We understand why President Obama trumpeted the killing of Osama bin Laden while barely mentioning health reform, his most significant domestic accomplishment in his State of the Union address last week. Ten years after 9/11, the killing of Bin Laden was an indisputable triumph for President Obama, welcomed by almost every American. In contrast, the Patient Protection and Affordable Care Act (ACA), enacted with only Democratic votes by the scarcest of margins in 2010, remains a complex, highly controversial piece of legislation with outcomes and costs that remain to be seen in the years ahead.
Yet surprising even to many advocates of health care reform, evidence is emerging that the ACA is already improving life for millions of average Americans. It is promoting long-overdue fundamental changes in our dysfunctional medical system. Moreover, because those reforms are starting to directly address heightened economic insecurities of average families – the personal financial conditions that will largely determine this year’s election outcomes – President Obama would be wise to more forcefully and more specifically explain how his health care bill is already helping millions of vulnerable families and the country as a whole. Sure, financially-pressured families will celebrate the derring-do of Seal Team Six. They should directly appreciate the immediate impact of improved insurance coverage and reduced medical costs.
Here are five concrete realms in which the Affordable Care Act, which won’t even take full effect until 2014, has already had an impact:
About 2.5 million more young adults are now insured because of the new law. The Affordable Care Act allowed individuals up to age 26 to remain on their parents’ employer-based insurance plans with substantial protections for individuals with preexisting conditions. These young adults can be married, living on their own or in school, and even holding a job. Figure 1 below was produced by experts in the Department of Health and Human Services, tells the basic story. These provisions began to take effect on September 23, 2010, and right around that time health coverage for young adults began to sharply improve, even as coverage for slightly older workers showed no similar break.
The importance of these changes goes beyond the gratifying coverage trends—though it’s hard to recall such dramatic favorable change associated with a specific policy coming into effect. Millions of young adults suffering from cancer, cardiac conditions, diabetes, major depression, autism, intellectual disability can obtain decent and affordable coverage through their parents’ employers, thus avoiding the deeply-troubled market for individual and small-group insurance coverage.
These provisions complement other ACA provisions, which right now provide unprecedented protections for children and adolescents. Insurance plans that cover children can no longer exclude, limit, or deny coverage to children under the age of 19 solely based on a preexisting condition.
Individuals with pre-existing conditions have greater access to coverage. In addition to the above-noted protections for young people, lifetime coverage limits on most essential benefits are now banned, with annual dollar caps phasing out. This year, no insurance plan can set an annual dollar limit lower than $1.25 million. For families dealing with catastrophic illnesses, such provisions are essential to prevent medical bankruptcies or the loss of the family home because of medical bills. Tens of thousands of previously-uninsured Americans suffering from serious illnesses now benefit from the new law’s imperfect but valuable Preexisting Condition Insurance Plans (PCIP), which assist the medically uninsured.
Structural changes are already making the health care system more efficient. A recent survey of companies by the benefits consulting firm Mercer found that “employers are accelerating their efforts to bring health benefit cost under control,” with the anticipated spending per employee expected to increase at its lowest rate since 1997. Beth Umland, Mercer’s director of research for health and benefits, said, “While cost-shifting to employees is still going on, this year we saw more employers adopting strategies that they believe will provide better results over the long haul.” An astonishing 87 percent of large employers said they will add or strengthen programs to encourage more health-conscious behavior. By setting in motion such restructuring, health care reform is already helping to transform a status quo that had become unsustainable.
The ACA cannot yet be credited with the significant slowing in the growth rate in U.S health care spending over the past two years, a pattern which is closely related to the economic downturn. Yet new and impending rules enacted in the ACA have already induced health care providers and insurers to implement a wide array of structural changes to address fundamental waste and inefficiencies associated with our fee-for-service medical system. The act also includes strong measures to detect and punish fraud and abuse. These measures have produced a record number of actions against unethical or criminal abuse of the Medicare program.
Dartmouth College researchers report that almost 100 provider organizations are already working with private health plans toward contracts to create “accountable-care organizations,” which would shift away from the fee-for-service approach that leads toward over-spending to one in which payments are linked to positive patient outcomes. Thirty-two pioneer ACOs have been announced publicly. Across the political spectrum, experts have hailed ACOs as a critical innovation.
Other, readily-overlooked ACA provisions are also producing tangible benefit. These include tax credits to small firms that insure their workers, subsidies for early-retiree coverage, safety-net investments in Federally Qualified Health Centers, and provisions that allow states to extend Medicaid to low-income childless adults.
The Affordable Care Act brings greater fairness, transparency, and integrity to private insurance. The ACA changes the basic business model of private insurance. Firms will no longer prosper by cherry-picking healthy consumers or denying coverage for basic care. The federal government now partners with states in scrutinizing large insurance plan rate increases. Such heightened public exposure and regulatory scrutiny has already induced major plans to moderate or to reverse large rate increases. Patients also are now entitled to greater due process, including external review, when their health plan fails to cover medical therapies. Because of “medical loss ratio” regulations, insurers are now required to devote the lion’s share of their premium dollars to patient care.
President Obama’s health care reform has radically transformed the status quo and provoked such bitter political battles with moneyed interests. His political advisers and pollsters can be forgiven if they feel some skittishness about attracting further controversy related to the ACA. They understandably and rightly wish to focus on issues of jobs and economic security. Yet secure access to affordable health care is intimately related to these latter economic concerns. The ACA’s full benefits won’t be felt until 2014. Yet the measures now in place are proving more important and more valuable than even many ACA supporters realize.
Health reform has already improved the humanity and effectiveness of our health care system. President Obama is entitled, and obliged, to embrace his own signature domestic policy accomplishment.