While the Supreme Court’s decision in NFIB v. Sebelius largely lifted the constitutional cloud over the Affordable Care Act (ACA), a darker cloud looms—it is not clear at all that the ACA will serve its purposes effectively. Indeed, the real threat to implementation of the Act lies in its own design flaws.
Historically, health care rights in the United States have been unstable and vulnerable to erosion over time. The ACA does not change this fundamental weakness in the American health care system. Rather than creating a more stable right to health care, the Act gives unstable rights to more people.
Health care rights have been unstable for a number of reasons, but two in particular put the ACA at risk. First, the Act gives a right to coverage, not care. As with Medicare and Medicaid, the government will not actually provide care to patients; it simply will ensure that patients have insurance to pay physicians and hospitals who do provide care. Second, the ACA retains the two-tiered system of health care in this country in which the well-to-do can rely on private insurance while the less-well-off have to rely on a publicly-funded program.
An unstable promise of coverage. The problem with a promise of coverage rather than care can be illustrated by the Medicaid program. The government pays the bills for Medicaid recipients, but they still must find physicians who are willing to accept them as patients. For many recipients that can be a daunting requirement, especially for specialty care. Reimbursement rates under the Medicaid program lie well below those of private insurers, and physicians often take a loss providing care to Medicaid patients. As health care costs continue to rise and Medicaid programs contain costs by limiting their reimbursement rates, difficulties finding physicians may only get worse, especially with the inadequate supply of primary care physicians.
Segregating coverage by income. The ACA’s right to health care will be unstable for a second, more important reason. Under the Act, the interests of lower-income people are divorced from the interests of the well-to-do. When the ACA expands access to health care coverage, it does so for the poor or other lower-income families. The financially secure will continue to receive health care coverage from their employers, or will purchase it on their own. Thus, those who are better off may view the ACA as another social welfare program for which they help pay but that mostly serves other people.
Unfortunately with governmental programs like that in the United States, there generally is not sufficient political support to ensure adequate funding over time. The poor have little influence in the halls of Congress or the statehouses, and the wealthy lack enthusiasm for programs that benefit only the poor. Thus, programs like Social Security and Medicare that serve recipients at all income levels are far more successful than programs like Medicaid or public housing, which target the indigent.
Republican attacks on the ACA’s funding exploit the vulnerability of policies that address the needs of the poor. By characterizing the Act as a transfer of funds from Medicare to Obamacare, the GOP can pit the interests of lower-income persons against the interests of others.
Getting Everyone Into The Same Boat
Is there a way to more closely tie the fortunes of the poor with those of the wealthy? A “Medicare-for-all” program would do that, but single-payer systems are not politically feasible. Alternatively, Democrats and Republicans might find common ground on a plan much like the Wyden-Ryan voucher proposal for Medicare—the health care reform proposal of the Committee for Economic Development. The Committee recommended a voucher-for-all plan that holds considerable promise and that relies on a few requirements to ensure its effectiveness.
First, the voucher could be used only for health care plans that meet minimum federal standards. Just as private insurers have to satisfy minimum standards to participate in the benefits program for federal employees, so would insurers have to satisfy minimum standards before they could accept a voucher.
Second, insurers would not be able to discriminate against persons with pre-existing medical conditions by charging higher premiums. To prevent insurers from trying to “cherry pick” individuals with low health care costs, health plans would have to accept vouchers from all comers, and payments to plans would be adjusted according to the health status of their customers, a process that has worked well in the Netherlands to discourage cherry picking.
Third, the voucher would be worth the full cost of the lowest-priced plan, with individuals paying out of pocket for the extra cost of a higher-priced plan. Because most people would not want to pay extra for their health care, insurers would have a strong incentive to offer the lowest-cost plan, year in and year out. This would give insures a continual incentive to contain health care costs.
Fortunately, the Supreme Court has not let the Constitution stand in the way of health care reform. But Congress and the president need to do more to ensure that all Americans will have reliable access to care.