The U.S. Supreme Court decision earlier this year upholding the 2010 Patient Protection and Affordable Care Act (PPACA) will likely not be the final battle over health care reform.
Whoever wins the presidential election in November—whether Governor Romney, who has pledged to seek repeal of the controversial law; or President Obama, who is committed to seeing it through—will have to revisit potential flaws in the legislation that threaten to undermine PPACA’s promise of universal, affordable health care and that could be a drag on the economy.
That’s my take-away from a spirited debate on the Affordable Care Act hosted on September 21 by The Denver Post and the University of Denver at the Post’s offices. Moderated by Michael Booth, a Denver Post health care reporter and former Colorado Governor Richard Lamm, the debate pitted Ezekiel Emanuel, a chief architect of the Affordable Care Act, against Linda Gorman, who represents a Denver-based free market think tank.
In its aims, the Affordable Care Act has much to commend it. Emanuel, who is chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania and formerly a special advisor for health policy to the White House’s Office of Management and Budget Director, said the legislation is designed to fix three problems that ail America’s current health care system: (1) the lack of access to affordable care; (2) uneven quality in the delivery of care; and (3) rising costs that outpace inflation.
Turning to the most controversial aspect of the Affordable Care Act, the individual mandate to buy health insurance or pay a penalty, Emanuel said that coverage of pre-existing conditions—a popular feature of the law—would not be possible without the mandate.
Emanuel touted other provisions of the law that aim to improve health care outcomes. Among them: incentives that encourage the adoption of electronic medical records by doctors; a reduction in medical errors at hospitals; a lowering of readmission rates for discharged patients (which now average 20% nationwide); and the implementation of metrics to help patients assess the quality and service of health care providers
Emmanuel noted also that PPACA is already producing benefits. He pointed, for example, to provisions that permit adult children to remain on their parents’ health care policies until age 26 unless they can secure health care coverage through an employer; and to the 4 million $250 rebate checks the federal government is sending to seniors who occupy the Medicare Part D “doughnut hole.”
All of this sounds wonderful—until you assess the potentially negative consequences of the law.
Linda Gorman, director of the Health Care Policy Institute at the Independence Institute, a state-based free market think tank in Denver, Colo., said during the debate the Affordable Care Act will likely shut off promising health care reforms that have been underway in the states. She also contended that that law fails to contain health care costs as promised; and that it unnecessarily limits health care choices available to patients.
To illustrate PPACA’s constraints, Gorman noted that policies like the one she’s owned for the past 15 years are (except for those grandfathered under the new law) no longer permitted. PPACA, she asserted, will also prevent access to existing plans that are less costly and that offer greater choice.
Gorman cited consumer-directed health plans (CDHPs), which provide insurance for expensive health problems. To cover low-cost health issues, patients can dip into cash from tax-free health savings accounts. CDHP plan participants, she said, enjoy lower premiums and broader coverage than people on traditional health plans.
Other state-based market innovations that are reducing healthcare costs and yielding better care are threatened by PPACA’s “crushing regulations,” said Gorman.
Also of great concern to Gorman (as well as economists) is the Affordable Care Act’s impact on small businesses. Beginning in 2014, companies with 50 or more employees will be required to pay a “shared responsibility fee” if they don’t provide health care coverage to their workers.
This provision of the law could discourage employers from hiring people so as to avoid the 50-person threshold. And it could siphon off much needed cash to fund business expansion needs.
In sum, PPACA is potentially detrimental on multiple fronts, both in the health care space and the economy at large. And so further revisions to the law will likely be needed to minimize unintended consequences.