With Republican presidential candidate Donald Trump’s victory in the 2016 election and Republican majorities in both chambers of the U.S. Congress, questions regarding legislative priorities for the incoming administration are dominating political discourse. In particular, the 2016 election has been viewed by political commentators, in part, as a referendum on the ability of the 2010 Patient Protection and Affordable Care Act (ACA), i.e., “Obamacare,” to resolve many of the fundamental issues affecting the delivery of, and payment for, healthcare services in the U.S.,1 including rising health insurance premiums in the individual health insurance market and increased beneficiary cost-sharing under such plans.2 While President-elect Trump vowed to repeal the ACA during his campaign,3 he has since stated his intention to keep certain provisions, possibly because a full, immediate repeal may increase the number of uninsured persons by approximately 22 million.4
President Harry S. Truman once said, “The only thing new in the world is the history you don’t know.”5 Through this lens, a reflection on the ACA six years after passage, including an examination of its successes and shortcomings, may serve to guide assessments of future healthcare reform efforts. This two-part Health Capital Topics series will discuss the current status of the ACA and its potential for evolution in light of the recent election, with this first installment examining the impact of the ACA during its six years of existence.
Any investigation regarding the impact of the ACA on the U.S. healthcare industry must first acknowledge that the legislation, throughout its 900 pages, and the thousands of pages of regulatory text implementing its provisions, covers such a wide variety of topics (e.g., health insurance payment reform, access to healthcare, quality of healthcare, healthcare costs, fraud and abuse containment efforts) that reflection on a single issue cannot adequately surmise its overall impact on healthcare in the U.S.6 Nevertheless, the passage of the ACA on March 23, 2010, serves as a significant milestone in the paradigm shift in the healthcare industry toward an increasing emphasis on quality, efficiency, and access to care. Many of the drivers of early healthcare reform efforts (e.g., rising healthcare expenditures, changing patient populations and demographics) created a “perfect storm,” which helped drive both public and private efforts to reform the industry.7 With the law’s creation of many value-based reimbursement (VBR) programs, including accountable care organizations (ACOs), the hospital readmissions reduction program (HRRP), and the physician value-based payment modifier (PVBM) program, the ACA provided momentum for the institution of equivalent programs already being created among healthcare providers and private health insurers.8 Such pressure on increasing quality and reducing costs remains present today, as national healthcare expenditures are projected to reach $3.35 trillion, and constitute 18.1 percent of national gross domestic product, in 2016.9
Notably, the ACA has already addressed, and limited the impact of, many of the drivers of healthcare reform during its six-year existence. Most notably, since 2010, the uninsured rate in the U.S. has decreased from 15.5 percent in 2010 (47,208,000 persons) to 9.4 percent in 2015 (29,758,000 persons),10 due in large part to coverage provisions contained within the ACA, such as those related to the “individual mandate” and Medicaid expansion.11 Further, states that expanded Medicaid to most adults with incomes at or below 138 percent of the federal poverty line experienced multiple economic benefits, including decreased healthcare costs per enrollee for the newly eligible adult population.12 Despite expected growth in overall healthcare expenditures as a result of increases in the number of persons covered by Medicaid expansion, states that increased eligibility spent an average of $4,513 per enrollee for the new adult Medicaid population, a nearly $2,600 difference from average spending per enrollee across all Medicaid beneficiaries,13 as well as reduced uncompensated care costs due to coverage increases.14 Relative to their expansion counterparts, non-expansion states may experience limited reductions in uncompensated care costs due to the larger number of uninsured individuals who otherwise may be insured under Medicaid.15 Further, Medicaid expansion has been correlated with reduced utilization of the emergency department as a normal source of medical care.16
Additionally, the ACA instituted many provisions that remain popular with Republicans and Democrats alike. Such provisions include:
Banning health insurers from discriminating against beneficiaries with pre-existing conditions;
Increased coverage for behavioral health services; and,
Allowing children to maintain health insurance coverage through the plans of their parents until the age of 26.17
Many healthcare policy experts have noted that these popular coverage provisions are likely to remain federal law during the next administration, citing bipartisan support for the policies.18
Despite the numerous positive impacts of the ACA, certain programs and policies promulgated under the landmark legislation have faced significant attacks from Republicans, including President-elect Trump. In particular, Republicans have criticized the performance of the health insurance exchanges (Exchanges) created under the ACA, focusing on the rise in premiums under such plans, as well as the lack of plan options available to consumers on the market platform.19 For the 2016-2017 enrollment period, benchmark premiums for midlevel Silver plans increased an average of 25 percent nationally, while each county on the Exchanges will, on average, offer policies from three (3) health insurance companies, a decrease from the 2015-2016 average of five (5).20 Such concerns have been used by Republicans as evidence of the ineffectiveness of the law during the Presidential campaign.21
While concerns regarding the sustainability of the Exchanges during the 2016 campaign cycle have focused primarily on events occurring after the implementation of this program in 2014, these concerns are more broadly rooted in the anti-competitive nature of the health insurance marketplace, both before and after the law’s enactment in 2010. A 2012 study published in the American Economic Review noted that, in 2006, 99 percent of large group insurance markets fell within the “highly concentrated” category according the Horizontal Merger Guidelines set forth by the U.S. Department of Justice, an increase from the 1998 level of 68 percent.22 The inclusion of a public insurance option, which many Democrats advocated to include in the ACA (but which option was ultimately excluded from the legislation) was meant to provide an alternative health insurance choice for consumers, particularly in concentrated markets.23 Such exclusion from the landmark legislation may have prevented the creation of a competitive force that would push private health insurers to control costs.24
Many aspects of the ACA that faced scrutiny during the 2016 election cycle, including the Medicaid expansion and the Exchanges, reflect the fact that the ACA does not exist in a vacuum; rather, numerous forces, both market-based and in various levels of government, have affected, and will continue to affect, the implementation and sustainability of the ACA.25 Further, the 2016 election serves as evidence of the changing environment in which healthcare reform arises:
“[T]he one certainty is that healthcare reform cannot, and should not, be viewed as a singular event, but rather as a long-standing process that will inevitably continue to be subject to various intervening economic circumstances, health variables, and sociopolitical scenarios at each stage.”26
Part Two of this series will reflect on the areas of the ACA that may be subject to change under the Trump administration, and how those changes may occur. Further, Health Capital Topics will provide coverage and analysis of changes to the law as they occur in the future.
“A Quick Guide to Rising Obamacare Rates” By Reed Abelson and Margot Sanger-Katz, The New York Times, October 25, 2016, http://www.nytimes.com/2016/10/26/upshot/rising-obamacare-rates-what-you-need-to-know.html (Accessed 11/4/16); “Ailing Obama Health Care Act May Have to Change to Survive” By Robert Pear, The New York Times, October 2, 2016, http://www.nytimes.com/2016/10/03/us/politics/obama-health-care-act.html (Accessed 10/4/16).
“As Health Premiums Jump, Obama Wields an Imperfect Shield” By Robert Pear, The New York Times, October 30, 2016, http://www.nytimes.com/2016/10/31/us/politics/affordable-health-care-premiums.html (Accessed 11/4/16).
“How Congress, President-Elect Trump Might Proceed on Promise to Repeal, Replace ACA” By Jeremy Earl, Ankur J. Goel, and Kate McDonald, McDermott Will & Emery, November 11, 2016, https://www.mwe.com/en/thought-leadership/publications/2016/11/how-congress-president-trump-repeal-replace-aca (Accessed 11/11/16); “Here is What Donald Trump Wants to Do in His First 100 Days” By Amita Kelly and Barbara Sprunt, NPR, November 9, 2016, http://www.npr.org/2016/11/09/501451368/here-is-what-donald-trump-wants-to-do-in-his-first-100-days (Accessed 11/17/16).
“Day One and Beyond: What Trump’s Election Means for the ACA” By Timothy Jost, Health Affairs Blog, November 9, 2016, http://healthaffairs.org/blog/2016/11/09/day-one-and-beyond-what-trumps-election-means-for-the-aca/ (Accessed 11/11/16); “Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026” Congressional Budget Office, March 2016, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51385-HealthInsuranceBaseline_OneCol.pdf (Accessed 11/22/16).
“Plain Speaking: An Oral Biography of Harry S. Truman” By Merle Miller, New York, NY: Berkley Publishing Company, 1974, p. 26.
“Patient Protection and Affordable Care Act” Pub. L. No. 111-148, 124 Stat. 119 et seq. (March 23, 2010); “The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice” By Sara Rosenbaum, J.D., Public Health Reports, Vol. 126, No. 1 (January-February 2011), p. 130.
“Healthcare Valuation: The Four Pillars of Healthcare Value” By Robert James Cimasi, MHA, ASA, FRICS, MCBA, AVA, CM&AA, Hoboken, New Jersey: John Wiley & Sons, 2014, p. 670-671.
“Implications of the U.S. Supreme Court Ruling on Healthcare” Health Research Institute, PriceWaterhouseCoopers, June 2012, http://download.pwc.com/ie/pubs/2012_implications_of_the_us_supreme_court_final_ruling_on_healthcare.pdf (Accessed 11/16/16), p. 4.
“National Health Expenditure Projections 2014-2024” Centers for Medicare and Medicaid Services, July 14, 2016, https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountsprojected.html (Accessed 8/3/16), Table 1.
“Table HIC-4_ACS. Health Insurance Coverage Status and Type of Coverage by State All People: 2008 to 2015” U.S. Census Bureau, 2016, http://www.census.gov/library/publications/2016/demo/p60-257.html (Accessed 11/7/16).
“The Effects of Medicaid Expansion under the ACA: Findings from a Literature Review” By Larisa Antonisse, Rachel Garfield, Robin Rudowitz, and Samantha Artiga, The Kaiser Commission on Medicaid and the Uninsured, June 2016, http://files.kff.org/attachment/Issue-brief-The-Effects-of-Medicaid-Expansion-under-the-ACA-Findings-from-a-Literature-Review (Accessed 11/7/16).
“Medicaid Expansion Spending and Enrollment in Context: An Early Look at CMS Claims Data for 2014” By Laura Snyder, Katherine Young, Robin Rudowitz, and Rachel Garfield, The Kaiser Commission on Medicaid and the Uninsured, January 2016, http://files.kff.org/attachment/issue-brief-medicaid-expansion-spending-and-enrollment-in-context-an-early-look-at-cms-claims-data-for-2014 (Accessed 11/7/16).
“Medicaid Enrollment & Spending Growth: FY 2015 & 2016” By Robin Rudowitz, Laura Snyder, and Vernon K. Smith, The Kaiser Commission on Medicaid and the Uninsured, October 2015, http://files.kff.org/attachment/issue-brief-medicaid-enrollment-spending-growth-fy-2015-2016 (Accessed 11/16/16).
“The Impact of Medicaid Expansion on Uncompensated Care Costs: Early Results and Policy Implications for States” By Deborah Bachrach, Patricia Boozang, and Mindy Lipson, Robert Wood Johnson Foundation, June 2015, http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2015/rwjf420741 (Accessed 11/16/16).
“Both the ‘Private Option’ And Traditional Medicaid Expansions Improved Access To Care For Low-Income Adults” By Benjamin D. Sommers, Robert J. Blendon, and E. John Orav, Health Affairs, Vol. 35, No. 1 (January 2016), p. 99.
“Policy Experts Say Quick Repeal and Replace of ACA Unlikely” By Aurora Aguilar and Shannon Muchmore, Modern Healthcare, November 9, 2016, http://www.modernhealthcare.com/article/20161109/NEWS/161109912 (Accessed 11/11/16).
Ibid.; “Much of Obamacare Won’t Likely Survive, but Key Parts Will” By Jayne O’Donnell, USA Today, November 10, 2016, http://www.usatoday.com/story/news/politics/2016/11/09/much-obamacare-wont-likely-survive-but-key-parts/93542284/ (Accessed 11/11/16); “The Future of Obamacare Looks Bleak” By Margot Sanger-Katz, The New York Times, November 9, 2016, http://www.nytimes.com/2016/11/10/upshot/the-future-of-obamacare-looks-bleak.html?_r=0 (Accessed 11/11/16).
“Donald Trump Says He May Keep Parts of Obama Health Care Act” By Reed Abelson, The New York Times, November 11, 2016, http://www.nytimes.com/2016/11/12/business/insurers-unprepared-for-obamacare-repeal.html?_r=0 (Accessed 11/15/16); “How Obamacare Helped Trump” By Olga Khazan, The Atlantic, November 9, 2016, http://www.theatlantic.com/health/archive/2016/11/how-obamacare-helped-trump/507113/ (Accessed 11/11/16).
“Health Plan Choice and Premiums in the 2017 Health Insurance Marketplace” Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, October 24, 2016, https://aspe.hhs.gov/sites/default/files/pdf/212721/2017MarketplaceLandscapeBrief.pdf (Accessed 11/16/16), p. 6, 38.
Pear, “Ailing Obama Health Care Act May Have to Change to Survive” October 2, 2016.
“Paying a Premium on Your Premium? Consolidation in the U.S. Health Insurance Industry” By Leemore Dafny, Mark Dugan, and Subramaniam Ramanarayanan, American Economic Review, Vol. 102, No. 2 (2012), p. 1167.
“The Affordable Care Act and Competition Policy: Antidote or Placebo?” By Thomas L. Greaney, Oregon Law Review, Vol. 89, No. 3 (2011), p. 835; “Ailing Obama Health Care Act May Have to Change to Survive” By Robert Pear, The New York Times, October 2, 2016, http://www.nytimes.com/2016/10/03/us/politics/obama-health-care-act.html (Accessed 10/4/16).
Pear, “Ailing Obama Health Care Act May Have to Change to Survive” October 2, 2016; Abelson and Sanger-Katz, October 25, 2016.