Eleven months ago, at Health Action 2017, an annual conference hosted by the liberal advocacy group Families USA, incoming director Frederick Isasi headlined a strategy session for the assembled health care advocates, enrollment counselors, and wonks—all of whom were confronting the likelihood that Republicans would repeal the Affordable Care Act and enact radical Medicaid spending cuts. The key to limiting the damage, Isasi said, would be to “make Republicans work through the legislative process as slowly as possible…our action should lead to their inaction.”
At Health Access 2018, which convened in Washington, D.C. last week, the dominant chord was a certain wonderment that the objective had been met—for a year at least. Notwithstanding legislative and administrative sabotage—the repeal of the ACA’s individual mandate, a campaign to impose work requirements and oppose other barriers to Medicaid enrollment in Republican-led states, administrative approval of lightly regulated health plans lacking ACA consumer protections—the funding and structure of the law’s core programs remain intact so far.
Adults with incomes below 138% of the Federal Poverty Level remain eligible for Medicaid in the 33 states (including D.C.) that have embraced the ACA’s Medicaid expansion, with more likely to come online. Some 9 million people enrolled in private health plans are receiving premium subsidies. An ACA-compliant private market in which all plans provide the law’s Essential Health Benefits and in which insurers must offer insurance on equal terms to people with preexisting conditions remains intact.
The conference speakers looked at the healthcare landscape much as Londoners might have looked around the city after the Blitz—contemplating the rubble, but knowing that the city, against the odds, was still intact, and perhaps even divining that in two years, they would be planning a cross-channel invasion in earnest. Likewise, today’s health care reformers are planning the steps they will take not just to mend the Affordable Care Act, but to build upon it.
Activists look back in wonder
“Today I ask everyone to take a deep breath, think about everything we were able to accomplish,” said Gaby Pacheco of TheDream US—a group promoting college access for Dreamers. “And think about all the things we will accomplish…we’re resilient and we’re still here.” Robert Greenstein, president of the liberal Center on Budget and Policy Priorities, and a veteran of many political battles, declared himself “uncharacteristically optimistic.”
“We beat them back, and we have a reasonable chance to keep doing so through 2018,” he said.
Brad Woodhouse of the Protect Our Care Coalition noted the “sick irony” that “it took Trump becoming president for Obamacare to become popular,” and declared “We’re on the offense on healthcare.”
“We need to make health care the dominant issue going into 2018,” said Senator Cory Booker, basking in a raucous greeting. “I came here…to celebrate and thank you—I feel like I should be the one yelling and screaming and giving you a standing ovation.”
No one at the event allowed themselves (or anyone else) to forget that a wrecking ball still looms over the ACA and Medicaid. As Anne Pfrimmer of the SEIU warned, Senator Lindsey Graham is “shopping Graham-Cassidy [a bill that dismantles the ACA marketplace and guts Medicaid spending] every day, and there’s 48 votes for it.” Yet the conference was focused in large part on taking stock of the power that a broad array of activists had united to wield in 2017—successfully staving off the dismantling of the ACA and evisceration of Medicaid, both written into Republican bills that came within a hair’s breadth of passage.
Whither healthcare reform?
But where exactly would a new Democratic offensive on healthcare land? If Democrats take power in 2020, will they converge on a way to extend health insurance to the 28 million who still lack it, reduce out-of-pocket costs for the estimated one third of insured Americans who have trouble paying medical bills, control costs to make those goals feasible, and simplify the dizzying array of programs and markets that that currently provide healthcare coverage? Will they merely look for ways to shore up the ACA marketplace (reinsurance, a public option, more generous subsidies), look to remake the system all at once, via some form of Medicare for all, or seek a sequence of incremental changes designed to fundamentally transform the current system?
Sen. Cory Booker (D-NJ) laid out an ultimate goal, offering “a prayer for all of us…that our children and grandchildren look back at this era today and say, wow, look at a time when people didn’t have access to healthcare.” Spotlighting racial inequities, he asserted, “we need to make the reality we’re living in America now something future generations will look back at and not understand how it could have ever been.” He did not offer any specific direction on healthcare policy, however, beyond the goal of erasing injustice.
Elizabeth Warren excoriates insurers
Sen. Elizabeth Warren (D-MA), delivering the keynote, did lay out specific policy proposals. Before delivering her own, she managed to gesture favorably toward the whole spectrum of ideas floated by Democrats, declaring fealty in principle for Bernie Sanders’ sweeping “Medicare for all” proposal but also allowing space for a more limited Medicare-like public option proposed by Sens. Tim Kaine (D-VA) and Michael Bennet (D-CO) and a state option to set up a Medicaid buy-in in the ACA marketplace introduced by Senator Brian Schatz (D-HI).
For her own part, Warren trained her sights on the high out-of-pocket costs that insured Americans are exposed to. Noting that out-of-pocket costs in employer plans have risen twice as fast as wages in recent years, Warren said, “medical bills can stretch a family’s budget to the breaking point.” Her solution: “require private insurers to be just as affordable as public insurers like Medicare and Medicaid.”
There’s an irony in this proposal. Private insurers do provide insurance “at least as affordable as Medicare” in the Medicare Advantage program, and as affordable as Medicaid in the managed Medicaid programs to which states are increasingly turning. In both cases, coverage is affordable to enrollees in part because government subsidizes the coverage more heavily and uniformly than in the ACA marketplace (or in employer plans, which are subsidized through tax breaks), and in part because government payment in these programs ensures that the insurers will pay healthcare providers at rates roughly comparable to those of Medicare and Medicaid—in contrast to the much higher rates they generally pay in the private market. Insurers participate happily and profitably in both programs—and doubtless would in any programs similarly subsidized and rate-controlled.
Yet Warren spoke as if insurers are solely responsible for the unaffordability of healthcare in the U.S. Asking why middle class families can’t get good coverage at an affordable price (in fact, many do), she answered, “The reason is straightforward: profits. A private insurance company maximizes its profits by bringing in the most money possible from customers and paying out the least money possible for their health care.”
That is a deeply reductive view of why Americans pay about twice as much per capita for healthcare as the OECD average—especially as the ACA requires insurers to spend 85% of their premium revenues on paying claims in the large group market, and 80% in the small group and individual markets. Warren spoke not a word about price-gouging by hospitals and doctors, the fine science of upcoding, by which procedures are gilded so they can be classified under a higher billing code, the loopholes allowing self-dealing, such as using a high-priced in-house pathologist, the balance-bill-at-will practices of many independent practitioners roaming hospital halls, the privileging of expensive procedures, or the outsourcing of services such as anesthesia and ambulance to hedge fund- and private equity-backed price maximizers.
By blaming insurers alone, Warren is going after a tried-and-true political enemy while leaving healthcare providers rhetorically unscathed—but to the extent her idea are practicable, they would induce insurers to pay less to providers. But if her objective is to preserve a role for private health plans, the question is whether she will ultimately embrace specific proposals—including, presumably, a mix of price controls and increased premium subsidies—that would make it possible for them to be as affordable as their public counterparts.
The inequity of health access in the U.S. presents something of a political conundrum for Democrats, reflected during the final Health Action plenary session in the musings of Chris Jennings, a former health aide to President Barack Obama and a longtime Senate aide.
In dialogue with Dean Rosen, a former Republican Senate and House aide, Jennings declared that “equity doesn’t sell.” Proposals pitched to help the disadvantaged arouse suspicions among many that others’ gains will be their losses. People value programs that seem designed to treat everyone equally. “Medicare for all” polls well because it’s perceived as a system that all pay into and all benefit from.
Earlier, however, Jennings had pointed to another political reality: People fear losing what they have more than they value potential gain in new programs. That suggests tremendous barriers to enacting a national single payer system. Jennings therefore suggests selling equity as the status quo—presumably as a status quo that’s been knocked somewhat out of whack and needs tweaking. “Talk about affordability, everyone’s there.”
That impulse is detectable in Warren’s proposals. While her rhetoric against insurers is populist, her proposal to subject commercial insurance—mainly in the employer market—to tight new rules bespeaks a search for incremental solutions that would benefit the majority of insured Americans. Ditto with a proposal she floated to strengthen the ACA marketplace: require insurers that participate in Medicare Advantage and/or managed Medicaid programs to participate in the marketplace as well. New York has already imposed this requirement on its managed Medicaid insurers, while Nevada has given them somewhat softer incentives to participate. It would appear that Warren is casting about for incremental improvements to health access while adhering in principle (or at least in rhetoric) to the goal of single payer.
Conference participants did not converge on a single path forward, a consensus progressive platform for healthcare. As Warren intimated about herself, most would probably favor various incremental steps to improve affordability—Medicare or Medicaid buy-ins for people now dependent on the individual market, rules or incentives to draw more insurers into the ACA marketplace, reinsurance to bring down premiums. Many may feel, as Chris Jennings suggested, that Democrats have to find ways to do more than put further patches on an inefficient, expensive, convoluted mesh of programs. As Dean Rosen pointed out, the current hodge-podge of programs creates resentments: an Uber driver who earns too much to qualify for a strong marketplace subsidy may resent the affordability of insurance available to, say, a home health aide.
In 2007 and 2008, the leading Democratic candidates for president all adopted a blueprint for health reform that eventually became the ACA: a marketplace of subsidized private plans for those who lacked access to employer-sponsored insurance or other public programs. Once the legislative process began, the public option, in original concept a centerpiece, was weakened by degrees and ultimately disappeared altogether.
The 2020 campaign may thus take Democrats back to the future. In its earliest iterations, such as Jacob Hacker’s Health care for America plan introduced in 2007, the public option was not merely a card in the marketplace deck: it was an 800-pound gorilla, teaming with Medicare to negotiate payment rates to providers, and offering employers the option to buy in by paying a payroll tax. Employers that chose to continue offering their own insurance would have to offer insurance of comparable affordability and quality—as Warren is now proposing. (Ironically, on average, employer-sponsored plans already do this, covering just about the same percentage of enrollees’ costs as traditional Medicare does, and capping traditional enrollees’ yearly costs to boot, which traditional Medicare doesn’t do.)
For all her insurer-bashing, Warren does seem to be pointing the way toward a key to health reform progress: effectively capping the rates that insurers pay providers in the ACA marketplace, and putting downward pressure on the rates they pay in the employer market as well. Ironically, insurers would likely be fine with that, as they are with the rate-controlled Medicare Advantage and managed Medicaid playing fields. It’s healthcare providers who will likely fight tooth-and-nail against any program that puts large numbers of Americans into plans paying lower rates. Democrats largely bowed to that pressure in 2009-10—though they did squeeze payment rates in Medicare and Medicare Advantage. Pushed by a base that’s moved left, and by rising federal costs in the Trump-battered ACA marketplace, they may move more aggressively to control provider payment rates the next time they gain power.
One year ago there was a pronounced risk that reformers were in for an enormous and demoralizing setback. There was also a chance that beating Republicans to a draw would convince Democrats to embrace detente, and turn to other issues in their efforts to regain political power. The fact that Democrats are champing at the bit to campaign on health care once again, and compiling plans to expand coverage and turn health care into an issue of national solidarity, underscores the remarkable impact of spontaneous, broad-based activism, inspired by an acute threat to benefits that are a matter of life or death to millions of people.
Andrew Sprung writes about health care policy at his blog, Xpostfactoid, and for other publications.