Political Turmoil Heats Up Healthcare Debate

Last month we saw a new drama unfolding in healthcare. As of this writing, it is unclear which turn the plot would take next. In March in a remarkable and unprecedented turnaround, the U.S. Justice Department sided with Texas District Court Judge Reed O’Connor who struck down the entire Affordable Care Act (ACA) in 2018. For those who didn’t follow the series of events that led to the decision, this is the case filed by 20 plaintiff states questioning the legality of the ACA. While it was expected that the Justice Department would uphold laws passed by the Congress, it decided not to do so, reversing a decision it made last year. The case now heads to the Fifth Circuit Court of Appeals. If the verdict is upheld there, the case would go to the Supreme Court for the third time in 10 years. If the law is eventually struck down, in absence of a replacement bill, all the provisions of the ACA would end, creating havoc throughout the U.S. healthcare system.

The White House assured the public that there is a replacement healthcare plan but failed to produce one and instead passed the baton over to Congress. The GOP-controlled Senate didn’t want to take on that responsibility and decided to wait for the White House’s plan. Then President Trump declared that he would not look for a vote on a new plan until after the next presidential election in 2020, creating even more uncertainty in the minds of the people who are covered by the law, as well as the healthcare industry as a whole. 

What Would Be the Impact?

As a healthcare analytics professional, I thought that it would be interesting to analyze what the striking down of the ACA without an appropriate replacement would mean to the country. It seems that the greatest devastation would actually come in the states that support the president and need the law the most such as West Virginia, where 159,000 people or about 11 percent of nonelderly adults would lose their health insurance overnight. After the erosion of coal mining jobs, many West Virginians were left with severe chronic illnesses caused by the hazards of working in the coal industry. When Medicaid was expanded in the state, many people found a means to cover their high healthcare costs. That support would disappear if the ACA is eliminated and a suitable replacement plan is not approved and implemented.

The ACA set up the health insurance marketplaces through which about 11.4 million people now buy their health insurance. Expansion of Medicaid, which was also sparked by the ACA, provided insurance coverage to an additional 12 million people. All 23.4 million of these people are at risk of losing their healthcare if ACA is gone. This includes 9.2 million who receive federal subsidies to buy insurance through the marketplace owing to their lower income level. More importantly, health insurance companies would not be required to cover pre-existing conditions, one of the most favored provisions of the law, and could deny coverage to anyone trying to buy insurance anew. That might impact 129 million people, or almost one in two Americans who are living with a pre-existing condition.

These are all big numbers, and a court decision to eliminate the ACA without a similar healthcare plan in place will hurt the most vulnerable population in the country. For example, those people who are at risk of losing coverage due to the removal of Medicaid expansion will most likely suffer a lack of access to preventive healthcare, mental health services and Medicaid-funded opioid treatment centers, thereby worsening the crisis. Emergency room overcrowding will return, forcing hospitals to write off large amounts of unrecovered expenses as bad debt. Hospitals, in turn, will increase their prices for insured patients.

Ultimately, this will increase out-of-pocket expenses for high-deductible plan holders who get their group insurance through their employers. It will also increase the cost of the premium for the employers, which they will try to pass on to their employees in terms of higher employee contributions or reduced coverage. In other words, the ripple effect of ACA’s demise will be felt across the population continuum – not just the vulnerable population who are mostly invisible to many of us.

Alternative Proposals

As the 2020 election process heats up, some Democratic Party candidates are promoting the idea of universal healthcare, the real cost of which is unknown. While 32 of 33 developed countries in the world have universal healthcare using various models of payments, a Congressional Budget Office calculation would be required to see if any of the proposed universal healthcare plans are indeed the better way to go. What, if any, model will work for the United States? Healthcare now finds itself at the center of all the political maneuvering.

This brings to the fore an interesting question: Instead of striking down the ACA, would it make sense to find other meaningful ways to tackle the problem of vulnerable and high-utilizer populations so that their healthcare cost could be controlled? Because 5 percent of the population accounts for 50 percent of the cost, isn’t it a better strategy to tackle the root of the healthcare issue? The ACA was launched almost a decade ago to do just that with a goal to implement payment models such as value-based care and care delivery concepts like integrated behavioral health and whole person care. Alternative models such as “state high-risk pool” that create a pool of money for the most vulnerable populations were also suggested, but given their poor performance record in the past, they didn’t appeal to the public. There is no silver bullet to fix the healthcare problem. 

Healthcare Needs a Longer Runway to Change

It is unlikely that any party can come up with a game-changing plan that would reduce cost, pay providers and pharma companies large sums of money to foster innovation, keep premiums low and also provide access to healthcare for everyone. Something has to give; the questions is what? Could that be price regulation? Technology can help, but only to a certain degree. New technology comes at a cost. Entrepreneurs and their investors and shareholders are not in it for philanthropic reasons. Aging and longer-living populations will require more care in the coming decades.

Technology will certainly make ACA’s provisions better over time, but the country needs to provide a longer runway for this multi-trillion-dollar industry to take off and change course. The healthcare industry should not be disrupted or upheaved through “shock and awe” policy or technology. Yes, it could be a decade or more before we have a robust system in place that is different from the system of the past that prevented low-income people from accessing healthcare outside of the emergency room. It is an ultra-marathon, and we should tune our expectations accordingly.