HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

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Wednesday, April 2, 2014

Affordable Care and the Lessons of History

The Affordable Care Act (ACA) seems to be gaining steam. After a rocky start in October, the new health insurance exchanges reached the government's enrollment goal of 7 million. As ACA's provisions continue to take effect, its status should solidify and transform the U.S. health care system in important ways.

Yet there also are reasons to be cautious about ACA's long-term prospects. The Act's basic framework may not have taken sufficient account of the lessons from history. After watching health insurers torpedo the Clinton plan in 1994, President Obama took care to secure support for ACA from the insurance industry, as well as drug companies, physicians, and other important interest groups. But there may have been more important lessons from the country's history with other public benefit programs, including Medicare, Medicaid, and food stamps.

As NPR and the New York Times reminded us with their ACA updates last week, federal-state partnerships can have serious drawbacks compared to programs operated by the federal government. Some states effectively meet the needs of their residents, but others do not. Just as Texas had the highest percentage of uninsured people under pre-ACA health care, Texas continues to lag other states under ACA in terms of access to health care coverage. Similarly, when states were responsible for setting eligibility standards for food stamps, the program reached counties with only 59 percent of the U.S. population. After a decade of state oversight, Congress established uniform eligibility standards.

Benefit programs also fare better when they are perceived by the public as having been earned. Medicare and Social Security have enjoyed strong support because they are funded in part by payroll deductions. Medicaid, on the other hand, with its funding from general revenues, often is viewed as providing handouts.

Finally, benefit programs for the poor tend to generate broad support only when the well-to-do also are eligible for the programs. Medicare with its universal eligibility is a much stronger program than is Medicaid. Under ACA, the more prosperous will continue to receive their health insurance from their employers or on their own, without government subsidies, while the poor will have to rely on Medicaid or federally-subsidized health exchange coverage. History tells us that political support flags over time when benefits are restricted to the less prosperous. Perhaps support for the exchange coverage subsidies will persist since poeple are eligible for the subsidies up to 400 percent of the federal poverty level, but the Medicaid expansion only goes up to 138 percent of the poverty level.

President Obama and congressional Democrats may have made the correct short-term political bet when they went with ACA rather than a federally-operated, Medicare-for-all system funded by payroll deductions. But the long-term prospects of ACA carry much uncertainty.

[cross-posted at PrawfsBlawg and orentlicher.tumblr.com]

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