The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers
The struggles faced by Presidents Obama and Trump since the passage of the Affordable Care Act have created the impression that it’s impossible to successfully reform American health care. On the non-group market, premiums have soared, networks have narrowed, individuals have refused to enroll, and insurers have fled the marketplace. But despite the dysfunction of the market that was the primary focus of the ACA’s reforms, employer-provided coverage and the Medicare program have never been in better shape. Under those arrangements, which cover the majority of Americans, spending growth has abated, quality of care is improving, and premiums are rising at the slowest rate in recent memory. President Obama tried to claim credit for these trends, but they actually date to 2003, when President Bush pushed his own signature legislative achievement, the Medicare Modernization Act, through Congress.
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The health care industry killed Hillarycare in the 1990s and cut deals to shape Obamacare more to its liking in 2009. But now, as Republicans push a sweeping and widely reviled health bill through Congress, the industry has often appeared declawed in the biggest health care fight of the decade.
It’s a deliberate strategy, interviews with nearly 20 lobbyists and other experts suggest. Health industry groups generally don’t love Obamacare enough to jeopardize their ability to shape the rest of the Republican agenda — including big corporate tax cuts. They also fear incurring White House retaliation.
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Obamacare provides states with a greater incentive to expand Medicaid to able-bodied adults than to cover services for individuals with disabilities. States receive a 95 percent match this year (declining to 90 percent in 2020 and all future years) to cover the able-bodied, but a match ranging from 50-75 percentto cover individuals with disabilities, while more than half a million are on waiting lists to receive home or attendant care.
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Most people agree that Medicaid should help the poor, particularly those whose poverty is related to their age and disability. However, the Affordable Care Act requires the federal government to pay a much greater share of the medical bills for nondisabled, nonpregnant adults than it does for elderly individuals, people with disabilities, children, and pregnant women.
The share of state Medicaid spending paid for by the federal government—known as the Federal Medical Assistance Percentage, or FMAP—had remained relatively unchanged throughout the program’s history until Congress and the executive branch changed that share, providing a strong incentive for states to expand Medicaid coverage to this new population of nondisabled, nonpregnant adults.
The new FMAP formula and expansions created two significant problems:
- The federal government rewards states much more generously for providing services to individuals who fit the new criteria than to individuals who arguably are more in need of assistance
- The Medicaid expansion overlooks differences among states in their capacity to fund services for this new population, benefiting states with high per capita income at the expense of low-income states.
As it considers repeal and replace legislation, Congress should reexamine this arrangement. Congress should seek to devise a Medicaid financing structure that treats eligible populations equitably and recognizes the differences in fiscal capacity among states.
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According to Robert Wood Johnson Foundation data that looks at state markets where all insurers must sell plans that meet Obamacare standards, regardless of how they’re purchased, more than half of the 22 million people who buy their own insurance use Obamacare marketplaces, where most of them get a federal tax credit to help pay for coverage. The rest buy directly from an insurer or broker, and they do not get a tax credit. Supporters of the Affordable Care Act hoped the law would spur more competition among insurers across the country. But so far, the law has not delivered on that promise, especially in states that never had much competition. Even before Obamacare, there have always been two distinct markets: states that still have plenty of competition and states that rely heavily on one or two insurers. In 15 states, eight or more insurers offer Obamacare plans. They are mostly the same ones where no single insurer had a dominant share of the market in 2013, before the law was enacted. But the 19 states that currently have fewer than five carriers statewide are all ones where a single insurer had more than half of the overall market before Obamacare.
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In a new book aimed at anyone who wants to have the knowledge to evaluate what people are saying in the state and national health care debates, nationally known health policy expert Greg Scandlen provides clear, concise, common sense explanations of why generally accepted health policy ideas fail the reality test. A good guide to separating fact from fiction in the ideological battleground of US health care policy, Myth Busters: Why Health Reform Always Goes Awry provides the basic information needed to evaluate policy proposals and a useful roadmap for unwinding the policy mistakes of the past.
The book covers 30 health care myths, ideas widely believed to be true even though they are false. Unfortunately, these myths underlie the policy initiatives at the root of the last 50 years of US health care reform failure.
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Congress can and should still move forward with important health care reforms to ease the burden on millions of American businesses and workers. The National Restaurant Association and the one million foodservice locations they represent have urged elected officials to make a few basic changes to relieve the burdens on businesses that are stifling growth and impacting their ability to hire new employees. Regardless of the Republican bill’s passage, legislative and regulatory constraints imposed by the ACA continue to negatively impact restaurants.
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Americans view Humana Inc. and Aetna Inc. no less favorably after the industry giants announced their plans to pull out of the Affordable Care Act’s individual exchanges in 2018, according to Morning Consult Brand Intelligence data.
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Should Republicans be worried that they will lose control of the House in 2018 because they adopted legislation that repeals Obamacare? Don’t bet on it. Under the current House bill, states could let insurers take a person’s health status into account when deciding how much to charge in premiums. According to the media narrative, this would take away coverage from those with pre-existing conditions. The public furor over this allegation is predictable, but that does not make pre-existing conditions an existential threat to Republican political chances in the next election. The GOP plan protects everyone who remains continually covered by health insurance and they cannot be charged more if they have a pre-existing condition.
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For Linda Dearman, the House vote last week to repeal the Affordable Care Act was a welcome relief.
Ms. Dearman, of Bartlett, Ill., voted for President Trump largely because of his contempt for the federal health law. She and her husband, a partner in an engineering firm, buy their own insurance, but late last year they dropped their $1,100-a-month policy and switched to a bare-bones plan that does not meet the law’s requirements. They are counting that the law will be repealed before they owe a penalty.
“Now it looks like it will be, and we’re thrilled about that,” Ms. Dearman, 54, said. “We are so glad to feel represented for a change.”
The voices of people like the Dearmans helped spawn a political movement after the passage of the health law seven years ago.
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