Most of the provisions in the Affordable Care Act don’t kick in for a few years, but in the meantime, we’re already seeing indications that the law is working as intended.
We talked yesterday about the fact that the number of young adults — those between the ages of 19 and 25 — with health care coverage has gone up considerably, thanks to the new law’s consumer protection reforms. It comes on the heels of reports that the Affordable Care Act is a positive impact on slowing the growth in Medicare spending — a priority Republicans pretend to care about — as hospitals transition to a greater focus on value and efficiency, required under the ACA.
It turns out these aren’t the only signs of progress. Among the many arguments Republicans pushed during the health care debate was the notion that the ACA would crush Medicare Advantage. We can now add this to the (extremely long) list of arguments the GOP got wrong.
Medicare Advantage is the program that gives seniors the option of enrolling in private insurance rather than the traditional, government-run program. The government pays the insurers a flat fee, per enrollee; in return, the insurers provide coverage, sometimes including benefits that traditional Medicare does not. Overall, about one in four seniors belongs to such plans.
The policy rationale for Medicare Advantage is two-fold: To give seniors more options and to introduce some private-sector competition. The idea is that private insurers might be able to be more innovative or offer certain combinations of services that some seniors would prefer. But, for much of its history, the program (formerly known as Medicare-plus-choice) was also a form of corporate welfare. Non-partisan studies, by the likes of the Medicare Payment Advisory Commission, suggested that the government was paying the insurers too much.
The architects of the Affordable Care Act decided, quite sensibly, to reduce those extra subsidies and use the money to offset part of the law’s cost. That’s when the Republicans, and their allies, pounced. Taking money away from the insurers, they claimed, would force insurers to charge more, limit their offerings, or pull out of the market altogether.
As of this morning, it looks like Republicans flubbed this one, too. After reviewing new data from the Center for Medicare and Medicaid Services, which found premiums going down and enrollment going up, HHS Secretary Kathleen Sebelius told reporters, “On average, Medicare Advantage premiums will go down next year and seniors will enjoy more free benefits and cheaper prescription drugs.”
We were paying too much for Medicare Advantage, so we’ve cut costs. The program is, however, still profitable and attractive for private insurers.
In fairness, we’ll need more time to see if this trend holds. It may not. What’s more, not all of the news regarding the law has been positive, as evidenced by an AP report today on cost concerns about the Community Living Assistance Services and Supports program (CLASS).
But overall, most of the initial evidence — on expanding access and coverage, on keeping costs down, etc. — suggests the Affordable Care Act is working. The right doesn’t want to hear that, but it’s true.