Jun 23, 2014 | By Carolyn Burstein, NETWORK Communications Fellow
The Affordable Care Act (ACA) was strongly supported by NETWORK, which played an important role in getting it passed by both houses of Congress despite its unanimous rejection by congressional Republicans. It was signed into law in March 2010 by President Obama. Without doubt, it is the most significant overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965. In addition to increasing the quality of healthcare, the two major goals of the legislation were to expand public and private insurance coverage and to reduce the costs of healthcare for individuals and the government.
It is currently too early to tell if the mechanisms the law put in place (e.g. Affordable Care Organizations [ACOs]; creation of the Center for Medicare and Medicaid Innovation; emphasis on "preventive care") have improved the quality of healthcare delivery to a significant degree because most of these efforts are quite new and more reforms will take effect between 2014 and 2020.
However, the signs are there. On June 20, the Washington Post reported that a new rule was issued by the Department of Labor that would allow any employee to request leave to care for a sick same-sex spouse under the Family and Medical Leave Act. This rule may not affect the quality of overall healthcare delivery, but it will certainly help the quality of care for many individuals.
Also, let's not overlook new standards for insurance. Among these new standards are a ban on the ability to drop policyholders if they become sick, a ban on price discrimination on the basis of preexisting conditions, and allowing young adults to remain on their parents' insurance plan until their 26th birthday. These improvements clearly affect the quality of healthcare services received by those affected.
The June 8th issue of the New York Magazine, which served as the inspiration for this blog, reported that by May 31 of this year, only 13.4 % of adults aged 18 and older remained uninsured, according to a Gallup-Healthways Well-Being survey. As recently as a year ago, more than 18% of adults older than 18 were uninsured. That is a tremendous victory in a very short timeframe!
And that is despite the Supreme Court decision of June 28, 2012 (National Federation of Independent Business v. Sebelius), which held that states cannot be forced to participate in the ACA's Medicaid expansion. As of early April 2014, 24 states did not plan to implement Medicaid expansion this year, although there is ongoing open debate in 5 states, according to the Kaiser Family Foundation. If these states had allowed the expansion of Medicaid, the rate of the uninsured would be even lower.
Several papers and websites (including the Washington Post and the New York Times) carried the findings of the Kaiser Family Foundation survey released on June 19, which showed that about 6 in 10 people who bought health insurance through the ACA exchanges were previously uninsured. These findings are an indication of the impact the ACA's coverage expansion is having on the healthcare market. And this percent does not include those who obtained Medicaid through the government. Three million have enrolled in Medicaid through the federal health exchange (Healthcare.gov) as of late April 2014. Forbes reports in its June 4 issue that another three million people enrolled in states that expanded Medicaid, for a total increase in Medicaid enrollment of 15.3%. In states that did not expand Medicaid, about 3.3% also enrolled in Medicaid during the same period.
The Kaiser Family Foundation survey reported that 57% of people purchasing exchange coverage said they were previously uninsured, with 71% of these reporting that they didn't have coverage for at least the past two years. Surely these people and many of the new enrollees in Medicaid are among those responsible for the drastic drop in the uninsured!
Let's turn our attention to the reduction in costs for healthcare. The same New York Magazine article concluded that medical inflation had fallen to its lowest rate in half a century. That is a remarkable achievement! At issue, of course, are the causes of the decline in medical inflation – and that analysis is highly controversial. Several studies have attempted to explain the reduction in the rate of inflation, and they include, among others:
Although a clear amount of uncertainty exists about the explanatory value of each of these causes, many of these same studies show that the temporary effects of the recession cannot account for the entirety of the slowdown in costs, and that the ACA structural changes must be given at least partial credit.
But the cost reduction in medical inflation is only one healthcare cost to consider. The Center on Budget and Policy Priorities (CBPP), using estimates released by the Congressional Budget Office (CBO), said that Medicaid expansion, which many opponents of the ACA claimed would cripple state budgets, is an even better deal for states than was previously thought.
The CBO has sharply lowered its estimates of the costs to states of expanding Medicaid, now estimating that the federal government will, on average, pick up more than 95% of the total cost of Medicaid expansion over the next 10 years (2015-2024). States will spend only 1.6% more on Medicaid (1/3 less that their previous estimate) than in the past, and that is before factoring in the savings produced for federal services such as mental he