Wednesday, January 25, 2017

Declining enrollments, shrinking networks, fleeing insurers. The ACA may be repealing itself

By Robert F. Graboyes of Mercatus.
"The full-throated rhetorical war over the Affordable Care Act has begun. The health care law, also known as Obamacare, will likely meet its demise in the coming days, weeks or months. Given its structural infirmities – soaring premiums and deductibles, collapsing exchanges and CO-OPs, unbalanced risk pools – that would almost certainly have been true under a Hillary Clinton presidency, as well; it just may have taken a little longer.

Obamacare opponents (largely Republicans) repeat their longstanding pledge to "repeal and replace," which the health care law's supporters (largely Democrats) disparage as "make America sick again." Supporters argue that millions gained coverage under the law, and its repeal may deprive them of that coverage. Opponents can truthfully craft a three-part counterargument: 1) the way the law paid for that increased coverage harmed vastly more millions, some severely; 2) the coverage gains that supporters tout may in part be transitory; and 3) there are better ways to expand coverage.
The Affordable Care Act is at best a byzantine zero-sum game with many winners and far more losers. Some gained coverage; others lost coverage (or crucial parts of their coverage). Some felt costs go down; others saw theirs go up. For some, care improved; for others, it deteriorated. The health care law likely means better health for some, worse health for others.

Those who gained coverage are easy to identify and assemble before television cameras; their potential coverage loss is simple to explain. In contrast, the law's casualties suffer in myriad ways that can be complex and often indirect. Archetypes may include:

    The guy who formerly had coverage but can't afford it now since the law pushed premiums through the roof.
    A woman who lost her top-of-the-line oncologist in the middle of chemotherapy because Affordable Care Act plans use skimpy provider networks to cut costs.
    A working-class family whose food, housing and education budgets are now badly squeezed by higher taxes and insurance premiums.
    The medical device inventor whose company can't survive the health care law's ruinous medical device tax, not to mention the patients whose suffering that device could ease.
    The fellow paying the individual mandate penalty/tax while receiving no benefits for it.
    The woman whose chronic care expenses used to be covered by insurance but whose $6,500 deductible today forces her to bear those expenses out of pocket.
    The couple who lost their jobs and benefits because the employer mandate forced their company to cut back on full-time employees.
    The woman who used to have high-quality insurance but now languishes in Medicaid waiting lines.
    The small-business owner who can't expand her company beyond 49 employees because of the health care law's employer mandate, along with the unemployed Americans she wished to hire.
    The man who refuses a job offer because he'll lose his Affordable Care Act subsidies if his income increases.

For actual Americans represented by these examples, the pain today is no less than the pain the health care law's repeal might – might – bring on others. But ironically, even that singular Affordable Care Act achievement, the coverage expansion, may well be partly ephemeral.

In the 1990s, Tennessee passed its own mini-Affordable Care Act to expand coverage via the TennCare Medicaid program. After an initial, highly celebrated increase in the insurance rolls, costs exploded, forcing the state to withdraw coverage from nearly 200,000 newly insured Tennesseans. Similar mini-Affordable Care Acts imploded in Kentucky, Hawaii and other states. It's easy and exhilarating to distribute piles of plastic insurance cards; paying for them over the long haul is another matter.

Repealing the Affordable Care Act will benefit the healthy, but high-risk patients still need protection.

While the health care law hasn't reached a Tennessee-style plummet, its strains mirror the early stages of those earlier disasters: declining enrollments, accelerating costs, shrinking networks and benefits and fleeing insurers. Congress aside, the Affordable Care Act may be repealing itself.

The health care law was not the only route to expanded coverage, and its Rube Goldberg architecture was never the best. Sustainable access to insurance and, more importantly, sustainable access to care will require fundamental changes in how providers deliver care and when patients demand that care. There are a hundred ways to do that, e.g., better use of telemedicine and nurse practitioners, faster Food and Drug Administration drug and device approvals, fewer anti-competitive hospital practices, more choices for veterans and Medicaid recipients. But these solutions require greater creativity and patience than "print some cards and find some money."

Repealing the Affordable Care Act and finding an array of substitutes will require work. The process will not always be painless. But sometimes, lawmakers have to look beyond the immediate, lean against the wind and head in the right direction."

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