Networks Financial Institute 2013 ACA Forum

Summary:

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3: ObamaCare: Rocky Politics, Stable Coverage

David KendallDavid Kendall, Senior Fellow for Health and Fiscal Policy at Third Way began his remarks by noting that public misunderstanding coupled with mystery about what the ACA entails have kept people from focusing on what is ultimately desired - a stable health care system. Most Americans already have health care insurance through employer-based coverage or Medicare. The ACA will be most impactful for individuals, particularly those who were afflicted with pre-existing conditions prior to enactment of the ACA. The ACA is also impacting the health care marketplace when it comes to choice. Americans have traditionally had little choice when it comes to their health care coverage and simply accepted the programs offered by their employers. The challenge for insurers will become how to implement and comply with the ACA without upsetting the stability of the overall market.

The task may not be as unprecedented as it seems. "We’ve actually already climbed this mountain with Medicare Part D, enacted by Republicans in 2003," said Kendall. Although plagued by a lack of initial acceptance and low approval ratings, Part D has become a widely accepted program that has expanded drug coverage from 75 percent of seniors to 90 percent. Moreover, Medicare Part D now enjoys a satisfaction rating above 90 percent among those covered. Like the ACA, Medicare Part D suffered some difficulties upon implementation including technical difficulties, problems with call centers and payment delays.

The structural similarities between the ACA and Part D are significant, according to Kendall. "The ACA and Part D are like twins separated at birth, sharing the same DNA," Said Kendall in describing the similarities. He noted six "shared DNA" features of the ACA and Medicare:

Shared DNA with Medicare Part D, however, does not assure stability for the ACA. Kendall reviewed specific threats to the Act’s stability, including narrow, sliding-scale subsidies for those purchasing insurance through the exchanges, and less comprehensive mandated benefits for specific health conditions relative to the broad conditions covered under Medicare Part D. However, neither of these threats may be construed as fatal flaws in the ACA.

According to Kendall, the underlying problem threatening the ACA’s stability is rising health care costs. As prices for health care continue to increase, the ability to finance health care will be undermined. By making soaring health care costs the common enemy and focusing on cost-restraint, Kendall stated that Democrats can avoid cutting benefits while Republicans can avoid raising taxes to generate additional revenue. Some of the opportunities for bi-partisan solution seeking he identified include:

Kendall summarized his remarks on a hopeful note. "Even though we’re at a moment of great angst, we can still create stability in the market," he said.

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