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COMMENTARY

The Affordable Care Act: The Value of Systemic Disruption


It is important to recog- Ellen R. Shaffer, PhD, MPH
nize the political and policy
accomplishments of the IT IS IMPORTANT TO RECOG- as well as an avoidable cause of undocumented immigrants from
Patient Protection and Af- nize the political and policy ac- mortality,5,6 among the increasing these new coverage options and
fordable Care Act (ACA), an- complishments of the Patient Pro- number of the uninsured. Access offers reduced benets for those
ticipate its limitations, and
tection and Affordable Care Act to medical care helps to shape the legally present.
use the levers it provides
(ACA),1 anticipate its limitations, economic and social status of in- The law protects consumers
strategically to address
the problems it does not and use the levers it provides dividuals and communities, and from the most egregious insurance
resolve. strategically to address the prob- nancial barriers to health care company abuses. Insurance plans
Passage of the ACA lems it does not resolve. Passage of perpetuate inequalities rooted in that operate through the health in-
broke the political logjam the ACA was a historic political income, race, and ethnicity.7,8 surance exchanges must accept all
that long stymied national achievement, breaking the logjam Although most Americans get applicants and cannot set premiums
progress toward equita- that long stymied national prog- health insurance coverage from according to health status. The ACA
ble, quality, universal, af- ress toward equitable, quality, their employers, until now there eliminates copays and deductibles
fordable health care. It universal, affordable health care in has been no requirement that for preventive services such as
extends coverage for the the United States. It has survived employers provide it or that in- contraception, mammograms, colo-
uninsured who are dispro-
considerable challenges: a frac- surance companies accept anyone noscopies, immunizations, prenatal
portionately low income
tious legislative road to adoption for coverage. Prior to adoption of and new baby care, and annual
and people of color, curbs
health insurance abuses, in 2009 and 2010, more than 30 the ACA, individuals who were physicals for Medicare benecia-
and initiates improve- votes for repeal in Congress in not part of a large group found it ries, and expands the number of
ments in the quality of 2011 and 2012, a Supreme Court difcult or impossible to nd in- primary care clinicians and the
care. However, challenges case, and the national election of surance. People with health con- supply of services. However, it
to affordability and cost 2012. However, the benets as ditions could be turned away for places some restrictions on cover-
control persist. well as the limits of this compli- no other reason than the para- age for abortions.
Public health advocates cated law are poorly understood doxical one that they needed the The law limits the percentage
should mobilize for cover- by the public,2 and opposition will service, and they also could be of revenues insurance companies
age for abortion care and likely persist. In part, this is be- charged more if they succeeded in can spend on administration, as
for immigrants, encourage
cause major provisions of the law obtaining coverage. opposed to medical benets, and
public-sector involvement in
have not yet been fully imple- The ACA establishes universal gives the Secretary of the Health
negotiating health care pri-
ces, and counter disinfor- mented, in particular the expan- coverage for health care as a na- and Human Services Department
mation by opponents on sions of coverage through health tional goal and delineates the re- some leeway to reject excessive
the right. (Am J Public insurance exchanges and Medic- sponsibility of individuals, em- premium increases. States can
Health. 2013;103:969972. aid, although implementation will ployers, and the government to strengthen premium rate regula-
doi:10.2105/AJPH.2012. create other problems. In addition, contribute to its cost (Table 1). It tion. The new Independent Pay-
301180) the ideological and structural bar- has already extended health care ment Advisory Board proposes to
riers to a more functional health coverage for millions through pro- apply the beginning of delibera-
care system have been weakened visions such as continuing coverage tive payment rates in the Medi-
but not eliminated. for dependents on a parents health care system. However, the
plan through age 26 years. Begin- continuing role of the private
POLICY ACHIEVEMENTS ning in 2014, it will direct federal for-prot insurance industry and
OF THE AFFORDABLE funds to states that choose to par- corporate imperatives such as
CARE ACT ticipate to signicantly expand cov- consolidation among hospital
erage for very-low-income residents chains are likely to frustrate ef-
Health care absorbs an escalat- through the state---federal Medicaid forts to control health care ex-
ing proportion of government and program. Other uninsured individ- penditures. The ACA provides
private-sector spending, without uals and some employers will be signicant leeway to states
commensurate benets in health required to purchase private health to experiment with alternative
status and outcomes of care. Lack insurance through publicly admin- methods of nancing and orga-
of coverage for health care is too istered health insurance exchan- nizing health care, effective in
often a crushing nancial burden,3,4 ges. However, the law excludes 2017 (Table 2).

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COMMENTARY

bargaining muscle and the mission


TABLE 1The Affordable Care Acts Expansions of Coverage in 2014 Through Medicaid and Health to be effective and to streamline
Insurance Exchanges administrative complexity. Medi-
Program Characteristic Medicaid Health Insurance Exchange care at least partially lls this role
for most US residents older than
Provisions Covers comprehensive benefits for very-low-income Offers a menu of standardized private health 65 years and for some people with
people State/federal funding for benefits, insurance plans with stated benefits disabilities, and the Department of
administered by states State or federal government administers an Veterans Affairs sets or negotiates
exchange in each state prices for the health care services
Premiums paid by enrollees it provides for veterans.
Extensive federal subsidies and tax credits The ACA offers some avenues
available to individuals and small businesses. to wider-scale negotiations on cost,
Beneficiaries Everyone with income 138% of federal poverty Any individual > 200% of poverty not covered in a for example, through the adminis-
level ($14 856 for an individual in 2012)a group health plan as an employee or dependent tration of the exchanges, the ex-
Individuals whose job offers health insurance, but pansion of Medicaid, and the op-
premium exceeds 9.5% of income tion for state experimentation in
Businesses with 50 employees 2017. But at least initially, the new
Employers with > 50 employees pay a penalty for exchanges can offer only private
employees who enroll through an exchange health insurance plans, with no
because employers plan is too expensive option to buy into a new public-
Potential new enrollees 17 million 25 million sector plan or Medicare; participa-
New elements States may no longer exclude people on the basis Participating plans must accept any applicant tion will be limited initially to in-
of incomes lower than 138% of poverty; count Every individual without another source of dividuals and small employers,
any asset, including a car, as part of income; coverage must purchase it precluding a bargaining alliance
or require other categories of eligibility, typically Members of Congress and their staff with and among large employers.
having children or a severe health condition must use the exchanges for coverage Two questions then arise: What
State and federal roles Federal government pays states for coverage of States may establish exchanges factors have impeded more compre-
newly eligible, at 100% for 20142016, 90% Federal government will operate in states that hensive reforms, namely, universal
by 2022 decline coverage, and effective cost controls?
Federal government pays for higher reimbursement What can be done to overcome
rates for primary care providers these obstacles in the future?
States can choose to accept or decline expanded
coverage and federal funds ENTRENCHED INTERESTS
Limits Some states intend not to participate Limited levers to ensure affordable prices
Perpetuates separate system of coverage for All participating insurance plans are private It is both humane and cost-
low-income people Larger employers cannot participate until 2017 effective to ensure that whole
Undocumented immigrants cannot enroll populations receive compre-
a
Level set at 133%, but an offset brings it in practice to 138%. hensive health care. It costs
more to keep some people un-
insured than it does to cover
LIMITS OF THE LAW access to affordable coverage or performance, such as reducing everyone.
they choose to pay a penalty rather payments to hospitals that readmit Organized medicine, for-prot
Most analysts agree that the law than purchase health insurance. patients soon after discharge, are hospitals, and the pharmaceu-
will have limited effectiveness at This number may be higher if ineffective if no clear source of tical and insurance industries
controlling health care expendi- some states do not implement the reimbursement is in place. prot from the absence of uni-
tures, for 2 related reasons. The Medicaid expansion. This leaves A second obstacle is that the versal coverage. The resulting
ACA will leave a substantial num- a rotating pool of uninsured indi- most effective methods for con- instability allows them to create
ber of residents uninsured. An viduals at continued risk for illness trolling health care costs involve and administer complex systems
estimated 26 million people will and nancial hardship. In addition, authorizing the government to for categorizing customers and
remain uninsured in 2016,9 providers cannot plan how to negotiate prices with health care to charge different customers
among them immigrants and peo- charge or pay for the uninsured, providers, including hospitals different prices. In addition,
ple who are exempt from the who will ultimately require care. and pharmaceutical corporations, employers and some labor
mandate because they do not have Systems to align payment and as the only entity with the unions have asserted their

970 | Commentary | Peer Reviewed | Shaffer American Journal of Public Health | June 2013, Vol 103, No. 6
COMMENTARY

TABLE 2Implementation Timeline for the Affordable Care Act


Year Increase Coverage and Access to Health Care Protect Consumers Improve Quality and Lower Costs

2010 Preexisting condition insurance plans offer coverage to uninsured No preexisting condition exclusions for Eliminate copays and deductibles for
Extend dependent coverage to young adults up to age 26 years children younger than 19 years preventive services (commercial plans
Tax credit up to 35% for small businesses that offer insurance Insurance companies cannot drop and Medicare)
Expand primary care workforce via Public Health and Prevention Fund coverage midstream (no rescissions) Crack down on health care fraud
Eliminate lifetime caps on coverage Close Medicare drug gap with $250 rebate
New independent appeals process, with $5 billion federal fund will subsidize
grants to states for offices of health high-cost medical claims of early retirees
insurance consumer assistance
HealthCare.gov and CuidadodeSalud.gov
offer consumer information
2011 Increase number of primary care doctors, nurses, nurse practitioners, Require medical loss ratio: insurance Close Medicare drug gap with 50%
physician assistants through new investments plans must pay 80%85% of revenues discount on brand-name prescription drugs
Expand community health centers for subscribers health care, or pay rebates States can require insurance companies to
submit justification for requested premium
increases, adding transparency and
strengthening state oversight of premiums
Connect Medicare payments to quality
outcomes
2012 Establish Medicare Independence at Home demonstration program Department of Health and Human Services Establish Independent Payment Advisory
for chronically ill Medicare patients. must set regulations on requirements for Board for Medicare
Increase Medicaid payments for primary care services. health plan quality reporting
2013 Increase funding for Childrens Health Insurance Program Limit tax deductibility of compensation to Expand Medicare authority to bundle payments
Expand small business tax credit health insurance company executives
2014 Insurance exchanges available for individuals and small businesses Eliminate discrimination for preexisting Changes in Medicare delivery system; implement
Allow Medicaid to cover everyone 133% of poverty condition or gender cost containment policies
Individual coverage mandate begins; insurance can be purchased Eliminate annual caps on coverage
through exchanges; subsidies available for persons 400% of poverty

interests in keeping workers de- medical services have withered in of coverage through an individ- THE VALUE OF SYSTEMIC
pendent on the workplace for the face of opposition from the ual mandate and other provi- DISRUPTION
health insurance.10 health care industry. sions infringes on Americans
Identifying equally powerful Ideological messages that freedom from government Structural factors tend to rig
constituencies capable of mar- present and defend corporate bureaucrats.12 the US political system against
shaling countervailing political prerogatives as a matter of per- The House majority spent tectonic changes, regardless of the
momentum has always been sonal, individual choice underlie an unprecedented number of days particular issue at hand. Decision-
complicated in the United such perverse arguments as (1) in votes and hearings attacking making power is divided among
States. Since the 1980s, trans- people deserve only the health reproductive health care and the three branches of the federal
national corporations have care they can pay for individually, rights, including threats to defund government, as well as state and
campaigned aggressively to and (2) government authority is Planned Parenthood. Speaker local jurisdictions.13 Disadvan-
defund government and under- equivalent to tyranny, whether Boehner charged that a regulation taged populations lack avenues
mine and discredit its functions, used to compel individual contri- requiring coverage for contracep- readily available to the wealthy
including its role as provider, butions to pay for health care tion on the same terms as other to pursue power and change,
protector, or regulator of health or to set health care prices. For preventive health care benets for reinforcing the tendency toward
care and other social services.11 years after the ACA was adopted, women, such as screenings for the status quo.14 Even incremen-
Measures authorizing the public the media echoed charges by HIV/AIDS and pregnancy-related tal steps to advance the publics
sector to negotiate, set, or other- House of Representatives Speaker diabetes, was a government intru- interest, if they challenge nan-
wise constrain the prices of John Boehner that the expansion sion on freedom. cial or corporate interests,

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require extraordinary feats of progressive proposal for compre- public. Advocates need to think Foundation. 2010. Available at: http://
www.kff.org/uninsured/upload/1420-12.
political legerdemain. hensive reform that Senator Paul strategically about how to create
pdf. Accessed December 22, 2010.
In this context, 2009 presented Wellstone introduced in 1993, and pursue opportunities at the
5. Wilper AP, Woolhandler S, Lasser KE,
a rare window of opportunity. which he and I described: state and national levels to expand McCornick D, Bor DH, Himmelstein DU.
President Barack Obamas leader- coverage, improve the quality of Health insurance and mortality in US adults.
[F]ree choice of providers, in- Am J Public Health. 2009;99(12):1---7.
ship in 2009, and his extensive cluding consumer-oriented man- care, and mobilize support to im-
6. Bernstein J, Chollet D, Peterson S.
compromises with most of the in- aged-care plans; streamlined and plement these provisions, while
How does insurance coverage improve
dustry, achieved an uneasy but publicly accountable administra- developing strategies to secure the health outcomes? Mathematica issue brief.
tion; universal coverage based on
ultimately effective alliance that stronger government authority April 2010. Available at: http://www.
residency instead of employ- mathematica-mpr.com/publications/PDFs/
propelled the legislation to Con- ment; comprehensive benets that will eventually be necessary
Health/Reformhealthcare_IB1.pdf.
gress. Opposition challenges man- with an emphasis on primary and to control health care prices and Accessed December 22, 2010.
ifested through such groups as the preventive care; quality controls expenditures, counter the inu- 7. Lillie-Blanton M, Hoffman C. The
based on outcomes data and
Tea Party were countered by ence of the for-prot insurance role of health insurance coverage in re-
designed with the involvement of
ducing racial/ethnic disparities. Health Aff
community coalitions and labor providers and patients; equitable industry, and ensure affordability.
(Millwood). 2005;24(2):398---408.
groups, many mobilized and rein- nancing; and affordability.17(p1489) The demand for affordable health
8. Health reform and communities of
vigorated by the 2008 election care, available to all, remains color: implications for racial and ethnic
The Wellstone---McDermott---
campaign. One critical example a matter of social and economic disparities. Kaiser Family Foundation.
Conyers bill prominently called for September 2010. Available at: http://
was the online Virtual March on justice and human rights. j
public nancing and xed federal www.kff.org/healthreform/upload/
Washington, which generated 8016-02.pdf. Accessed December 22,
health care budgets and would
a record 1.2 million pro-reform 2010.
have virtually eliminated prots in About the Author
messages to Congress on February Ellen R. Shaffer is with the Center for Policy 9. Kaiser Commission on Medicaid and
health care, policies that are not the Uninsured. The Uninsured: A Primer.
24, 2010, just before the presi- Analysis, San Francisco, CA.
part of the ACA. At some point, we Correspondence should be sent to Ellen R. Key Facts About Americans Without Health
dents televised summit with con- Insurance. Washington, DC: Kaiser Family
Shaffer, Center for Policy Analysis, EQUAL
gressional Republicans.15 will face a reckoning with the in- Foundation; 2012.
Health Network, San Francisco Presidio,
Nevertheless, passage in Con- evitably pernicious and inationary PO Box 29586, San Francisco, CA 10. Baucus M, Fowler EJ. Perspective:
gress required extraordinary pro- inuence of the for-prot private 94129-0586 (e-mail: ershaffer@gmail. geographic variation in Medicare spend-
com). Reprints can be ordered at http://www. ing and the real focus of Medicare reform.
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ajph.org by clicking the Reprints link. Health Aff (Millwood). 2002.
and Senate leadership.13,16 Some though imperfect, paves the way This commentary was accepted
11. Marmor TR. The Politics of Medicare.
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2nd ed. New York, NY: Aldine de
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belief that failure to do so would which they can occur. Acknowledgments 12. Boehner J. Speaker Pelosis govern-
Thomas Rice, the editors, and anonymous ment takeover of health care will dim the
result in their party losing its con- reviewers provided helpful comments on light of freedom. Floor speech, US House of
gressional majority, and thus its A STRATEGY FOR early drafts of the article. Joe Brenner Representatives, November 7, 2009.
control of committees, in the 2010 FURTHER PROGRESS made helpful comments on all drafts. Available at: http://boehner.house.gov/
Communications with Paula Braveman news/documentsingle.aspx?DocumentID=
elections, as occurred in 1994 and with associates of the Center for 154035. Accessed January 20, 2013.
when the majority-Democratic Faced with attacks 2 years run- Policy Analysis offered illuminating in-
13. Starr P. Remedy and Reaction. New
sights and information.
Congress failed to act on President ning on the ACA, reproductive Haven, CT: Yale University Press; 2010.
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972 | Commentary | Peer Reviewed | Shaffer American Journal of Public Health | June 2013, Vol 103, No. 6