Question

• Will the Affordable Health Care Act be able to continue to provide a system that can accommodate the needs of aging Americans? Will it continue to support the needs of all Americans? It has continued to survive despite multiple political attempts to discredit and dismantle it. Americans indicate health care as their number one concern. Support your position, remembering to maintain an academic focus on the issues.

Answer 1

The Affordable Care Act (ACA), enacted in 2010, dramatically changed the U.S. health care landscape. The law's goals were to reduce the number of uninsured, make coverage more affordable, and expand access to care. To accomplish this, the law expanded eligibility for Medicaid and created new marketplaces where people without employer coverage could buy policies directly from insurers. It uses a carrot and stick approach to promote enrollment. Most adults are required to have health coverage or pay a fine; and moderate-income individuals receive premium subsidies to buy policies in the new marketplaces.

Since the ACA's adoption, an estimated 20 million people have become newly insured, and approximately 24 million people have gained access to subsidized or free care through marketplace tax credits and Medicaid expansion. Despite these successes, the law faced strong political headwinds from the outset. There have been repeated calls from both sides of the political spectrum to repeal the law and replace it with alternative reforms or to modify the law to address other goals.

Using COMPARE, researchers have examined the impact of many configurations of health insurance in the United States, including:

• maintaining the ACA with no changes
• repealing the law with no replacement
• replacing the law with a single payer system
• replacing the law with other measures that address coverage expansions through Medicaid and the individual market

Research has also examined the impact of retaining the ACA while modifying key provisions, including:

• repealing the individual mandate
• modifying tax credit subsidies
• revising market regulations
• modifying Medicaid expansion

The ACA remains in effect as of this writing. Under the status quo, analysis conducted in 2015 estimates that 251.6 million Americans will have health insurance in 2017. The number of uninsured is estimated at 26 million. Out of pocket costs for an enrollee in the individual insurance market average $3200 for the year.

Three alternatives to the ACA and a fourth that makes substantial changes (the American Health Care Act [AHCA]). The first would repeal the ACA with no replacement; the second would replace it with a single-payer approach; the third (the CARE Act), would overhaul the ACA's market regulations and Medicaid expansion, as would the AHCA.

If the ACA were fully and immediately repealed, with no replacement, the number of insured Americans would drop by 19.7 million to 231.9 million in 2017 as estimated by analysis conducted in 2016. Out-of-pocket costs for an enrollee in the individual market would average $7400 annually, an increase of $4200 over the status quo. Repeal would increase the federal deficit by $33.1 billion annually compared with the status quo, largely because it would eliminate the ACA’s revenue-raising provisions.

1. Adopting the American Health Security Act, introduced by Senator Bernie Sanders in 2011. The plan is a Medicare-for-all proposal that would replace the ACA as well as Medicare, Medicaid, and SCHIP with uniform, single-tiered coverage managed by the federal government. The plan would not allow private health insurance. There is little or no cost sharing for enrollees.
2. The Health-Insurance Solution, a plan focused on catastrophic coverage in which Medicare and Medicaid continue and all other legal U.S. residents have income-dependent coverage. Individuals also have the option to purchase supplemental private coverage.

The analysis, conducted in 2015, assumed that a comprehensive single-payer plan would provide all 311 million legal residents of the United States with coverage in 2017. The only uninsured would be 11 million undocumented immigrants. Relative to estimated spending under the ACA in 2017, this scenario would increase national health care spending by $435 billion and increase federal health care spending by $1 trillion. When other potential savings and costs (i.e., administrative and implementation costs, reductions in drug and provider prices), the average net effect on national health care expenditures was $556 billion in savings, but with a very large range—from a savings of over $1.5 trillion to increased spending of $140 billion, depending on the actuarial value of the coverage and other design and implementation details.

Under the catastrophic-plan scenario, the same total number of Americans would have coverage—311 million in 2017—as under the comprehensive plan, but would have coverage through a variety of sources. An estimated 203 million Americans would have coverage under the single payer plan, with other Americans covered by Medicare, Medicaid, and other sources. This scenario reduces national health care expenditures by $211 billion and federal expenditures by $40 billion relative to the ACA.

The study's dollar estimates are not comparable to the other results presented in this paper because they refer to a different baseline. However, in sum, the comprehensive scenario with generous benefits would be very expensive, while the catastrophic scenarios with income-dependent coverage would be cost-saving but provide fewer health insurance benefits.

The Patient Choice, Affordability, Responsibility, and Empowerment Act (CARE) was an alternative to the ACA offered by Sens. Richard Burr (R–N.C.) and Orrin Hatch (R–Utah) and Rep. Fred Upton (R–Mich.) in 2016. It proposed:

• eliminating the ACA’s individual and employer mandates,
• loosening regulations on insurers,
• rolling back funding for Medicaid expansion, and
• eliminating the ACA's taxes and fees.

It also offered tax credits to low-income individuals to help them purchase insurance, but using a structure different from the tax credits under the ACA. The CARE Act would offer a "premium support" type tax credit, meaning that—even though they are based on income and family size—they are not adjusted to account for regional variation in premium levels or health care cost growth, and thus enrollees are responsible for any difference between the amount of the tax credit and the cost of the premium.

The American Health Care Act (AHCA) is an alternative to the Affordable Care Act, first introduced in the House of Representatives in March 2017, and eventually passed by the House, with amendments, in May 2017. Though not technically a repeal, the AHCA makes sweeping changes to the ACA. Its main features include:

• Repealing the individual and employer mandates
• Instituting a continuous coverage requirement under which individuals must maintain coverage without a gap else face an automatic one-year premium surcharge of 30 percent
• Changing the ACA's age-based rate banding from 3:1 to 5:1
• Replacing income-based subsidies in the individual market with fixed, age-based subsidies whose generosity increases with age
• Converting federal Medicaid funding to a per-capita allotment, ending the option for states to expand Medicaid in 2019, and, after 2020, providing new enrollees with the same per-capita allotment as adults who were eligible before 2014

The ACA uses a carrot-and-stick approach to promote enrollment. The carrot is the tax credit that subsidizes premiums for low to moderate income people who buy insurance in the marketplaces. These subsidies are progressive, providing the largest amounts to low-income individuals. The stick is the individual mandate, which requires most adults to obtain coverage or pay a fine. In 2017, the fine for not having coverage was $695 per adult and $347.50 per child or 2.5 percent of income, whichever is larger.

The individual mandate has generally been unpopular and has been criticized and challenged by opponents, sometimes on grounds that it is intrusive and burdensome, sometimes on more pragmatic grounds that it is ineffective as a spur to enroll. Proponents argue that it is critical to promoting enrollment, especially in the marketplaces.

Several Republican proposals, including the AHCA, have replaced the individual mandate with a requirement that people maintain continuous insurance coverage or face a penalty. Like the individual mandate, a continuous coverage requirement is intended to discourage individuals from waiting until they get sick to buy insurance. Under this requirement, individuals who let their coverage lapse risk being denied coverage in the future. When these individuals attempt to re-enter the market, insurers can charge higher prices, refuse to cover specific health conditions, or deny coverage altogether. It is likely that repealing the individual mandate would tend to cause healthier people to drop coverage in the individual market, which would also lead to an overall increase in premiums. At the same time, the continuous-coverage provision would likely cause some others to stay enrolled, particularly older adults for whom the 30 percent upcharge represented a larger amount relative to that faced by younger enrollees.