By Mark A. Kelley, MD |8/30/17
Founder, HealthWeb Navigator
The Affordable Care Act (ACA) debate resumes when Congress returns from its summer recess on September 4th. In the meantime, the debate has already had major effects on public opinion.
A recent report describes how Americans currently view the ACA. According to national polls, over 90% of Americans would change the current law. Most Democrats would expand ACA coverage while most Republicans would reduce ACA benefits or rewrite the law completely. Only 8% of those polled would repeal the ACA without a replacement.
The most surprising result is the public’s response to the following statement: “It is the responsibility of the federal government to ensure that all Americans have health coverage.”
Last year, 51% of Americans agreed with that statement. In 2017, the approval rate jumped to 60%. It appears that a government health insurance option is gaining popularity.
Meanwhile, contrary to some reports, the ACA program is stable. Most regions of the country still have private insurance plans available through the ACA. Many insurers increased premiums to cover losses, but that one-time intervention seems to have stabilized the markets.
The reality of health insurance is that it must be profitable to cover unexpected losses. The insurance company has several tools to ensure a profit: charge high premiums, select consumers with low risk, or limit the services and/or payments of coverage.
The ACA eliminated most of these options. High-risk consumers could not be denied coverage or be overcharged. Further, every health plan was required to pay for a standard portfolio of services.
To offset losses, the federal government has provided supplements to cover costs on a year-to-year basis. The ACA has proven even more expensive than anticipated because the uninsured have been much sicker. The ACA had plans to offset these costs but they have had no major effect to date.
To force Congress to pass a new law to replace the ACA, President Trump has threatened to stop its federal supplements. That threat has already caused some insurance companies to leave the ACA. Congress, however, does not favor this action since it would leave millions of Americans without health insurance.
This situation has exposed the major weakness of the ACA — its financial fragility.
• The ACA required all Americans to purchase health insurance to create a new funding source. That plan failed because the law was poorly enforced. Now the ACA has no consistent source of revenue to offset costs.
• On the costs, the ACA is also vulnerable. The ACA insurance plans are managed by the private insurance industry. As long as insurance companies can rely on federal subsidies, they have little incentive to reduce costs.
• The bottom line is that the federal government must continue to subsidize the ACA.
This challenge is not new. With Medicare for the elderly, the federal government has a long experience with publicly supported health insurance. Medicare is a popular plan that is predictable, understandable, and accepted across the nation. Because it controls national pricing, Medicare has kept inflation low compared to private insurance.
“Medicare for All” was popular with some voters during the 2016 presidential campaign. Many now wonder why they cannot have the same federal insurance plan as their parents and grandparents.
That is a timely question. For most Americans, employee health insurance has become too expensive and unwieldy. Our U.S economy rewards workers who have geographic mobility and job flexibility. For such employees, finding health insurance in differing local markets can be a nightmare. A national health plan, like Medicare, solves that problem.
Companies see the rising cost of employee health insurance as a threat to the bottom line. Many businesses pass these costs to their employees through higher deductibles, co-pays, and co-insurance. That maneuver may reduce company costs, but it puts economic stress on employees and does little to curb medical inflation.
Americans are beginning to understand these issues and envision a future where the federal government ensures access to health care for everyone. During the ACA debate, voters sent several strong signals to Congress:
• Do not repeal the ACA without a replacement plan in place.
• Do not reduce current benefits.
• Do not interrupt or threaten any current insurance.
The message seems clear: most Americans want Congress to improve the ACA and move forward—not backwards. The only institution with the experience, power, and resources to lead the way is the federal government. If that happens, the country will be on the path to a “public option” like Medicare where the federal government is the insurer.
That option was proposed for the ACA in 2010 but was withdrawn due to political pressure from the insurance industry. Reviving the public option will likely provoke the same industry reaction. However, if voter support continues to grow, the public option could prevail. That will be a game-changer.