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The Affordable Care Act in 2015 — where do we stand?

By Louis Balizet, M.D.
Health News Colorado, Jan. 12, 2015

The beginning of the new year seems a logical time to review the Affordable Care Act and to speculate on its future. In 2014, we saw the start of the exchanges and Medicaid expansion, the end of Vermont’s attempt to expand coverage beyond the ACA, and continued legal challenges aimed at killing the ACA piecemeal. What do all these portend for 2015?

Approximately 6 million previously uninsured Americans obtained health insurance coverage last year through federal and state exchanges, with the federal exchange accounting for most of the sign-ups.

Exchange performance for 2015 policies is smoother overall than last year’s chaotic debut, but it is unclear at the present time how many more people will be enrolled. Early returns suggest the increase will be modest.

Colorado’s exchange is beset by the recent mass exodus of upper-echelon management and concerns about financial viability when federal support expires at the end of this year. Nationwide, most policies sold in 2014 were of low actuarial value (bronze or silver), exposing policyholders to out-of-pocket expenses up to $6,000 apiece.

Most would agree, however, that being underinsured is preferable to being uninsured. Medicaid expansion provided coverage for an additional 4 million, a figure that could have been 2 million higher were it not for the opt-out opportunity handed Republican governors by the Roberts Court in 2012.

Pennsylvania elected to expand Medicaid for 2015, using an attenuated version; 100,000 have signed up so far. Arkansas may rescind its 2014 Medicaid expansion, withdrawing coverage from over 200,000 people. Arizona’s planned 2015 expansion is being held up by Republican legislators’ legal maneuvers.

The most populous states to refuse Medicaid expansion, Texas and Florida, remain obdurate. Thus, it is unlikely that significantly more people will be covered by Medicaid in 2015 than were in 2014.

While states largely concentrated in the old Confederacy took every opportunity to shield its citizens from the perceived evils of the ACA by declining Medicaid expansion and state exchanges, liberal Vermont headed in the opposite direction.

Reflecting a decade of preparation by single-payer advocates and led by unabashedly pro-single payer Gov. Peter Shumlin, Vermont attempted to fashion universal coverage for its residents through Green Mountain Care. This government-run enterprise aimed at replacing private insurance with comprehensive (platinum-level plus) tax-supported benefits.

Last month, however, Shumlin pulled the plug on the project, citing unacceptably high levels of taxation that would have been needed to fund benefits. The Vermont attempt to provide universal coverage was doomed to failure, however, because it was nowhere near a single-payer system.

Green Mountain Care would have had to co-exist with large private employer plans, Medicare, Tricare, the V.A.; it could not solve the conundrum of how to cover Vermonters working out-of-state and out-of-staters working in Vermont.

Vermont therefore could not avail itself of economies available only with national single-payer universal health care: single-source purchasing of pharmaceuticals, global budgeting for hospitals, and reduction of system administrative overhead from insurance company levels (20 percent) to Medicare levels (2 percent). Absent these savings, taxes required for financing far exceed insurance premiums avoided.

The Affordable Care Act faces an existential threat this year that dwarfs challenges it has faced so far. It is looking down the barrel of a gun held by the Supreme Court thanks to a critical ambiguity in the hastily written 2010 bill.

Opponents to the ACA argued in King v. Burwell that language in the bill, and resultant Act, restrict insurance subsidies to those policies purchased through the state exchanges only, eliminating subsidies for policies purchased, as most were, through the federal exchange.

The Fourth Circuit Court disagreed, much to the temporary relief of ACA supporters, but the Roberts Court in November agreed to hear the plaintiffs’ appeal of the Fourth Circuit Court’s decision. If the Supreme Court throws out subsidies in the federal exchange (used by 36 states), millions would likely exit the insurance market on very short notice

Quite apart from the widespread suffering this would cause, the resultant actuarial nightmare could cause the ACA to collapse, taking smaller, newer and more vulnerable insurance companies with it.

No one really knows what the elimination of subsidies in the federal exchanges would mean, but references to Armageddon are popular.

If the Affordable Care Act survives King v. Burwell, it will probably cover a few more million this year, assuming a slight increase in Medicaid expansion and modest improvement in the function of the exchanges. This would leave at least 35 million Americans without health care coverage, a figure that is unlikely to change much in future years.

Will this be acceptable to our country?

If not, or if the ACA is crippled in June by the Roberts Court, where do we go from here?

The Vermont debacle instructs us, not that single-payer universal health care is impossible, but rather that it has to be done on a national rather than on a state-by-state basis.

We might want to take another look at Medicare for all. It would be immune from legal assault, given its reliance on taxes rather than a complicated cobbled-together mixture of mandates, insurance premiums and subsidies. If it performs anywhere near as well as Canada’s Medicare (its name for single payer universal health care), it could gradually reduce health care spending as a percentage of GNP toward sustainable (12 to 13 percent) levels, while improving overall health outcomes by eliminating financial barriers to health care.

Political opposition to Medicare for all would appear to be insurmountable now, with anti-government fervor ascendant in Washington and health care industry profits and clout increasing relentlessly.

The Affordable Care Act at one time seemed to be single-payer advocates’ worst night nightmare – not enough to cover everyone, but enough to defuse interest in fundamental reform. If it stalls out or blows up, however, the ACA might prompt a look at alternatives, of which there is only one.

Louis Balizet, M.D., is a recently retired oncologist from Pueblo. He’s a member of the advocacy group, Physicians for a National Health Program, and a leader of Health Care for All Colorado. This article is a slightly revised version of the original.

Opinions expressed in Health News Colorado represent the views of the individual authors.

http://www.healthnewscolorado.org/2015/01/12/opinion-the-affordable-care...