The ABC’s of the Health Care Law


Posted to Nursing, Nursing News

Andy Dean -

The future of the Affordable Care Act is uncertain. The Supreme Court has heard arguments about whether or not the ACA is constitutional or not, and will be announcing their decision in June.

Meanwhile, the ACA itself is quite complex. Gina Kolata of the New York Times spoke with Jonathan Oberlander, an expert in the field, about the law and its future.

Mr. Oberlander starts by explaining what the ACA is, exactly. He calls it “a series of policies and regulations and subsidies and mandates.” He explains that that’s the reason it’s so complex — it has many different parts to it. Rather that starting from scratch, it is building on an “incoherent” medical system, and trying to patch the holes.

That’s not to say that he thinks that the ACA itself is also incoherent — he says that if it is implemented, it would be the biggest thing since Medicaid and Medicare in 1965, and that “it brings us closer to the ideal that all Americans should have access to care regardless of income or health status.”

Can the act be carried out without requiring almost everyone to buy health insurance?

That would be a serious wound, but it would not be fatal. There are many parts of the act, including the expansion of Medicaid, that could be implemented and that have little to do with the mandate. But without the mandate, the Affordable Care Act would cover fewer people and would not be as effective. And it will raise questions about the stability of the health insurance exchanges.

My guess is that if the whole law is thrown out we will see a return to incrementalism, doing small things like expanding Medicaid by a little bit or giving very modest tax credits to some uninsured. Or we will see federalism — turning things over to the states. Or doing nothing, which has been our default for much of the past century.

How you can have health insurance exchanges without a mandate? Wouldn’t the healthy shun them until they become sick, forcing the exchanges to charge prohibitive rates?

There are other things that you can do, but chances are Congress won’t do them. You can tell the insurers that they can charge a penalty to people who do not sign up at first and try to enroll later. It could be like what happens with Medicare prescription drug coverage — if you try to sign up after you are eligible, you pay a higher premium for the rest of your life.

So if the mandate is thrown out, what about other kinds of insurance? Medicare is deducted from my paycheck, right?

One of the things that even the conservative justices said is that tax-financed national health insurance is permissible. That’s why Medicare is O.K. It is a tax, and Congress has the authority to raise revenue. The mandate would require people to purchase private insurance.

In fairness to the Obama administration, at the time the Affordable Care Act was proposed there was an overwhelming legal consensus that the mandate was constitutional. The idea has been around for decades — it was originally a conservative Republican idea as an alternative to national health insurance — and few had raised serious constitutional issues.

If the law stands more or less intact, when will we see some big changes? So far, what has happened seems less than transformative.

June will be the big earthquake. (That is when the Supreme Court will announce its decision.) The next big month is November, with the election. If the law survives those two big challenges, legal and political, the big year is 2014. That is when most of the major changes go into effect.

States will be required to expand Medicaid. All Americans making up to 138 percent of the poverty line — that’s about $15,000 today for an individual — will be eligible for Medicaid. Historically, Medicaid has been linked to demography. It is not enough to be poor. In most states you have to be a pregnant woman, a child, elderly or disabled to be eligible. The A.C.A. will change that.

In addition, insurance subsidies will be made available to help the uninsured and some workers in small businesses buy private insurance through insurance exchanges. Small businesses can buy insurance there, too.

Insurers will be prohibited from denying coverage or charging higher premiums to persons with pre-existing conditions. And most Americans will be required to obtain — and larger businesses will be required to offer — health insurance or pay a penalty.

Doesn’t the Affordable Care Act contain a lot of proposals to get costs under control, like comparative effectiveness studies and reimbursing doctors based on their performance? Will such ideas help contain the cost of medical care?

Most of these ideas are wishful thinking. The evidence is either mixed or just not there that these reforms will rein in spending. They are a sort of faith-based cost control. Other options are more painful, and at the moment there may not be any method for controlling spending that is politically feasible.

The A.C.A.’s capacity to produce reliable cost containment has been exaggerated. Its Medicare savings are significant — it will save an estimated $500 billion in the next decade by slowing payments to hospitals and private insurance plans that contract with Medicare. Outside of Medicare, the cost containment is less impressive.

Do you foresee big changes in the near future — politically difficult decisions that will rein in costs?

I’m a Red Sox fan, so I believe in miracles. But in the short term, the answer is no. We will build on our existing system — it’s what we have, and it is too difficult to move away from it. Two or three decades from now, nobody knows.