intro
Since its implementation, the Affordable Care Act (ACA) has left a trail of failures in its wake: mission failure, implementation failure, failure to help society, consumers, patients, providers and insurers through bad programs, lack of enforcement, and constitutionally questionable cost shifting to the states. on the sixth anniversary of the law, below is an overview of these flaws:
a sample of failures here
(not) bend the cost curve
President Obama has proudly announced, on multiple occasions, that ACA has bent the cost curve. Data showing slowing growth in National Health Expenditures (NHE) has been cited in support of the President’s claims. However, when taken in the context of the overall slowdown in national GDP growth, it becomes obvious that the slowdown in health spending correlates more closely with an overall slowdown in GDP, or excessive cost growth. projections for the next decade anticipate a rapid return to pre-aca growth rates.[1] The health sector is not behaving any differently than it did years before ACA relative to the rest of the US economy.
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health.gov
The president said healthcare.gov will make shopping for health insurance like “buying a plane ticket on kayak or a TV on amazon.” the reality is that healthcare.gov was an expensive disaster. the website is still flawed three years after it opened and has so far cost taxpayers $2 billion. the worst part is that the exchanges were supposed to have been conducted at the state level, but the complexity of the aca requirements and the cost of maintaining these systems have contributed to a shift among the states towards ceding control of the exchanges to the federal government.
non-insurance rates
every year the department of health and human services (hhs) lowers their target enrollment numbers and therefore it appears that they are reaching their target enrollment numbers. Before the CA went into effect, the CBO estimated that enrollment in the 2016 plan year would be about 26 million Americans.[2] at the end of the 2016 open enrollment period, total exchange enrollment had only reached 12.7 million, less than half of original projections. however, ACA advocates continue to claim enrollment successes because each year during open enrollment, when it becomes clear that the numbers originally projected will not be met, the administration moves the goalposts. Estimates have been lowered significantly to just 10 million in 2016. This allows supporters to say they have beaten the most recent projections, regardless of enrollment. [3]
also, the people who are enrolling are older and sicker than originally anticipated. the ‘invincible youth’, younger, healthier individuals under the age of 35 who tend to be more willing to forgo insurance, are doing just that. even though people between the ages of 18 and 35 represent two-fifths of the exchange-eligible adult population, and are more likely to be unmarried, uninsured, without employer-sponsored insurance options, and eligible for exchange subsidies , still make up only 26 percent of the exchange’s registrants in 2016.
the sloppy legislative wording of the aca has also contributed to what is known as family failure. A loophole in the law has left 1.93 million spouses and children of people in full-time employment without access to affordable health insurance coverage.
cousins
Part of the reason enrollment numbers have been so low is that premiums and out-of-pocket costs have continued to rise over the past six years. in 2013, the first year the exchanges were operational, the average premium increase was 50 percent; that increase reached as much as 600 percent for some people. the average referral premium has risen an additional 16.6 percent since then. Consumers’ out-of-pocket expenses have also increased rapidly during this time period in the form of higher deductibles, copays, and coinsurance.
“if you like your plan…” and “if you like your doctor…”
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The administration’s failure to deliver on its promise that “if you like your plan, you can keep it” is well known. At least 4.7 million Americans lost their insurance plan or were unable to re-enroll after it went into effect. This was the result of increased premiums and strict new regulations mandated by the aca.
Finding an alternative plan with the same coverage options was also difficult for many due to the narrow network designs many insurers use in an attempt to keep premiums low. In part because insurance plans began to exclude high-cost providers, and in part because providers are unwilling to join networks with extremely low reimbursement rates, many Americans have found that even if they could keep their old plan, that does not guarantee that you will still be able to see your old doctors.
The fact that many Americans lost access to their primary care providers, coupled with the expansion of the Medicaid population, actually had the reverse effect of what was intended and likely contributed to an increase in costly visits to the emergency room that might have been more appropriate if seen at a primary care provider’s office or an urgent care center.
impact on insurance companies
Despite optimistic projections, risk pools on exchanges are sicker than anticipated and the medical underwriting ban has made it nearly impossible for insurers to make a profit. the drafters of the aca anticipated some initial risk selection among plans and therefore created a mandatory risk broker program. Each insurer who earns a certain amount of profit as determined by the risk broker ratio must pay 20 to 50 percent of the profits from her in the risk broker pool. Any plan that suffers losses beyond the risk broker’s given threshold will be reimbursed for 20 to 50 percent of those losses. these rules create little incentive for insurers to take risks or make investments in the hope of generating additional profits, and in concert with the many other factors working against them, the number of insurers who suffered losses in the early years of the program exceeded substantially to those who generated profits and paid in the program. Unsurprisingly, risk brokers failed to deliver on their promise to support insurers losing money, and have since been cited in lawsuits as a contributing factor in some insurers being forced out of business.
the cooperatives of the aca have been exceptional among us, the insurers, for their rapid rate of closings. twelve of the original 23 cooperatives created through the aca suffered an average of $20 million in losses and have now closed, costing us taxpayers $1.23 billion in lost investments. The remaining 11 credit unions still owe the US Treasury about $1.1 billion in initial loans.
responsible care organizations
the accountable care organizations (acos) are among the biggest failures of the aca. the aco demo program consistently produced results that have shown the program to be unwieldy and ineffective. More than thirty organizations participated in the first demonstration project aimed at showing that ACOS help keep costs down while improving the quality of patient care. After the first two years of the program, the ACOs were unable to produce any evidence of quality improvement and requested that they not be screened for quality deficiencies for fear of losing Medicare reimbursements. Financial incentives intended to keep costs down failed, and the vast majority of ACOS dropped out of the demonstration altogether, or were moved to a second, less stringent program with fewer anticipated cost savings to Medicare.
the class act
at least the aco demo projects happened. the class act was a provision of the aca that was not even implemented. this program was intended to provide long-term care coverage, but was quickly determined to be financially unfeasible and was revoked almost immediately.
accounting
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Paying acas health insurance benefits was supposed to be fairly simple, but it turns out the process is incredibly complicated and has resulted in billions of dollars in improper benefit payments. these improper payments must be corrected through tax reconciliation, but the tax forms themselves have proven to be a confusing barrier for many Americans who could lose their insurance coverage if they don’t file the proper forms by the federal deadline.
new taxes for all
While the federal government is wasting taxpayer money to pay for ACA, it hasn’t missed an opportunity to further tax those whose money would be better spent providing health care, such as medical device manufacturers, employers who health insurance is provided by insurers, and perhaps more inappropriately, he says.
By upholding the effort provisions of the ACA, Congress has forced states to continue running ‘voluntary’ programs like the chip, even though federal funding of the programs is not guaranteed.
Similarly, the health insurance tax earmarked for insurance plans and self-insured employers is negatively affecting the budgets of self-insured states. State governments themselves are often among the largest employers and are therefore subject to significant federal tax. The constitutionality of this particular tax, however, is currently being challenged by Texas and other states.
conclusion
new programs often have a delay in implementation while bugs are worked out; This is to be expected. But six years into a program that has faced strong opposition in Congress, which economists and health policy experts have warned would be financially unfeasible, we’re still seeing trouble. Unfortunately, these are not “mistakes” but features of a law that was not well drafted, supported, or apparently implemented. the law continually fails to deliver promised benefits while increasing risk funds and insurance premiums and forcing increased national health spending without actually improving national health.
[1] https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/proj2014.pdf.
[2] https://www.cbo.gov/publication/51298; https://aspe.hhs.gov/pdf-report/health-insurance-marketplaces-2016-open-enrollment-period-final-enrollment-report; https://aspe.hhs.gov/pdf-report/how-many-individuals-might-have-marketplace-coverage-after-2015-open-enrollment-period; https://aspe.hhs.gov/pdf-report/how-many-individuals-might-have-marketplace-coverage-at-the-end-of-2016.
[3] https://aspe.hhs.gov/sites/default/files/pdf/187866/finalenrollment2016.pdf.
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