid coverage under the ACA, were able to provide health insurance for more people without additional costs. Studies have found that Americans have become less vulnerable to financial shocks related to health issues. Fewer people could not pay their medical bills or avoided getting medical care because of its cost. Medical debt and bills in collections have definitely declined. Prior to the ACA, a large percentage of bankruptcies were cause by catastrophic medical costs. The ACA required insurers to provide more comprehensive health coverage. Policies now cover services like maternity care and treatment for drug addiction with no annual cap in payments. Patients have increased access to mental health counseling, contraception, and cancer screenings. The ACA contains a mix of new spending and taxes, which, along with cuts to the federal Medicare program, should save us more than it costs. The Congressional Budget Office estimates that if the present law continues, it will save federal dollars, thus lowering the federal deficit, through at least 2025. Even with small changes to tax provisions under the law, an analysis by the Committee for a Responsible Federal Budget, ran the numbers and corroborated the Congressional Budget Office findings. (2)
FAILURES: The insurance marketplaces and Medicaid expansion are a good deal for people near the poverty line. However, for many of those with higher earnings which make them ineligible for subsidies, premiums are high and can cause a financial hardship, and deductibles are often much higher than those seen in typical employer-provided health plans. Many healthy young Americans are paying fines instead of enrolling in the ACA. Without enough younger, more healthy enrollees, the pool opting for the ACA is older, sicker, and less predictable in regard to health care needs. Therefore, insurers say they are forced to raise costs significantly or pull out of the ACA market. Even though insurance through the ACA is easier to shop for than when it was first enacted, it still remains quite complicated. Selecting the right health plan is often frustrating or, in some cases, impossible for too many Americans who are unsure of their health needs and/or are unable to understand jargon, such as "out-of-pocket maximum" or "in-network provider." Patients, once insured, still often struggle to use their policies and can be hit with surprise bills and long negotiations with their carriers. In addition, in some parts of the United States, enrollees have only one or very limited insurers. The remaining insurance companies have also been shifting around their offerings each year. The number of doctors or hospitals available through their plans are becoming more limited. Therefore, enrollees find it necessary to change health plans, doctors, hospitals, etc. annually in order to find an affordable policy. (2) QUESTIONS NOT YET ANSWERED: It would probably take many more years before we can determine if the ACA is making Americans healthier. There is some encouraging, but too early evidence, that low-income people in two states with expanded Medicaid have reported improving overall health compared with neighboring states that declined Medicaid expansion. Research has indicated that more low-income Americans have visited a doctor and received basic preventive health services, including prescription contraceptives and treatments for diabetes. Twenty million people, however, is a small fraction of the nation's population, and it will most likely take years to determine measurable results. There is no truly definitive evidence that the ACA has been the reason for the slowing of health spending. It is hard to separate the effects of the health law from forces like the great recession, rising insurance deductibles, and a slowdown in the development of new medical technologies. That is another area that would most likely take years to determine. Did the health law make medical care safer and more evidence-based? Have hospitals improved the quality of care due to the ACA? The law has contained many provisions to improve care received in hospitals. Whereas the health system is still too often a dangerous place for patients, fewer patients are contacting infections in hospitals, and fewer patients are leaving the hospital only to be readmitted within a few weeks. There is not definitive proof that these improvements are directly related to the ACA. Some trends were beginning before the passage of the health care act and, possibly, might have happened anyway. Certainly, requiring safety improvements and more oversight should prove beneficial and bring about continued progress. (2) SUGGESTIONS FOR FIXING THE AFFORDABLE CARE ACT: The ACA marketplaces can only be successful if enough insurers participate. We must draw insurers into the markets, keep them there, and limit premium growth. One way that success can be achieved is by subsidizing plans more and by limiting their risk of loss. Medicare+Choice, now Medicare Advantage, in the early years went through similar problems to those being experienced by the ACA. The 2003 Medicare Modernization Act--passed by a Republican Congress and signed by President George W. Bush--drastically increased payments to plans, and insurers flooded the market. Although members of both parties were concerned that the plans were overpaid and wasting taxpayer resources, by 2007, every Medicare beneficiary had access to at least one plan and the market stabilized, enrollment continued to grow, costs were controlled, and one in three Medicare beneficiaries was enrolled in a private plan. Increasing the subsidization of the ACA plans similarly, might reduce costs to patients and bring in both more consumers and insurers. (3) Part D, the Medicare prescription drug program, also runs entirely through private plans. Large losses are cushioned by a risk corridor program, which allows plans to stay in the market if they miscalculated the needs of the patients they attracted. The program allows them to keep premiums lower because they do not need to hedge against the full cost of potential losses. The ACA included a risk management program and a risk corridor program for marketplace plans. However, the risk corridor program expired at the end of 2016, along with a reinsurance program that compensated insurers for unusually high-cost patients. If Congress follows the model of Part D and makes the risk corridor program and the reinsurance program permanent, it could help stabilize the market places. (4)
Summary of Risk and Market Stabilization Programs in the ACA (4) Risk Adjustment Reinsurance Risk Corridors What the program does Redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees Provides payment to plans that enroll higher-cost individuals Limits losses and gains beyond an allowable range Why it was enacted Protects against adverse selection and risk selection in the individual and small group markets, inside and outside the exchanges by spreading financial risk across the markets Protects against premium increases in the individual market by offsetting the expenses of high-cost individuals Stabilizes premiums and protects against inaccurate premium setting during initial years of the reform
Who participates Non-grandfathered individual and small group market plans, both inside and outside of the exchanges All health insurance issuers and selfinsured plans contribute funds; individual market plans subject to new market rules (both inside and outside the exchange) are eligible for payment Qualified Health Plans (QHPs), which are plans qualified to be offered on a health insurance marketplace (also called exchange)
How it works Plans' average actuarial risk will be determined based on enrollees' individual risk scores. Plans with lower actuarial risk will make payments to higher risk plans. Payments net to zero.
If an enrollee's costs exceed a certain threshold (called an attachment point), the plan is eligible for payment (up to the reinsurance cap). Payments net to zero. HHS collects funds from plans with lower than expected claims and makes payments to plans with higher than expected claims. Plans with actual claims less than 97% of target amounts pay into the program and plans with claims greater than 103% of target amounts receive funds. Payments net to zero. When it goes into effect 2014, onward (Permanent) 2014 + 2016 (Temporary + 3) years) 2014 + 2016 (Temporary + 3 years)
The original ACA allowed for a public option--a public health insurance plan that
would compete with private companies and that would work with the ACA. In
fact, the non-partisan Congressional Budget Office concluded in 2013 that a
"public option" would reduce the federal budget deficit by $158 billion through
2023. The option, however, was removed from the ACA to get private companies on board.
Putting a public option back in the ACA could fix the program by offering more options to consumers and would possibly bring down the cost of the insurance. The only real stipulation would be to make sure that the public option does not affect what private insurers offer but is attractive enough to compete with them.
There are two types of public options:
1. Weak options that just cover low income citizens or certain groups in certain areas.
2. Strong options that would roll in other subsidy programs, like Medicaid and Medicare. They could also include aspects of a voucher system and could replace a lot of the bureaucracy of assistance programs. They could also be structured to keep them attractive to businesses and upper income consumers. (1) Another suggestion would be to require insurers to participate in broad regions. This "fix" would limit the private insurers from selectively working in more profitable areas and shunning others like rural areas. (5) Expanding Medicaid has been working well in states that have opted for this coverage. Expanding it throughout the country might prove beneficial. (6) There have been suggestions to lower the age of enrollment in Medicare to 55. This change would remove the older, possibly sicker people from the ACA. Insurers would carry less risk and costs would go down. This suggestion might reduce the number of enrollees in the ACA; however, it might help stabilize Medicare. (5)
Finally, the penalty for eschewing coverage by the ACA is so low that many people are paying the fine instead of enrolling in the federal health care program. Again, copying Medicare's policy which not only includes significant penalties, but grows those penalties the longer one waits to enroll for coverage, might encourage early enrollment. (5)
CONCLUSION: Americans have made it clear that they do not want to give up their health insurance. Republicans might gain a great deal of support if they followed actions taken by the Republican Congress and President George W. Bush in 2003 to fix problems with Medicare, and work with Democrats to fix problems with the Affordable Care Act, and in doing so make America proud while lowering the deficit and the overall exorbitant cost of health care in the United States. (1) May 15,2017, Money, What is the Public Option for Health Insurance, Alicia Adamczyk (2) February 5 2017, The New York Times, Grading Obamacare, Successes, Failures and Incompletes, Margaret Sanger-Katz (3) November 14, 2016, The New York Times, Politics Aside, We Know How to Fix Obamacare, Austin Frakt (4) August 17, 2016m Kaiser Family Foundation, Explaining Health Care Reform, Risk Adjustment, Reassurance and Risk Corridors, Cynthia Cox, Ashby Semonskee, Gary Clastor and Larry Levitt (5) October 26, 2016, The New Yorker, Three Ways to Fix Obamacare, John Cassidy (6) March 30, 2017, Brookings Institution, Want to Fix Obamacare, Henry J. Aaron
League of Women Voters of Metropolitan Phoenix
July 4, 2017
On July 30th, the nation will celebrate the 52nd anniversary of the Medicare program, which serves 46 million seniors and 9 million disabled Americans. Prior to 1965 about half of all seniors lacked health insurance, while today nearly everyone over age 65 is covered. Medicare recipients enjoy excellent access to care, including to physicians, hospitals and other providers, with 96% reporting they have a usual source of care. For those who do not qualify for Medicare, the future is much less certain. Lack of health insurance results in a reduction in preventative care and screenings, and medical bills contribute to almost half of all bankruptcies. Currently, Congress is locked in a partisan standoff, with the health, well-being and very lives of millions of Americans on the line. It is time for truly bipartisan health care reform.
The United States operates the most complicated and fragmented health care system in the world. There are many payment systems, payers, and fee schedules with a complex and redundant private insurance bureaucracy. Additionally, America is trailing many developed countries on key health care measures such as infant mortality, life expectancy, disease burden, hospital admissions for preventable disease, avoidable mortality and in preventative medicine. Yet we spend the most of any country on health care; nearly 18% of GDP. Administrative costs in U.S. health care are the highest in the developed world, accounting for over 8% of spending, while traditional Medicare is operating at 2% overhead. These administrative expenditures are crowding out investments in public health. Furthermore, there is no socially beneficial reason to operate health care as a for-profit enterprise.
In addition to the financial considerations, the United States has an overriding moral and ethical obligation to provide basic health care to every citizen. Like so many countries before us, it is time to embrace the fact that health care is not a privilege for the few, but a right for all. In a recent Pew Research Center survey, 60% of Americans said it is the responsibility of the federal government to ensure health care coverage for all Americans. The U.S. is fortunate to be home to the world's best training programs which graduate first-rate medical staff. We play a central role in innovation, including in research and advances in technology. A socially just system of care needs to be developed so that these resources can be provided to all, as a public service.
The League of Women Voters, as a nonpartisan, progressive, political organization committed to helping create an informed and active electorate, has long supported access to a basic level of quality care at an affordable cost for all U.S. residents. Basic care should include the prevention of disease, health promotion and education, primary care (including prenatal and reproductive health), acute care, long-term care and behavioral/mental health care. The League favors an equitably distributed, efficient and economical national health insurance plan financed through general taxes in place of individual insurance premiums. As a result, the League opposes the American Health Care Act (AHCA) and the Better Care Reconciliation Act (BCRA) which would leave at least 23 million people, particularly minorities and underserved populations, uninsured. The AHCA and BCRA will reduce revenue to the Medicare Hospital Insurance (Part A), hastening its insolvency by 2-3 years. The BCRA will also increase the number of uninsured 50-64-year olds, which will result in new Medicare enrollees requiring more services due to delay in seeking care.
As we approach the 52nd anniversary of the Medicare program, please consider calling your Senator today and urge them to protect Medicare by voting no on the BCRA. Join the League of Women Voters in supporting bipartisan reform that creates a fair and equitable health care system that is worthy of this great nation.
Michelle Dorsey, MD President, League of Women Voters of Metropolitan Phoenix
Susan Penner, the 2017 recipient of the 'You Make A Difference Award' receiving award from 2016 winner, John Kohl at the LWVNWMC Annual Meeting April 14th, 2017
The following link is to a hearing on the California aid in dying bill, which is worth watching. It is a little over an hour long, but both sides of the issue are very well presented.