Read the rest of Slate’s coverage on the Supreme Court upholding the Affordable Care Act.
Just what problems have we solved now that the Affordable Care Act has been upheld? We should rightly celebrate that no American will be denied the ability to get health care because of a pre-existing condition, and that many children will remain on parents’ health plans for more time.
But at its heart, the bill was designed to extend private insurance to the largest (politically) possible number of the now 60 million uninsured Americans, and then expand the public safety net for the remainder. To do this, the ACA comprises a “three-legged stool” of policies: a mandate for employers and individuals to buy health insurance if they can afford it, a prohibition on insurers from barring any buyers, and, finally, a massive expansion of free health care for the poor.
According to optimistic projections from the Congressional Budget Office, the ACA as written would only halve the number of uninsured—from 60 million down to 30 million—by 2022. Thus, even with the ACA safe, one-half of all currently uninsured Americans are still projected to lack coverage.
This is why it was difficult for me to care greatly about the presence or absence of the individual mandate, which was at the heart of the Supreme Court case. In all of Massachusetts, the laboratory from which the ACA sprung, only about 20,000 people—which is less than 0.3 percent of the population—were assessed penalties for not buying insurance, penalties that totalled less than $20 million. Forcing people to buy insurance did precious little; those without private insurance are mostly those who couldn’t afford it anyway.
So what does the ACA really do to expand coverage? Again, it’s worth examining Massachusetts. As I wrote back in 2010, the state reforms correlated with a drop in the percentage of the uninsured from 6.4 percent to 2.4 percent, or a gain in coverage for 233,000 citizens. Over this time, state Medicaid rolls ballooned by 276,000 people, indicating that the real driver for expanding coverage was almost exclusively a free giveaway of health care—that is, the third part of the three-legged stool. (Enrollment in private plans grew by only a paltry 2 percent.)
When one understands that the ACA’s real impact will derive from its expansion of Medicaid, the Supreme Court’s decision seems more worrisome. By limiting the federal government’s power to expand Medicaid in many states, the Supreme Court has seriously damaged the liberal dream of universal health coverage. As I wrote last fall, almost half of all people who qualify for free health insurance never sign up, especially in the Southern states where the highest number of uninsured people live. That’s not because inhabitants are lazy; it’s because those states create all kinds of barriers to Medicaid enrollment, since they have to assume some of the costs. The Supreme Court’s decision leaves the federal government without a big stick to beat ornery states like Texas, Florida, and Mississippi into expanding Medicaid, which means it has been left powerless to make sure that poor people get their coverage.
State reluctance to expand Medicaid gets at the core problem in health care today—it’s just too damn expensive and the ACA does very little about that. Currently, the average person consumes $5,000 per year in health care. By simple math, newly insuring 60 million people will cost taxpayers $300 billion annually, a far higher number than many policymakers admit. (For example, health care costs now consume 54 percent of Massachusetts’s budget, with the lion’s share going to the expanded Medicaid, despite massive federal subsidies.) And the dream that newly insured people will take advantage of more preventive services, often touted as a means to cut costs, hasn’t panned out, according to a meticulous new study from Oregon.
The ACA’s central effort to keep these costs down is to fund several experiments. Most prominently, two Accountable Care Organization pilots—the “Pioneer” and “Shared Savings” programs—allow private insurers to contract with Medicare to take a fixed budget and take full responsibility for a large block of patients. If the patients’ care costs more, the insurers eat the cost; if the care costs less, the insurers keep the difference. It’s a noble idea, but what if it doesn’t work? In fact, recent experience shows that it may not. Then what? The only alternative is drastic cuts in health plan benefits, probably including very high deductibles for care that could make a lot of care for serious diseases unaffordable.
In the end, I will certainly celebrate the Supreme Court ruling, because the ACA was the only serious effort any party put forward to tackle the deep moral problem of the uninsured. But my enthusiasm is tempered by the incredible obstacles that lie ahead.