Affordable Care Act Scorecard: Mid-2015

WC will use the U.S. Supreme Court’s recent decision on the Affordable Care Act as an opportunity to review the overall performance of the makeover of U.S. health care. It’s a chance to compare the law’s goals with its performance in the first two years. WC will extract some of avowed goals of the law and have a reality check.

Insuring More Americans

The virulent opponents of the law have argued that it would actually reduce coverage; in reality, around 15 million Americans have gained insurance. It would be a lot more if some states – like Alaska – hadn’t blocked Medicaid expansion. In more sensible states, where Medicaid expansion was implemented, data from the Urban Institute show the uninsured falling from more than 16 percent to just 7.5 percent. So, yeah, we’ve insured a lot more Americans, and without the irrationality of the Republicans about Medicaid expansion, it would be even better.

Quality of Coverage

The ACA banned the deceptive plans, those with ridiculously high deductibles and minimal, limited coverage. They provided the illusion of health care insurance. Good riddance. Admittedly, less expensive health care plans under the ACA do have relatively large deductibles and impose significant out-of-pocket costs. But the plans are much better than no coverage at all. Public opinion surveys show newly insured have seen a sharp drop in health-related financial distress, and report a high degree of satisfaction with their coverage.

Cost of Coverage

The critics predicted huge increases in premiums under the ACA. It hasn’t happened. Increases in premiums for most plans are well below expectations. In 2014 the ACA critics predicted huge premium increases were looming for 2015; they turned out to be just 2 percent. There was another flurry of scare stories about rate hikes earlier this year, but as more information comes in it looks as if premium increases for 2016 will be bigger than for this year but still a modest 6.6%, very small by historical standards — which means that premiums remain much lower than expected. WC’s employer experiences 20-35% increases year after year after year, even with increased deductibles and co-pays. So the rate of premium growth has slowed considerably.

Controlling Health Care Costs

WC doesn’t want to be seen as defending the health insurance industry, but at least a part of the increases in health insurance premiums the last 20 years have been the result of rapidly increasing health care costs, increases at rates that were multiples of inflation. The comparative stability of health care costs is reflected in the low increases in health insurance premiums. Medicare costs, for example, have slowed to annual growth of about 5-7%.1 It’s early days to draw consuions about the role of the ACA in controlling rate of health care cost growth, but it seems to be a factor. Access to early and preventative health care alone seems to be playing a role.

Because health care costs so often involve economies of scale, they are going to be very difficult to contain completely. Let’s just say that at this point the signs are encouraging.

The dire predictions to the Republicans haven’t occurred. They predicted exploding budget deficits; hasn’t happened. They predicted massive unemployment; employment has grown steadily. They predicted immense consumer dissatisfaction; hasn’t happened. The Affordable Care Act seems to be working. True, it could be working better, especially if more states would expand Medicaid. But instead we can count on the U.S. House voting to repeal the ACA another 20-30 times.

The very definition of insanity.

  1. By 2019, Medicare spending per person is projected to be more than $2,400 lower per person than was expected following passage of the ACA.