Can the Affordable Care Act still live up to its promise?
With all the widespread and much-deserved criticism that accompanied the rollout of the federal Health Insurance Marketplace — the primary “storefront” of the Affordable Care Act — it would be easy to throw the baby out with the proverbial bathwater and declare President Obama’s hallmark legislation a complete failure.
But to do so would probably be shortsighted.
Without question the first eight weeks of Healthcare.gov were the stuff of Murphy’s Law, causing both state and federal officials to change rules, alter deadlines, revise promises, and delay portions of the ACA’s implementation. But for a reform bill intended to drastically change America’s health insurance and health care delivery model for decades to come, it is important for us to take a long-term view of its impact beyond those first eight weeks.
Further, we should be careful about judging the entirety of the Affordable Care Act on sales alone. While it is certainly intended to make health insurance available and affordable for a large chunk of the nation’s estimated 51 million uninsured, regardless of pre-existing medical conditions, the law is actually much more ambitious than that.
It intends to improve our nation’s health. One of the ACA’s most powerful provisions is also one of the least discussed. Dozens of vital preventive services — screenings, tests, vaccinations, and counseling, to name a few — must now be delivered without any co-pay by the patient. These free preventive services are designed to maintain good health, or at the very least to identify medical problems at their earliest stages when treatments are most effective. Over time, preventive care and early detection will combine to improve population health.
It intends to make insurance and care more affordable. There are three primary ways in which the law tries to manage costs for the end consumer:
- By establishing limits on out-of-pocket expenses (minimizing the chance that sickness or disease could result in financial ruin).
- Even though we have not seen a substantial number of “young invincibles” access products through the federal marketplace yet, premium tax credits and cost-sharing reductions certainly do encourage younger, healthier people to buy health insurance. This will eventually help balance the insurance risk pool and lower the per-patient cost of care. As care costs decrease, so will premiums.
- Today, many of the uninsured are getting medical care in the most expensive way possible — through hospital emergency rooms. As we acclimate the newly insured to the more efficient and cost-effective care delivery model — that is, through a primary care physician — ER usage should decline.
Of course, there is the added cost control inherent in greater competition between insurance companies. As the Health Insurance Marketplace attracts more insurers, each designing benefits within the same parameters, premium rates could stabilize.
It intends to make benefits more uniform. In addition to preventive services, the ACA provides that each health plan must offer a minimum set of 10 “essential health benefits.” Not only do these EHBs create a richer and more comprehensive level of coverage, they also eliminate “bad policies” that only create the illusion of coverage. There is a potential side benefit as well: the EHBs, combined with the uniform metal tiers of insurance plans (Platinum, Gold, Silver, Bronze), could serve to raise the insurance IQ of our population, allowing Americans to better manage their chosen benefit.
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It intends to reinvent the financial model of the industry. The Affordable Care Act requires that insurance companies pay out at least 80% of premium dollars in direct patient care expenses or be forced to send rebate checks to plan members. These “medical loss ratio” rules create a common denominator for insurance companies and put the emphasis on medical outcomes instead of profits.
It intends to put greater power in the hands of employers and consumers. Employers have grown accustomed to a system of annual rate hikes and policy changes that are out of their control. Employees often have little choice but to accept whatever the employer decides. Under the Affordable Care Act, each has a greater degree of control over the process. A properly functioning marketplace makes it easier to compare plans and prices, and “pay or play” options give employers the opportunity to reassess how they deliver health insurance in the workplace. When year two of open enrollment begins in November, these options will be even greater.
As you might expect, we won’t know the extent to which some of these goals are realized for a long time. The Affordable Care Act isn’t just a piece of legislation; it is, in no uncertain terms, a modest reinvention of the American health care system. While enrollment numbers are easy to track and report, these long-term implications and impacts will begin to surface more gradually.
History tells us that every major industry reform needs a starting point, a period of analysis, and often some reforming of the original reform. So it will likely be with the Affordable Care Act. But while it is tempting to judge the law on how many people signed up last month, we must remain patient as the larger impacts begin to unfold. A longer-term view is required to learn how the law can best facilitate its objectives and truly serve the needs of people across our nation.
Kevin R. Hayden is the CEO of Group Health Cooperative of South Central Wisconsin.
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