The Affordable Care Act One Year Later

The New York Times has a very distilled summary of the Affordable Care Act one year after coming into effect. The salient points:

1. The percentage of uninsured people has been significantly reduced – more so for states that elected to expand Medicaid. Overall sixteen million Americans have health insurance now who did not have it before the ACA went into effect. 8.7 million of these are from the expansion of Medicaid. 7.3 million purchased new private insurance.

2. Premiums have fallen for most people, but some people have seen premiums rise. This appears to be a function of supply and demand – that is, states with more insurance options have seen premiums fall; states with more oligopolistic health insurance markets have seen premiums rise.

3. It is too early to tell if health outcomes have improved as a result of the Affordable Care Act. Nevertheless, there are some clear positive indications of improving outcomes, such as increased rates of colorectal cancer screenings for those who should be getting them and improved access to care for nineteen-to-twenty-five-year-olds.

4. The health care industry appears to be booming. The S&P 500 health care index grew twenty-four percent over the last year, outpacing the growth of the rest of the stock market. This is also despite greater levels of competition being reported by insurance companies. Newly insured Americans has also meant that hospitals have had to eat fewer costs of treating the uninsured and that pharmaceutical companies have found more customers.

5. 86% of new Medicaid users have come from states that expanded Medicaid.

States that have expanded Medicaid are highlighted. Image from Wikipedia.

Medicaid expansion was a cornerstone of the original Affordable Care Act that passed Congress that was to account for the majority of newly-insured Americans. Nevertheless, when the Affordable Care Act went before the scrutiny of the Supreme Court, Medicaid expansion was shot down. SCOTUS decided states could opt out of Medicaid expansion. Many states chose to expand Medicaid anyways, in order to provide more individuals with coverage as designed by the original law that passed Congress. Plus, the Federal government will pay all costs associated with Medicaid expansion through 2016 and more than ninety percent of costs after that (as opposed to roughly seventy-five percent of Medicaid costs the federal government paid before the Affordable Care Act).

Nevertheless, many states chose not to expand Medicaid. This is a double-edged sword for those states, since, with the presumed expansion of Medicaid on the federal dime as part of the pre-SCOTUS ACA, many extant sources of funding for hospitals that would have been redundant with funding associated with Medicaid expansion were cut anyways. Accordingly, hospitals in these states have been scrambling for new sources of funding to replace those that were unintentionally lost. Also, many people in states that chose not to expand Medicaid actually lost their insurance coverage as a result of the new law. Again, insurance coverage was lost for these people because, under the Affordable Care Act, Medicaid expansion was supposed to replace their prior insurance. It is estimated that this unintended coverage gap in states that did not expand Medicaid contains as many as 6.5 million Americans.

Despite that these two problems – loss of hospital funding and loss of insurance for individuals – have occurred overwhelmingly in states with Republican-controlled legislatures and due to the decision not to expand Medicaid, they have actually become Republican talking points. This is either: the political equivalent of taking someone’s hand, slapping them in the face with their own hand, and then saying, “stop hitting yourself.”; or, it is the result of Republican ignorance that obstructionism from their own party is responsible for the coverage gap that exists in their own states. And if such failure to understand the consequences of legislation is what is at the root of the problem, one wonders whether the Republican Party is at-all qualified to participate in policy-making.

6. Health care spending has slowed, but it is difficult to attribute this slowdown to the Affordable Care Act. Reduced health care spending is an international trend, and health care economists believe multiple factors are contributing. One proposed explanation is the growth of the accountable care model worldwide, with its emphasis on reduced rates of readmissions as its primary outcome for quality improvement. An increase in funding for preventative care may also be contributing. Nevertheless, one would expect sustained drops in spending from these or any other explanations, and it is too early to tell if the present trend will last.

In summary: the Affordable Care Act has resulted in marginal improvements, but it is not perfect, nor is it necessarily even a good piece of legislation. The United States has the best medical care system in the world, hands down. We have the best training for specialists, doctors from across the world come here for fellowships and training in advanced techniques, and innovations and new medical technologies disproportionately come from the United States, even across the developed world. Yet, when it comes to delivering care to our citizens, we pale in comparison to France, or Japan, or Greece, or Saudi Arabia, or Colombia, or Portugal, or 100 other nations.

We’ve had to really work hard to create such a pronounced ineptitude at health care delivery in this nation, where politics prevents medical services from getting to those who need them. The most recent and most apparent manifestation of this is in states that have declined to expand Medicaid. With the Affordable Care Act, we really had nowhere to go but up, but we still have a long way to go if we want to get to the top or even to a marginally acceptable, lukewarm standard of health care.