By Stephen Reid
The prevailing belief is that President Obama’s win will propel the Affordable Care Act (ACA) forward with little delay. Democrats tout the legislation as essential to addressing a broken health care system that results in the U.S. spending twice as much as most developed countries on health care while leaving 50 million people without coverage. Republicans cite the ACA as a job killer.
Beyond the rhetoric, both parties have failed to accept their responsibility to make the health care system work to keep us healthy. The legislation that is now the law of the land will fill some immediate gaps in coverage that have allowed the cost of uncompensated care to skyrocket (Uncompensated care cost Georgia hospitals $1.5 billion in 2010), forcing many hospitals out of business. But the full benefit of the law will have to overcome a few hurdles that will not be easily dismissed. Among them:
• Getting young people to sign up: The penalty for not acquiring insurance beginning in 2014 will only be $95 per adult and $47.50 per child. In 2016, this amount jumps to $695 per adult and $347.50 per child with a family maximum of $2,085, or 2.5 percent of income. Getting young people to “buy in” with such small penalties in the early years will not be easy. These young people need to be part of the insurance system to ensure that insurance premiums in the new subsidized state exchanges will offer real savings to consumers.
• Finding enough doctors: With the influx of new insureds entering the system, there will be capacity shortages. Massachusetts, the model for the Affordable Care Act, has the highest wait times in the country to see a specialist, a result of the establishment of the state’s insurance mandate in 2006 and entry of so many people into the health care system at the same time.
• Lowering Costs with Greater Competition: The ACA created state exchanges — insurance systems supported by federal premium subsidies to expand insurance coverage and create competition that would lower premiums. The states that did little in the way of planning for the ACA will now likely have to rely on the federal government to step in and run their exchanges. This may hamper the ability to create competition in the very markets that need it.
• Medicaid expansion: The premise of insurance for everyone is heavily dependent on the expansion of Medicaid. When the U.S. Supreme Court gave each state the right to decide whether to broaden their Medicaid programs, it potentially set in effect a chain of events that starts with states saying “No.” Following a state’s refusal to expand Medicaid would be a growing uninsured population, hospital emergency rooms being flooded with uninsured patients, uncompensated care skyrocketing, and insurance premiums remaining stubbornly high.
The Affordable Care Act is a political compromise, but a start at fixing a serious challenge to our nation’s future economic viability. The ACA, for all its faults, tries to create a system of checks and balances that levels the playing field for all of us.
Stephen Reid is managing partner of Pharmspective, which advises firms on issues including the Affordable Care Act.