It is also worth noting that the first ruling from a federal appeals court found the health reform law constitutional today; the 3-member 6th U.S. Circuit Court of Appeals ruled 2-1 (with a Bush-appointed judge joining a Dem-appointed judge ruling for) upholding the individual mandate. Again, this should make its way to the Supreme Court by year's end.
Prompt: You’ve just been hired as a health aide to member of Congress (choose one) who has asked you to prepare a memo summarizing what the next steps should be on health reform. In 1,000 words or less, please explain and justify your recommendations, identify major challenges, and discuss how they could be addressed.
To: Senator Barbara Boxer
Subject: Next Steps in Health Reform
The Patient Protection and Affordable Act is the most comprehensive health reform legislation to pass since Medicare. Much like its 1960s predecessor, the Affordable Care Act created a sharply divided electorate that renewed the fundamental debate as to what the role of government should be. With its passage, access to basic health care became a right for all Americans and in turn every individual has a responsibility to contribute for the care they receive.
As you know, many newly elected Republicans ran on the ‘Repeal Obamacare’ mantra this past fall, and have since fulfilled campaign promises by voting to do just that. While the effort of full repeal amounts to little more than political theater, it is important to realize that the complex legislation can and should be improved upon.
Full implementation of the law and its benefits will take years to realize, and you and your colleagues should focus on how best to process the transition. Rather than rehashing the debate of the last two years, there should be consensus around the fact that portions of the law should be preserved, while others should be retooled if not fully removed. More so, the new law left out several important provisions and these should be addressed in separate legislation.
What To Keep
Much like Congress, the American public remains divided in their opinions of the Affordable Care Act.[i] Many remain confused with the law’s provisions and unsure of what it means for them personally. This trend will most likely continue until the major pillars of the law are brought to fruition in 2014, including the expansion of Medicaid, the institution of the individual mandate, and the availability of health insurance subsidies through the state based exchanges.
The major insurance market reforms remain the most popular provisions of the law.[ii] The bans on pre-existing condition exclusions for children and rescissions for all persons exemplify these positive views, and as more regulations preventing the most abusive practices of the insurance industry roll out overall perceptions of the law should continue to gain approval. Market reforms like guaranteed issue of insurance and a comprehensive minimum benefits package are essential provisions that must be preserved. Lawmakers should continue to relay the fact that unless everyone is in the insurance market, incentives will be improperly aligned towards ‘cherry-picking’ only the healthiest enrollees. The ‘three-legged stool’ composed of the individual mandate, adequate insurance subsidies, and guaranteed issue will not be functional unless every leg is preserved at the risk of the adverse selection and skyrocketing premium costs. As such, it is imperative for you and your colleagues to preserve these co-dependent provisions.
The law’s financing mechanisms must also be maintained in order to preserve fiscal responsibility, as spending measures such as the expansion of Medicaid, closure of the Medicare Part D doughnut hole, and insurance subsidies for individuals and small businesses have proven wildly popular.[iii] It would be advisable not to shy away from the fact that the law does indeed increase revenue, and any attempt to dismantle the taxes on high cost insurance plans and high-income payrolls would be harmful. Medicare savings realized through efforts like the Independent Payment Advisory Board (IPAB) and crackdowns on fraud and abuse should bring significant cost reductions to the program[iv], and there may be additional opportunity to collaborate with members on the other side of the isle along these efforts.
What to Change
As much of the responsibility of implementation rests with the states, it would be helpful for you and your colleagues to allow maximum flexibility to achieve meaningful progress for their unique populations. As such, expediting the provision for a state flexibility waiver that satisfies a determined ‘federal floor’ should be considered, which is now set to go into effect in 2017. By moving up the start-date to 2014, states could immediately pursue novel mechanisms to expand coverage and act as laboratories for health care payment and delivery models. Senators Ron Wyden (D) and Scott Brown (R) have introduced The Empowering States to Innovate Act along these lines, and your support could add significant momentum to the effort.[v]
What to Add
Majorities in both parties realize the necessity of controlling rising health costs. Though the Affordable Care Act makes meaningful strides to help bend the cost curve, additional steps must be taken to preserve the fiscal health of programs like Medicare and Medicaid. Funding for dynamic delivery models like Pay for Performance and the Patient-Centered Medical Home must be expanded. A permanent solution to the flawed Medicare SGR provider payment formula must also be addressed. The political realities of today will limit any new financing sources, though, and as such it may be necessary to redistribute appropriations in the Affordable Care Act towards these necessary endeavors.
As you are aware, Medicare and Medicaid are the major drivers of the nation’s long-term deficits, and it is important to begin thinking outside the box about how best to curb costs without sacrificing the quality of these vital programs. Tort reform such as the HEALTH Act[vi] will begin to reduce the need for physicians to practice costly ‘defensive medicine’, while research through the new Medicare Innovation Center and Patient Centered Outcome Research Institute will yield meaningful proposals on how to best improve the value of provided care. It may also be time to start considering ambitious proposals such as retooling the Medicare payment index (RVU) in order to truly bolster primary care, and negotiating drug prices in Medicare Part D.
The passage of the Affordable Care Act was a monumental achievement, but only the beginning of the effort. Health reform is forever, and looking forward solutions must be able to transcend political party in order to contain the growth of health care costs and improve the health of every American. This will not only foster a uniquely American health system worthy of the name, but also more importantly preserve and bolster our global competitiveness through the 21st century.