Friday, April 07, 2017

The Affordable Care Act: Examining the Facts by Purva Rawal (Book Review #5 of 2017)



The Affordable Care Act: Examining the Facts (Contemporary Debates)

So, given I work for a Medicaid managed care company (the best one, by the way), was really close to Medicaid budget and policy in an Expansion state under both a Democratic and Republican administration, and spend much of my free time reading KFF, Health Affairs, etc. it only made sense that I read the definitive book on the Affordable Care Act. Because a part of me thinks it's still useful to have well-informed policy debates even in 2017 when facts don't seem to matter.

This book is a great compilation of every policy argument, budget analysis, and the history of the years-long negotiations and political wrangling of passing the Affordable Care Act. At the time I read it, there was not a single review on Amazon under five stars. The author is partial to the ACA, having worked as an analyst in its passage. This causes her to leave out tidbits like the "Cornhusker kickback," but to attack various Republican myths and scaremongering related to the ACA. Previous to this, I'd read Steven Brill's America's Bitter Pill on the history and passage of the ACA (with focus on Kentucky's exchange rollout), Jonathan Alter's The Center Holds along with Axelrod's memoir that recounts a lot of the politics (Mitch McConnell's memoir as well, though briefly). I've also read books on Medicaid by both Brookings Institute and Avik Roy. This book recounts all of the negotiations with multiple parties and the budget math behind the ACA and answers every claim about the ACA in a chapter-by-chapter Q & A format.

I made a lot of highlights in this book (61 pages of Google Doc highlights), it's a bible of ACA information and stats. Here are just a few points:
People forget the context under which the ACA was passed, the wake of the Great Recession. Health care reform was a centerpiece of the 2008 election, both sides were going to do something radical-- even John McCain's plan would apparently be anathema in 2017's political world after the rise of the Tea Party.

"A record nearly 50 million individuals were uninsured in the wake of the Great Recession, and health care costs accounted for nearly 17 percent of Gross Domestic Product" (p. 16). In 2008, the debate was about healthcare inflation including rising premiums, people--including children-- being denied coverage for reasons that came down to prexisting conditions, and hospitals and other providers complaining about complaining about indigent care because not enough had insurance. Republicans, in particular, were concerned about the national debt driven largely by projected increases in Medicare. How do you get insurance companies to cover more people and conditions, get more people to pay for coverage, and get the least-likely to sign up into coverage, all the while not increasing the long-term debt situation? Well, in a rational world you gather proposals from health care economists, negotiate with managed care entities and insurers, and wrangle with the various budget committees in Congress to find a way to get it to pass. The work began in bipartisan fashion.

"Chairman Baucus and Ranking Member Grassley (R-IA) plotted out a bipartisan process to craft a health reform bill. The pair held three roundtables on the main pillars of the legislation—coverage expansion, payment and delivery reforms, and financing options. Following each roundtable, the committee publicly released reform options...In addition to informal involvement, the President held numerous meetings with members of both sides of the aisle" (p. 29, 31).

As the details took shape, so did much of the buy-in from the healthcare industry.
"The pharmaceutical and hospital industries publicly announced agreements with the Senate Finance Committee and the Administration in the summer of 2009" (p. 34). The author details what each industry got and offered. "The device tax is still the most contested of the industry fees or payment cuts as the sector continues to push for repeal of the tax" (p. 38). Grassley pushed for and got Medicare payment and service delivery reform, meaning the ACA would be able to reduce Medicare spending. Although Republicans had wanted to reform Medicaid for years, they blamed Obama for "cutting Medicare to seniors" when this goal was achieved via the ACA.

No piece of legislation is perfect, and anything large takes grease to get through. The more grease, the worse it gets. You bring big pharma along by requiring all insurance to provide prescription drug coverage. You bring hospital associations along by promising more people will show up at the ERs with insurance. You promise Senators something for their home town, etc.

There were flaws in the final version of the bill, in part because of all the concessions made to get it passed. Premium subsidies likely needed to be larger and more available to those over 400% of FPL. There needed to not be such a cliff of premiums and deductibles for a family going from 138% of FPL to 139%. There also needed to be a mandate with consequences to ensure the young & healthy jumping into the pool. Exchanges only worked because risk corridors worked like reinsurance. When Marco Rubio and Republicans kicked those out from under the exchanges, of course they collapsed.

"To protect against the uncertainty in the risk in the health insurance exchange markets, the ACA included three mechanisms—risk corridors, reinsurance, and risk adjustment—collectively known as the 3Rs. The first two are in effect from 2014 through 2016, and risk adjustment continues in perpetuity"  (p. 236). This idea was nothing new, and similar method was used to stabilize the market in the Republican-passed Medicare Part D a decade prior. But it's now clear that these risk corridors were required to keep insurers in the exchanges. The more uncertainty Congress has now created about what 2018 will be like, the worse it gets.

The author notes that the $15 billion public health fund that partly went to fund the Navigators was a controversial use of the funding, and Republicans quickly made it a priority to stop that, calling it a "slush fund" and working in states like Kentucky to end funding for any marketing efforts for Medicaid or the exchanges. Likewise, even though Congress worked hard to keep abortion out of the bill, Republicans alleged the ACA made abortion funding more prevalent.
"To try to avoid an abortion-related debate during health reform, lawmakers applied the long-standing Hyde Amendment, which prohibits the use of federal funds for abortion unless the pregnancy is a result of rape or incest, or the woman’s life is in danger. In addition, the ACA does not preempt state abortion laws, such as waiting periods or parental consent or notification (Salganicoff, Beamesderfer, and Kurani, 2014). However, the claims that the ACA would fund abortions—and increase funding to abortion providers—have continued" (p. 274).

Rawal's greatest criticism of President Obama is his promise that "If you like your plan, you can keep it," which would always be impossible given that the ACA adds the ten Essential Health Benefits to every plan. I personally found the politics behind delaying the mandate a year and allowing people to keep plans as grandfathered problematic-- it created more uncertainty in the insurance markets. But much of the criticism belongs to Republicans, particularly long-serving ones who flipped their positions on certain aspects of reform:

"Senators Orrin Hatch (R-UT) and Charles Grassley (R-IA). In 2009–2010 both of these men were still in the Senate, and they both sat on that body’s powerful finance committee. But their opposition to the ACA led them to denounce the very individual mandate that they had once praised. In 2009, days before the ACA passed the Senate, Sen. Orrin Hatch (R-UT) voiced his opposition to the individual mandate, 'Congress has never crossed the line between regulating what people choose to do and ordering them to do it. The difference between regulating and requiring it is liberty' (Hatch, 2009)" (p.305).

Given the hyper-partisan Congress in 2017 and the failure we have seen in recent weeks of Republicans to reach an agreement on what should be done about Obamacare after 7 years of vowing to repeal it, I'm largely convinced that the Affordable Care Act will be the last bill ever to pass Congress with this level of complexity. This book deftly explains the complexity, economics, and politics that went into this legislation.

Five stars. A must-own if you want to have all the information through 2015 about the ACA at your fingertips.

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