The Affordable Care Act’s Delicate Balance Is Causing Its Demise

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In the run-up to the 2016 election, Bernie Sanders ran an audacious campaign to upset a candidate who for nearly eight years was the presumed shoe-in for the Democratic nomination. Sanders’s unwillingness to shroud his positions in the ambiguous language that usually defines presidential platforms fueled his campaign. This unwillingness captured the hearts of stalwart leftists. Short, spirit-stirring slogans and catchphrases are common in political races of all stripes. However, the Sanders campaign was especially defined by their use of sloganry, chiefly the constant refrain: healthcare is a human right. While this assertion does not seem out of place to us in the current political environment, an observer from 2009 might be confused. After all, the passing of the Affordable Care Act brought the United States its biggest overhaul of the healthcare system since Lyndon Johnson’s ambitious formation of Medicare and Medicaid. Why is it that only 9 years later, healthcare reform seems to have taken an even bigger role in national political discourse? Well, the designers of the law saw it as a daring effort to merge robust government funding and regulation with a functional private health insurance industry. It was meant to assuage the concerns of the left wing, which had called for government intervention to lower healthcare costs for low- and middle-class Americans, while pacifying the right wing by preserving the breadth and independence of the burgeoning American private healthcare industry. Instead of completely doing away with private healthcare, as many other nations have done, President Obama decided to try to meet both sides on a middle ground. The ultimate goal of the ACA was to make competitively-provided private insurance plans available to all but the poorest Americans. The continual calls from both political sides for action on healthcare in the ten years since the ACA’s passing instead makes it clear that by attempting to please everybody, the creators of this revolutionary law ended up creating a delicate framework that was unsatisfying to many, difficult to understand, and left itself particularly susceptible to political sabotage.

The 2008 general election saw Democrats gain a level of federal consolidation not seen since the beginning of Bill Clinton’s administration. Fifty-eight Democrats held seats in the Senate, and two independents (Senator Joe Lieberman of Connecticut and Senator Bernie Sanders of Vermont) caucused with them.. Lieberman had a reputation for diverging from the official Democratic party line, even though he was once the Democratic Vice Presidential candidate. In the face of resolute Republican opposition, Lieberman held the pivotal 60th vote that would spell any legislation’s victory or defeat in the Senate. When it came time to follow up on a crucial Obama campaign promise and overhaul the American healthcare sector, Lieberman cast a massive shadow over the backroom negotiations and floor debates that shaped the massive new law. Firstly, the ACA expanded the existing Medicaid system, a provision that has endured as one of its most popular in states as strongly conservative as Nebraska, Idaho, and Utah. The Affordable Care Act was meant to provide a series of government-subsidized plans which could be offered to low- and medium-income Americans through special government-run healthcare exchanges. These plans were to be administered by private insurance companies and would be held accountable for covering ten essential medical procedures. This is how the law functions today, but this was not the only vision that the law’s architects were prepared to implement. Initial plans for the law included a provision for a “public option,” a separate insurance agency run by the federal government that would work concurrently as an alternative to private health insurance companies. While welcomed enthusiastically by most Democratic legislators, Sen. Lieberman was opposed to the public option. He and some of the public option’s other opponents argued that it would “drive private insurers from the market and eventually bring a government takeover of the healthcare system”. It is important to note that in 2009, Senator Lieberman had a long history of receiving money from insurance companies. It’s hard to imagine that this didn’t affect his opinion of something that would have severely cut down on private insurance profit margins. Some Democrats, however, merely viewed the public option as unnecessarily toxic baggage that would sink the entire bill. The public option provision ended up being struck down by a coalition of Republicans and centrist Democrats. Other red-state and moderate Democrats, like Montanan Sen. Max Baucus, didn’t see it as a passable provision. The final law passed without the inclusion of a public option and instead focused on expanding the existing Medicaid system, regulating insurance coverage, and subsidizing private insurance via government-run exchanges.

The ACA opened to window for millions of Americans to finally receive affordable health care. This is not to say that the law’s rollout has gone completely according to plan. The Congressional Budget Office, in its projections made just short of the law’s enactment, predicted that the ACA would decrease the percentage of working-age Americans without insurance from 18% in 2010 to 7.6% in 2016. That rate was only 10.4% in 2016, a rate that corresponded to a gap of more than 5 million uncovered residents. The progressive-leaning Center on Budget and Policy Priorities attributed this difference in the failure of some states to approve the ACA’s expansion of Medicaid. Writers for publications like the conservative National Review rebutted this point by questioning the use of the complicated regulatory framework put in place by the ACA when most of the increases in coverage could be attributed to the expansion of the Medicaid program. Either way, it is clear that the central framework of the Affordable Care Act has failed to achieve its primary goals. It failed to create a system where private health insurance would be widely available and affordable for most Americans, regardless of health status. Instead, it has continued to cause many to rely on a purely government-funded Medicaid system designed to be a last resort for the impoverished. Conservatives blame the law’s failures on a comprehensive misunderstanding of the realities of health insurance. It may be the case that the law approaches the healthcare industry incorrectly, but the ACA’s contorting efforts to manage the private insurance industry while giving it some measure of freedom exist only because of Republican insistence that a private insurance industry should thrive in the US.

The two visions are contradictory. A healthcare industry that seeks to cover all Americans, regardless of health status, while also maximizing its profits will struggle to provide health insurance at an affordable price unless the government heavily regulates enrollment and subsidizes insurance recipients. This is because people who are generally healthy will oftentimes decline to buy health insurance at all, leaving the remaining chronically sick policyholders to cover the cost of their own care without the spreading of risk. Enrollment in the ACA’s insurance plans for 2018 totaled 11.75 million. Premiums for some insurance plans purchased through the ACA’s exchanges rose at a an astounding rate of 32% during that time period. Much of this was due to simple uncertainty surrounding the law and its regulatory framework. More importantly, a large portion of that rise in premiums can be attributed to the loss of the individual mandate, which ensured that healthy individuals would be in the insurance pool and offset the excessive healthcare needs of people with preexisting conditions. In addition, the repeal of cost-sharing reduction payments by the Trump administration in October 2017 played a large role in the recent premium rise. During this same timeframe, Medicaid enrollment jumped from 56.5 million to 73.2 million beneficiaries. According to the Urban Institute, this increase would have been even larger if Medicaid expansion had been universally approved by all fifty states, on a magnitude of 4-5 million extra enrollees. Ten years after the implementation of the ACA, its government-run insurance exchange and its tiered plans create an over-complicated and contradictory system. It relies on a number of highly unpopular provisions such as the individual mandate, corporate mandate, and medical device tax. For example, 55% of poll respondents in 2017 supported getting rid of the essential individual mandate. It is important to note that 20% of respondents changed from supporting to not supporting that idea after being informed of the consequences. Any law that entirely relies on provisions that can be easily turned into political punching bags has a limited lifespan, no matter how effective the law actually is. Indeed, some of these policies have since been undone by Republicans, and the CBO illustrated how their removal will fundamentally undermined the already tenuous stability of insurance markets. The expansion of Medicaid has proven to be far more generally effective and popular. This popularity can be attributed largely to Medicaid’s commitment to simply meet the demonstrated need of its beneficiaries instead of maximizing profit margins. Since Medicaid’s administrators have stepped up to meet the task so strongly in the face of conservative sabotage of the ACA, it should be no surprise to anybody that many Democrats would like to expand government-provided healthcare to cover all Americans and ditch the private model altogether.

Healthcare continued to dominate politics in the run-up to 2018, as it did for election after election before now. From 2010 to 2016, Democrats were largely forced to play defense on the ACA due to the Republican focus on repealing and replacing the law. The Republican attacks came in criticism of the law’s rising premiums and restriction of freedom when it came to choosing whether or not to buy health insurance. When Republicans gained power in 2016, however, their proposed changes ended up being even more unpopular than the law in the first place. The American Health Care Act that was to replace the ACA included provisions that ended the individual mandate, enabled states to get rid of protections for people with pre-existing conditions, significantly cut down on the size of Medicaid, and loosened regulations on what all insurance plans must cover. Some of these changes were meant to restore the old functioning of the insurance industry, as an independent private sector that has aimed to minimize its expenses. That approach ended up being political poison for Republicans, which led to the complete failure of comprehensive overhaul efforts. Nevertheless, the partial repeal of the ACA via the destruction of the individual mandate has silently undercut the key function of the law: to provide affordable private-administered health insurance to Americans of all conditions. Democrats have an opportunity to reconcile the many inconsistencies inherent in the law after gaining control Congress in 2018 and looking forward to the Presidency in 2020, but without a filibuster-proof Senate majority the task will be extremely difficult.