The Affordable Care Act and its reform are causing confusion. Here’s what we know.
It covers more people than did the free market system and changes some of the terms of insurance policies, but it does not abolish the market.
Conservatives dislike it because they believe it substitutes government for the free market, costs too much and requires participation.
Progressives like it because it partly substitutes government for the free market, which did not cover millions of people.
Everybody agrees it needs to be fixed.
There are fundamentally only two ways to provide health care insurance to people.
In the U.S., the traditional approach was insurance sold by private carriers. People could choose among policies the companies offered, choose not to be insured, or simply couldn’t afford insurance. Competition among insurers would supposedly control prices. The system was mainly financed by insurance premiums.
In other developed countries, government is the insurer, providing coverage to virtually all people. Government, the “single payer,” pays the bills. As the only customer, the government can control prices and costs. The system is financed by taxes, which replace insurance premiums.
The American system includes elements of single payer: Medicare for older people and the Veterans Administration.
The traditional American system left too many people without coverage, but the single payer system approach was widely considered to give too much power to the government while destroying a key element of free enterprise – competition.
By 2010, Congress included enough Democrats and President Obama to move away from a pure market system, but not to a single payer. Congress would not allow government even to provide a nonprofit competitor in the market. The result was a compromise that shows the defects of a hybrid.
In 2017, Congress includes enough Republicans and President Trump to restore some or much of the market system, allowing competition to attract people to insurance rather than a government requirement. Some elements of the ACA might be allowed to survive.
The ACA imposed some new costs resulting from the inclusion of tens of millions of previously uninsured people and required additional features, like guaranteeing coverage for pre-existing conditions.
It does not control drug or hospital costs, which to continue to rise, though at a slower rate. The new ACA costs are financed by new taxes, mainly levied on the wealthiest taxpayers. Republicans would repeal those taxes.
Rising costs, accompanied by limits on what insurers can charge despite higher premiums, are causing insurers to leave some markets. Trump and GOP critics say that shows the coming collapse of the ACA.
Strong right-wingers don’t want reform; they want repeal. Outright repeal now may be impossible because the program is established, and many previously uninsured people are not only becoming accustomed to it, but find they like it.
Like Social Security, which was once similarly challenged, it may become an integral part of American life. If the ACA cannot be killed now, strong conservatives reckon, it will never be ended.
One element of the ACA that gets much attention is the financial aid offered to states, allowing them to expand Medicaid to include many more low-income people. States could turn this money down, but even many Republican-led states accepted it to provide help to their low-income uninsured.
In Maine, Gov. LePage has thus far successfully blocked the state from accepting more federal Medicaid funds. This year, a referendum could allow Maine voters to expand Medicaid, known as MaineCare, without the governor’s agreement.
As Congress considers the ACA, a conflict exists between those who favor repealing as much as possible and others whose constituents have come to rely on it. Sen. Susan Collins has tried to lead Republicans toward a state-by-state compromise that serves both sides, but it seems to have no chance.
Neither she nor Sen. Angus King is inclined to agree to a deal that strips Maine people of coverage.
Health care costs are increasing and with them insurance premiums from Medicare, the ACA and insurers. Unless costs are controlled, the health care tab will become impossible to pay under the free market, single payer, or anywhere in between.
As a start, when government gives drugs a monopoly, it should be possible for government to impose price controls on greedy pharmaceutical companies. That would be a huge reform in itself.
Whatever happens in Washington, states may adopt their own health care insurance programs. After all, Massachusetts adopted a program in 2006 that became the basis of the ACA. That state now has the lowest rate of uninsured in the country.