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Would another $500B fix PPACA?

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The Patient Protection and Affordable Care Act is working, but it will work even better with more money, says a left-leaning think-tank. Half a trillion dollars would do the trick.

“The ACA was passed under tight budgetary constraints given its ambitious coverage goals and it is essentially underfunded in multiple ways,” argue Linda J. Blumberg and John Holahan of the Urban Institute. “This underfunding has implications for health care affordability for families, and it also means that administration of the law has been shortchanged.”

One of the main challenges is the cost of health plans for low-income adults. While PPACA has spurred millions to sign up for health insurance, the costs of many PPACA plans may still be too high for some currently uninsured people to shoulder. In addition to high premiums, many plans demand a high level of cost-sharing in the form of deductibles or co-pays. Some people, suggests the report, may decide the insurance is simply not worth it.

The government is not spending enough to lower the costs of insurance for low and middle-income people, the report argues. In addition, it says that more money should be devoted to bolstering the administration in charge of overseeing PPACA, which encountered a rocky start largely due to a faulty and overburdened website.

Among ways to raise money for the additional spending, the report proposes raising the federal taxes on cigarettes and alcohol, as well as increasing the Medicare payroll tax.

The report also concluded that while the individual mandate is critical to the law’s success, the employer mandate may be worth scrapping.

“It contributes little to expanding coverage, can create labor market distortions, and has resulted in significant business opposition to the ACA in general,” the report said. “Eliminating the employer mandate could improve support for the law from an important constituency without compromising the law’s central goals.”

Last week, the Urban Institute published another report rebuking complaints that PPACA had led to a dramatic increase in health care costs. The increase in health care spending was due largely to more people purchasing health insurance, the Institute argued. 

See also:

CMS gives 2016 exchange plan reporting details

PPACA World: Employer blindfold?