Obamacare: Myths and Realities Janet Hankin, Sociology Allen Goodman, Economics

Background

The Affordable Care Act a.k.a. Obamacare: What is it? A major goal of the Affordable Care Act is to put American consumers back in charge of their health coverage and care. It puts in place comprehensive health insurance reforms that will hold insurance companies more accountable, lower health care costs, guarantee more health care choices, and enhance the quality of health care for all Americans. 

How does it work? Expands Medicaid for states that want federal money Subsidies to help small businesses and individuals w/ modest income to purchase private health insurance. New marketplaces to purchase insurance by employers and individuals More level competitive environment Government will subsidize premiums for those 138%-400% of FPL

Uninsured Insurance must now cover children regardless of their health problems Cannot refuse adults coverage because of preexisting conditions Now allows people under 26 to remain on parents’ health insurance plans Insurers cannot charge sicker people more Premiums must be fair and must not discriminate by sex

Incentives To Insure More Workers As of 2016, if employers have 50 or more employees, they must provide coverage which meets minimum value and affordability standards, or pay $2K per employee. Small employers get tax credits for providing coverage (< 25 workers).

Essential Health Benefits – 1 Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment

Essential Health Benefits – 2 Prescription drugs Rehabilitative and habilitative services and devices (services and devices that help people keep, learn, or improve skills and functioning for daily living) Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care

Other Changes Stress on prevention and avoiding disease Means earlier detection of illness when treatment costs less. No copayments or deductibles for immunizations, screening for many illnesses from cancer to depression, checkups Expand pool of primary care doctors and nurses—cost less than specialty care

The ACA Will Kill Jobs MYTH Fear that employers will switch to part time workers to avoid provision of health insurance

The ACA Will Kill Jobs REALITY Not clear Argument was premised that if a single employer must raise wages, costs will be too high, and they’ll lose money. This is not the same if ALL employers must raise wages. Similar to modern minimum wage arguments. No evidence that there was a major switch to part-time workers. Unemployment rate (August 2016) is slightly below 5%

The ACA Will Not Improve Health Care System MYTH

The ACA Will Not Improve Health Care System REALITY The ACA Will Not Improve Health Care System Sommers, et al. (2015), for 2012-2015 found a clear downward trend among those reporting their health conditions as “fair or poor.” Analyses of subsamples, e.g., by race/ethnicity and by states that participated in Medicaid expansion vs. those that did not, revealed broad gains following the initial enrollment period. Sommers, et al. (2016) determined that compared to Texas, Medicaid expansions in Kentucky and Arkansas led to “… major improvements in access to primary care and medications, affordability of care, utilization of preventive services, care for chronic conditions, and self- reported quality of care and health.”

The Number of Uninsured Will Not Decline MYTH Fear that Americans will not buy insurance on the health care exchange, healthcare.gov

The Number of Uninsured Will Not Decline REALITY

The Number of Uninsured Will Not Decline REALITY

States will not expand their Medicaid MYTH States will not expand their Medicaid

States will not expand their Medicaid REALITY States will not expand their Medicaid

2015 Percent Uninsured by State LT 10 10+ 12+ 14+ 16+

2013, 2014, 2015 – Percentage Uninsured LT 10 10+ 12+ 14+ 16+ 2013 2014 2015

Access to Health Care under ACA Will Be Difficult MYTH Access to Health Care under ACA Will Be Difficult Insurer competition in the marketplaces has led to the proliferation of health plans that offer a narrow, or limited, network of health care providers at a lower price than plans with broader networks. This has led to concerns over access to care.

Access to Health Care under ACA Will Be Difficult REALITY Access to Health Care under ACA Will Be Difficult More than half (54%) of people who were enrolled in a marketplace plan for the first time or who had changed plans said they had the option of choosing a less expensive plan featuring fewer doctors or hospitals. Of those, 41 percent selected the limited network plan. Across all marketplace plans, more than three- quarters (78%) of enrollees who either recently enrolled or had changed plans reported being very or somewhat satisfied with the doctors covered by their insurance. Among these adults, 64 percent reported their plans have some or all of the doctors they want.

REALITY

REALITY

REALITY

Costs Will Rise under ACA MYTH Costs Will Rise under ACA

Costs Will Rise under ACA SOME VALIDITY Costs Will Rise under ACA Yes, in two ways. Yes, there was a major increase in enrollment, which grew faster than the economy. We have seen in the past that enrollment increases lead to expenditure increases, and growth in the NHE share. Yes, in the sense that some transitions to managed care increased growth in costs. In a transition to managed care Medicaid, the net insurance cost rises as Medicaid Health Maintenance Organizations (HMOs) collect more in premiums than they pay out in benefits while government administrative costs are largely unaffected.

Costs Will Rise under ACA ALSO Costs Will Rise under ACA Schoen (2016) argues that a number of ACA reforms, particularly related to Medicare, have likely contributed to the slowdown in health care spending growth by tightening provider payment rates and introducing incentives to reduce excess costs. Among these are various provisons that reduced payments to hospitals, other providers, and private Medicare Advantage plans; and there are several incentive programs designed to improve quality and lower costs.

High levels of public dissatisfaction with ACA MYTH

High levels of public dissatisfaction with ACA REALITY High levels of public dissatisfaction with ACA

High levels of public dissatisfaction with ACA REALITY High levels of public dissatisfaction with ACA

High levels of public dissatisfaction with ACA REALITY High levels of public dissatisfaction with ACA

Bottom ________________ Generally a positive impact in terms of: Accessibility Coverage Satisfaction Quality of Care Employment Impacts

Bottom ________________ Not sure: Costs seem to be rising at least as much as might have been expected. Some issues in terms of “adverse selection” – those who are unhealthy seem to enroll (when they need care), and then drop (when they’ve received the care). This is not a good thing in the sense of insurance markets.