When you have lived in Washington long enough, you get used to the great spring migration of visitors eager to see the famous cherry blossoms along the Tidal Basin. Usually this annual celebration of nature occurs in early to mid-April, but thanks to our unusually warm weather they have already blossomed.
But that’s not all that has Washington buzzing this week. Last Friday, politicians from both parties either celebrated or decried the second anniversary of the signing of the Affordable Care Act (ACA), also known as the health reform law. And this week, the U.S. Supreme Court has begun a virtually unprecedented three-day set of oral arguments in a case challenging the constitutionality of various provisions of the Act. Both sides of this continuing debate also plan to make their presence known with a series of events and demonstrations on Capitol Hill and elsewhere in town.
With so much hullaballoo, it’s sometimes difficult to parse out the meaning of it all in more measured tones, yet that’s exactly what is needed.
Let’s take the anniversary. Such occasions are useful in allowing us to step back and see how things are going. Not perfectly, to be sure, but in the two years since the Act was signed into law, progress has been made in accomplishing one of the law’s primary objectives: coverage for all Americans. While there is still a great deal of work to be done, the Department of Health and Human Services has highlighted benefits that many Americans have already seen from the law:
- Seniors and people with disabilities on Medicare have new prevention benefits and those with high prescription drug costs saved over $3 billion in 2011 through discounts on drugs they buy while in the so-called “donut hole.”
- More than 2.5 million young adults (age 18-26) gained health insurance coverage in 2011 thanks to a provision of the law requiring insurers to allow parents to keep adult children on their policy if they don’t have access to an employer plan.
- Nearly 50,000 people with pre-existing medical conditions ranging from cancer to diabetes are now covered by the Pre-Existing Condition Insurance Program (PCIP). Although enrollment in this program has lagged behind earlier projections, extension of coverage makes a difference in the lives of people living with these conditions.
Equally as important as these initial steps toward health care coverage is the advancement of the insurance principle of shared risk. This market principle recognizes that most of us will have healthy and sick times during our lives. By expanding coverage to more Americans, the law makes it possible to spread risk – distributing the cost of inevitable illness across a wider share of the population. This, in effect, is what the individual mandate in the law accomplishes. In the years ahead, we’ll need to make health care and insurance more affordable. Combining coverage with shared risk is step number one.
So let’s move on to the Supreme Court. One of the biggest issues is whether the government can mandate purchase of health coverage and thereby spread the cost over a very large population. Following this week’s arguments, the Supreme Court is likely to issue its decision in late June or early July. No one can know for certain how this will turn out, but there are at least three possible scenarios:
Scenario 1: The Court could decide to overturn major portions of the law including the individual mandate, the expansion of Medicaid eligibility, and the reforms in insurance underwriting (i.e., prohibiting exclusions based on pre-existing conditions, rescissions, annual and lifetime limits, and rating based on sex and age).
Scenario 2: The Court could surgically strike down the mandate, but leave in place the insurance reforms.
Scenario 3: The Court could allow the Act to stand in its entirety.
Scenarios 1 and 3, while diametrically opposite, would provide clarity for the health care system and the nation, on the issue of the mandate. Under Scenario 1, we would return, more or less, to the status quo of spotty insurance coverage and high levels of uncompensated care, and the number of uninsured Americans would continue to increase. Under Scenario 3, we would move forward to fully implement the health care law with all of the accompanying complexities.
Scenario 2 is perhaps the most troubling possibility. If the Court strikes down the mandate, we will continue to face a growing number of uninsured Americans. At the same time, if the court leaves the insurance reforms in place, insurers’ hands will be tied if consumers can move in and out of insurance based on their health status. This could send our private insurance industry into a steep spiral of higher costs and fewer tools to contain those costs. Ironically, the likely result could be a stronger push to expand the number and type of public insurance programs.
Finally, however this week’s debates – political and legal – are resolved, it is clear that, for many reasons, health care in America costs more than it should. Encouragingly, movement toward improving value has begun to take root. It’s still fragile, but consumers, employers, plans, and others are beginning to coalesce around the idea that the best direction for the American health care system is one that drives toward improved care and lower costs. Let’s not take our eyes off that goal no matter how pretty the blossoms or distracting the political and legal machinations.
– Patricia Smith
President and CEO, ACHP