Dear Republican Congress: Forget the ACA

To: Speaker Paul Ryan

RE: “Repeal and Replace”

News reports consistently observe that finding a comprehensive replacement for the Affordable Care Act (“Obamacare”) is proving more difficult that legislators imagined. I would suggest that this is because Republicans have consistently misrepresented ACA and cherry-picked data in support of that mischaracterization as part of a political strategy. That has kept you from an honest appraisal of the pros and cons of the ACA.

As one example, a frequent talking point claims that the premiums on the exchanges are skyrocketing. Silver plan premiums for Phoenix went up 145% over 2016! (You never mention that premiums for Indianapolis went down by 4%). In addition, you consistently failed to address the ACA’s subsidy provisions that covered those fluctuations. Consider the following excerpt from a chart from the Kaiser Family Foundation.

screen-shot-2017-02-11-at-12-05-33-pm In addition to not being honest about the net impact of the premium coverage (middle columns of the chart) you have consistently blurred the distinction between those with employer-based coverage and those purchasing non-group coverage.

Regardless of these talking points, I’m willing to give you a pass. As you work out details of your new Replace plan, I want you to pretend that the Obama administration never happened. There is no Affordable Care Act (I’ve got a kind of George Bailey image going).

I’m suggesting that your wonderful replacement plan should simply address all of the concerns that existed with health care in 2008. You don’t have to fight Obamacare. You can just “provide common sense solutions that solve people’s problems“.

Let’s start with costs. Here is a Kaiser Family report from 2008 that shows the increasing costs of health care. As you likely know, the premiums paid by families more than doubled over the previous decade while salaries were growing very slowly. Remember, this was before the great recession hit.

screen-shot-2017-02-11-at-12-14-44-pm

Changing this cost curve is challenging, especially without decreasing the quality of care. But you and others have repeatedly criticized the ACA for not reducing costs at the family level. So please examine how we might have made changes in the first part of the century to significantly slow the rate of growth.

Kaiser points out that insurance costs doubled for both employer expenses and the employee contribution over the decade.

screen-shot-2017-02-11-at-12-19-29-pm

Of course, not all Americans have employer-based insurance. Many opt out of insurance coverage altogether. They may rely on emergency care as needed due to the Reagan-era law mandating that care (with its associated cost-shifting to insurance plans). The CDC completed a report on insurance coverage trends and showed the following data on the percentage of Americans uninsured in 2007.

screen-shot-2017-02-11-at-12-39-20-pm

There is a real need to attend to increasing the number of people insured. As those percentages increased, the strains on health care go up. When we look at the fact that these percentages are based off an increasing population, the numbers of people impact go up sharply.

In the CNN debate this week, Senator Cruz suggested that everyone had a right to access health care, in contrast to Senator Sanders’ claim that health care was a right. This is a matter of political debate, but your plan should do something to address the microeconomics of how people purchase plans to drive down the number of uninsured.

One component impacting costs has to do with the avoidance of preventative services. For those without ready access to health care, we wind up with a bizarre version of the old Fram Oil Filer commercials: you can pay me now or you can pay me later. Acute care is far more expensive than preventative care over the long run.

In 2007, the Robert Wood Johnson Foundation put out a report on the potential impact of preventative care. Here is the conclusion to their executive summary.

screen-shot-2017-02-11-at-12-52-22-pm

I said we weren’t worrying about ACA but here’s another misrepresentation you’ve made. Increasing preventative coverage for all has a market impact of raising rates in the short term but lowering costs over the long run (or at least inhibiting their growth). To criticize the short-term impact without admitting the long-term benefit is disingenuous.

One other factor that shapes health care in the US has to do with disparity across the states. The Kaiser Family Foundation examined health care expenditures in 2008 and showed the following chart.

screen-shot-2017-02-11-at-1-13-33-pm

This shows the tremendous disparity which is a likely result of population size although there are some other factors going on as well. This shows the difficulty of managing a national approach to health care when we really have 50 independent markets. I know you are in favor of allowing competition across state lines but that would seem to result in picking winners and losers, with lower expenditure states helping subsidize high expenditure states (through the insurers not the government).

This disparity also points out the inherent limitations in any approach to health care funding that uses block grant approach. While that may limit federal outlays for health care, it will have significant repercussions at the state level.

So we don’t need to talk about promises of keeping your doctor or of mandates or of medicaid expansion. Those are all aspects of the Affordable Care Act. While I’d argue that the years since ACA implementation have begun to shift health care in positive ways, I don’t think you can agree.

Instead, I ask you to develop a plan that solves health care issues as they existed in 2008. That requires a plan that lowers the growth in premium costs over time, decreases the number of uninsured, maintains a level of health care quality through preventative care, and that addresses inequalities across the nation.

I look forward to your common-sense solutions.

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