The Fragile State of Health Care Reform

The passage of the 2010 Patient Protection and Affordable Care Act (known as the ACA) was a watershed moment in U.S. health policy. Accomplishing what earlier generations of presidents and legislative advocates had failed to achieve required both adept policy-making and political skills. The most significant result of this legislation was the construction of a framework for universal coverage that builds on the existing array of public and private insurance programs that Americans have relied on for decades (some longer). Numerous implementation challenges yet to be addressed will determine how close to universal Americans’ health insurance coverage will be by the end of the decade. Nonetheless, setting forth the principles and mechanisms of coverage in legislation was a giant step toward greater equity of financial access to health care in the United States.

Countless compromises were required to gain sufficient support for a universal health insurance coverage bill. Among other things, the ACA has been criticized for doing too little to change the health care system in ways that would control the growth in spending and improve the quality and safety of patient care. But surely this was no accident. The coalitions necessary to gain passage of the bill would not have common ground in alternative cost control and delivery system reforms, particularly since many key groups that supported the ACA were provider and consumer organizations.

In the end, federal legislators prioritized coverage—through regulatory reform of health insurance markets, mandates, subsidies, and Medicaid expansion—over much-needed cost control and delivery reform. A similar approach was taken in Massachusetts, albeit in a more favorable economic climate. Advocates of health reform in the federal government, like those in Massachusetts, gambled that once voters and other stakeholders had experience with universal coverage they would be reluctant to let it unravel, even in difficult economic circumstances. And thus if universal coverage were threatened by fragmentation, inefficient delivery models, and a dysfunctional payment system, it would become easier to gain political support to overcome these thorny problems. To date, this gamble appears to have paid off in Massachusetts.  Roughly 98 percent of Massachusetts’ citizens have insurance coverage and while there is disagreement about the specific policies that should be pursued to reduce spending growth, most interest groups, including providers, support the idea that delivery system reform is needed to maintain affordable and universal coverage in the Commonwealth.

A very different picture has emerged in the wake of the ACA’s passage. For a variety of reasons (most of which are budgetary), many of the key provisions of the ACA will not be fully implemented for several years. So that means there are relatively few voters or other stakeholders who have experienced a benefit from the ACA at this point. Many citizens in fact remain ignorant about central provisions of the ACA. And since the ACA was enacted, the economic and federal budget crises have taken center stage. Add federal politics to the mix of no active constituency and general belt-tightening, and the future of the ACA looks increasingly fragile. Legislation sponsored by Congressman Paul Ryan that effectively eliminates the key coverage provisions of the ACA has already been passed by the House of Representatives. This legislation, which also eliminates the defined benefit structure of Medicare and replaces it with a defined contribution, was framed almost entirely in terms of deficit reduction, with little mention of the critical health policy issues at stake.

The Obama administration has been clear that it intends to defend the ACA and address cost control by tackling the underlying problems that lead to spiraling health care spending—provider payment, lack of care coordination, and other gaps in the delivery system. Policy reforms in these areas are being tested and implemented in Medicare and Medicaid, in part as a result of other ACA provisions. It will be critical that credible progress is made on these issues not only to avert future budget crises but also to show that withdrawing the federal government’s commitment to universal coverage—through the ACA, through existing Medicaid, CHIP and Medicare programs—is not the only way to answer the need to moderate federal health care spending. Using the power of the federal government to reform health-care delivery in ways that ensure future affordability is a choice with very different consequences from simply capping the amount the federal government will pay for Medicare and Medicaid and leaving cost control to individual beneficiaries and the states (which the Ryan bill does in order to guarantee lower federal health care spending).

A complex balance of economic and political factors made it possible for President Obama to sign the ACA into law on March 23. Now another array of forces threatens to undermine the central provisions of that law even before most Americans understand how it will affect them and their fellow citizens. The challenge for Democrats and other advocates of health care reform is to communicate more effectively the benefits from the ACA and reveal the false dichotomy offered by opponents: deficit reduction vs. preserving the ideals of universal coverage.

Meredith B. Rosenthal is a professor of health economics and policy at the Harvard School of Public Health.