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The Trillion Dollar Revolution
How the Affordable Care Act Transformed Politics, Law, and Health Care in America
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With President Barack Obama’s signature on a Tuesday morning, March 23, 2010, the Patient Protection and Affordable Care Act (ACA) officially became one of the seminal laws impacting American health care.
It was the largest reform of the nation’s health care system since Congress and President Lyndon Johnson created Medicaid and Medicare nearly half a century before. One could argue it was even larger, as the ACA made structural reforms to both of those programs as well as to the private health insurance market and the nation’s health care delivery system. Alongside its scale and import, the ACA has also undoubtedly been one of the most controversial laws in modern American history.
As we approach the 10-year anniversary of its passage, it is fitting to look back at the past decade and capture the history of the law, its successes, and its challenges. As we embark on that retrospective, we should do so with a dose of humility. Assessing the full impact of the ACA ten years after its passage is important but probably incomplete.
The lessons we can learn from this law’s passage and its implementation can illuminate much about American politics and policy, our health care system, and the ways that decisions made by policymakers affect the lives of the American people.
HOW TO BEGIN an analysis of such a comprehensive and complex law? There are innumerable ways to measure and analyze our nation’s health care system. But I have always found it most helpful to focus on the 3 questions that matter most to American patients and their families. First, is health care accessible? Second, is it affordable? And third, is it quality care?
Those 3 aspects—accessibility, affordability, and quality—and their impact on the health of the American people are the through-line of the history of the ACA and this book. And these aspects will guide policymakers as they consider future reforms to American health care.
From where I sit and the experiences I had as secretary of Health and Human Services, a few things are clear.
First, the ACA helped more Americans access health care. An estimated 20 million Americans gained coverage due to the ACA’s Medicaid expansion, subsidies to afford private health insurance through the Health Insurance Marketplace, and various reforms to the health insurance market like allowing young adults to stay on their parents’ health plan until they turn 26. These reforms led to the lowest uninsured rate in American history.
Many of those previously uninsured were the people who needed coverage the most. Cancer survivors, people with chronic conditions, and others who, in the past, were denied coverage because of a preexisting condition were finally protected by the ACA’s ban on that practice.
In the years since, we have also uncovered abundant evidence that access to coverage translates into greater protection from financial risk, greater access to care, and, subsequently, better health. Housing stability also improved, as declines in evictions have been associated with the ACA’s expansion of Medicaid.1 Nationwide, from 2010 to 2016, there was a nearly 30% drop in the share of nonelderly adults skipping treatment or not filling a prescription due to cost.2 The ACA’s expansion of Medicaid is probably its most studied policy, and researchers have found it is improving access to care, financial security, and health outcomes, including reducing premature deaths.3
Second, the ACA led to significant progress on affordability. As already noted, the ACA helped more people pay for health care services. Among people gaining coverage, it has led to lower medical debt and greater access to credit.4 As a result, feelings of financial strain caused
by health care have also dropped.5 By reforming Medicare payments and launching innovative payment models that have been imitated by many private payers, the ACA has contributed to slowing health care cost growth across the entire economy.6 Nonetheless, issues like rising deductibles and the struggles of middle-class families to keep up with health care costs are still quite problematic and a key focus for policymakers today and in the future.
Finally, the ACA massively improved the quality of coverage for people who are currently covered through the individual market, as plans are required to cover essential health benefits; through their employer, as plans are no longer allowed to create lifetime or annual limits on coverage; or through Medicare, as the ACA closed the “donut hole” in Medicare Part D and now covers preventive services. It also improved the quality of care by reducing re-admissions and hospital-acquired conditions. Yet the United States still has work to do, as we fall behind other major developed nations in many measures and must do more to address behavioral health crises and infant and maternal mortality.
Among these 3 measures—the accessibility, affordability, and quality of American health care—the Affordable Care Act has directly led to significant progress.
ALTHOUGH NONE OF these achievements means our work on these issues is done, each should be seen in the broader context of an effort—nearly unprecedented in modern American history—to undermine and attack the law.
From the early resistance to a traditional technical-fixes bill to the litigation filed the first day the statute was enacted, resistance to the ACA only grew. Modern American history has other examples of resistance to expansions in coverage. In 1961 the American Medical Association hired a well-known actor to record an LP warning that, if the newly proposed “Medicare” program passed, “We are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”7 But a couple of decades later, when that actor became president, Ronald Reagan would not only protect Medicare but would expand it himself, adding protections for the elderly and disabled against catastrophic health costs.8
Opponents of the ACA have yet to accept it as part of the health system. The sustained repeal efforts through legislation, litigation, and executive action at the state and federal levels have all too often distracted us from building on progress and have taken a toll on many of the law’s provisions and, thereby, the Americans who depend on them. Today, continued efforts by the current administration and others to undermine the legislation have zeroed out the individual mandate, limited access to contraception, drastically limited the outreach efforts during open enrollment periods, and weakened the ACA in many other ways. Some Americans find coverage slipping out of reach, as a modest but all-too-real increase in the uninsured rate since 2016 demonstrates.9
Despite all of this, the law at 10 years has proven more resilient than expected. Many times throughout the past decade conventional wisdom considered the ACA finished. Through midterm elections, Supreme Court decisions, a presidential reelection, and an election in 2016 that saw the legislative and executive branches united around repeal, the ACA has nevertheless survived. In fact, it has only grown more popular.10 The 2018 midterms, where health care was listed as voters’ top priority, was in many ways a rejection of repeal.
How did the law survive? In 2017 the law faced an opposition united in its commitment to repeal the law—an opposition equipped with the legislative tools through reconciliation to do so with a simple majority in both houses, and—after years of a guaranteed, protective veto from the executive branch—there was a president ready to offer his signature.
It was in this precise moment that the through-line of the law in many ways became its lifeline. Access, affordability, and quality were not just abstract metrics; they had real, tangible impacts on Americans’ lives, and the uncertainty of repeal, the opacity of the process, and the warning signs from nonpartisan analysts like the Congressional Budget Office motivated a remarkable grassroots effort.
The lived examples of the ACA’s progress motivated organizations and constituents as they appealed to their legislators to slow the process down and consider alternative routes to improving American health care.
By the slimmest of margins, the ACA survived and today remains the law of the land.
DESPITE THE PROGRESS of the ACA, there is more to do as we mark ten years. Policymakers and politicians continue to debate how to make progress on affordability, access, and coverage. The questions of repeal are also still with us. Currently there is yet another federal case, Texas v. Azar, in which 18 state attorneys general and the Trump administration Department of Justice argue that the entire ACA should be struck down.11 We are, yet again, at a crossroads on health care.
In the midst of it all are countless Americans who have engaged with this journey in Washington and around the country—from legislative chambers to hospital corridors—to make our health care more affordable, more accessible, and higher quality and to refuse to go backward because they know that health care in America is personal.
What, then, is the legacy of the ACA? In short, it was a historic legislative achievement and a seminal step in American health policy. It led to great progress on access and some on affordability and quality. And yet there is still more to do.
The insights in the following chapters, gathered by Ezekiel J. Emanuel and Abbe R. Gluck, outline the journey and provide a rich context. The pages of The Trillion Dollar Revolution: How the Affordable Care Act Transformed Politics, Law, and Health Care in America, filled with stories and perspectives of those who were deeply involved at every step of the way, will illuminate the path we have taken so that we can more clearly see the path ahead. For it is through this kind of reflection that we can celebrate our progress and better understand the challenges that remain in our nation’s health care system. Tempered with the humility of hindsight, we can take on the unfinished business of building a health care system worthy of our great nation and worthy of the American people who rely on it.
“This is a big fu@&ing deal.”
—Vice President Joseph Biden whispering to President Obama during the ACA’s signing ceremony, March 23, 2010
“ObamaCare is a broken mess.”
—President Donald Trump, tweet, October 13, 2017
The Affordable Care Act (ACA) is arguably the most important health care legislation in US history—but it is much more than that.
The ACA has reached far beyond health care and into the corners of American politics, law, and the economy as well. It profoundly influenced our elections. Opposition to the ACA galvanized the Republicans and helped them recapture the House in 2010. But after multiple failed repeal efforts, the ACA then helped the Democrats take the House back in 2018.
The law has been subject to continuous litigation since the moment it passed. It has gone to the Supreme Court 5 times thus far and set new constitutional precedents on the reach of Congress’s power. It also has yielded important lessons about how American laws are implemented, including how much federal law can or should rely on states or the private market.
At the same time, the ACA has transformed the health care economy. It has fostered dramatic health care market consolidation, upended the way the insurance industry does business, and helped to change the daily practice of medicine and how services are paid for. It is a $1 trillion investment in universal coverage, delivery reform, and cost containment, only part of which has been successful thus far. But it also has allowed millions of new Americans to obtain insurance and measurably improved the population’s health.
Perhaps most fundamentally, the ACA seems to have shifted the baseline of what Americans understand to be the goals of their health care system. Ten years into the ACA’s lifespan, an alternative that would undo a substantial part of the law’s coverage gains no longer appears acceptable to the public. In thus changing our expectations, the ACA has paved the way for future health reforms that may extend even farther.
So is the ACA a “big fu@&ing deal” or “a broken mess”? Is it neither? Or both?
The ACA is much more ambitious than its comparable predecessor acts. Its most obvious predecessors—the Medicare and Medicaid legislation of 1965—were laws that expanded health coverage to two specific populations: the elderly and certain categories of low-income individuals. Those statutes never aspired to universal coverage—a health care system that would provide access to all Americans—rich and poor, old and young, employed or not, healthy or sick. Nor did they make fundamental changes to private health insurance or attempt to control costs or improve quality.
In contrast, the ACA targets every part of the health care system. Paradoxically, it makes these sweeping changes through an incremental strategy—a strategy that the politics of the moment required. The ACA does not wipe the slate clean or eliminate the private health care system, but instead it builds on what came before. For better or perhaps for worse, the ACA accepts the sprawling and fragmented complexity of the US health care system but seeks to make it more inclusive, more generous, more effective, and less expensive.
To say these changes are controversial is a massive understatement. The ACA has been the most attacked and—as it turned out—the most resilient piece of social welfare legislation Congress has ever passed. The law was challenged in court minutes after it was enacted and then partially gutted by the Supreme Court before its main provisions even took effect. The challenges continue to come—both in the courts and from a presidential administration that considers the ACA a “broken mess” in need of abolition. The very states that asked to implement the ACA rebelled against it from the start. Congress has tried more than 60 times to repeal it. But the law has survived—and gained in popularity in the process.
Ten years in, it is time for a critical analysis of the ACA. The authors of the essays in this volume examine the ACA’s goals and its arc of policy and politics. They look at the legal battles the ACA survived and how these battles changed American law. They examine the ACA’s impact on the health care system and economy and consider how its decade in existence will influence the health care agenda for the 2020s.
During the 2008 presidential primaries and election, health care was a major issue, maybe second only to—and intertwined with—the economic recovery from the Great Recession. The election seemed to confirm the nation’s desire for health care reform. Barack Obama was elected by a 52.9% to 45.7% margin over John McCain, and Democrats picked up 21 seats in the House and secured (with independents) a filibuster-proof 60 votes in the Senate. Obama put health care at the top of his agenda, overruling members of his team who thought he needed to focus first on Wall Street, and he created the first-ever position of White House health care czar.
Any piece of major legislation contains policy tradeoffs and political ramifications. On policy, there were many choices and many things that could not be achieved even within the Democratic Party. There were also sharp memories of President Clinton’s failed attempt at health reform in 1993–1994 and a determination not to repeat previous mistakes.
Ultimately, an incremental approach won the day. The fragmentation of the health care system between varied public programs and private insurance companies would not be swept away and a new system built from the ground up. Coverage would remain split among the different insurance programs but would be expanded in every existing category: Medicaid would be converted from a program that covered only certain categories of people (like pregnant women) to an income-linked entitlement for all lower-income Americans; Medicare saw expanded benefits, particularly in preventative care and pharmaceutical payment; the employer-sponsored health care system (which at the time covered 50% of Americans), with the tax exclusion that supports it, was retained with additional consumer protections and benefits; uninsured Americans—those with incomes from 100% to 400% of the federal poverty level (just over $100,000 for a family of 4)—were to receive subsidies to help them buy private insurance in newly created marketplaces.
There were also two fateful decisions made about the structure of the insurance marketplaces. In an effort to appeal to Republicans, the Senate made the insurance marketplaces state based rather than, as the House wanted, national. This added to the ACA’s administrative complexity—but ultimately it was not sufficient in itself to attract the votes of any Republican senators. Similarly, in an effort to appease conservative Democrats, especially Joseph Lieberman of Connecticut (by then an Independent), the plan to include a public option—a government-operated insurance offering that utilized Medicare payment rates—was dropped.
Many of the pivotal choices on coverage were made largely for fiscal reasons. The president wanted a bill that met 3 key financing criteria: (1) the total cost of the ACA should not exceed $1 trillion over 10 years, (2) half the money to pay for the ACA should come from savings in government health programs and half should come from new revenue, and (3) the law should be self-funded and not deficit financed—if anything, the ACA should pay down the national debt (which it did).
These financing decisions shaped the structure of the reforms. Because Medicaid was less expensive than purchasing private insurance in the exchanges, it was preferable to expand Medicaid to households at up to 138% of the federal poverty level (FPL) rather than covering all the uninsured through the insurance exchanges. Because of the high cost of subsidies, they were phased out at 400% of the FPL with a steep cliff rather than at higher income levels.
Complementing these new coverage provisions, the ACA also imposed new national rules that dramatically change the way the private health insurance industry does business. Insurers can no longer “risk underwrite”—reject customers or charge them substantially more or rescind their plans due to their poor health, preexisting conditions, or other individual characteristics. In addition, insurers can no longer impose annual or lifetime caps. Other key new policies include the requirement that all ACA exchange plans must offer 10 essential health benefits and that, even outside the exchanges, many preventative services (like vaccines and cancer screening) must be covered without deductibles or co-pays. Coverage of children up to age 26 on their parents’ health plan is another popular new benefit.
There was no shortage of criticism. One consistent theme was that the ACA was 90% about coverage and did little to improve quality or cost. It is true that 3 of the ACA’s 10 titles do focus on insurance access and coverage—the private insurance reforms in Title I, the Medicaid expansion in Title II, and new provisions about long-term care in Title VIII that ultimately were not implemented because they could not meet fiscal targets of being self-financing. Title III also includes significant reforms to Medicare to reduce co-pays and make pharmaceuticals more affordable. But the ACA contains many other pages directed to improve quality. For example, the law had incentives and penalties to reduce hospital readmissions and hospital-acquired conditions and to require public reporting on performance. Some key reforms did take the form of only limited programs, such as new programmatic incentives to improve integration and coordination across physicians and demonstration projects to move away from payment for each treatment—fee-for-service—to payment for holistic episodes of care—bundled payments. These pilot projects were strategic, aiming to effect broader system-wide transformation. The establishment of integrated medical practices called accountable care organizations (ACOs) is another important example of the effort to reform the delivery system and thereby improve quality and reduce costs.
Important new centers and funds were also created, including the Prevention and Public Health Fund; the Center for Medicare and Medicaid Innovation, a novel organization within CMS given the opportunity to experiment with various approaches to improving quality and reducing costs; and the Patient-Centered Outcomes Research Institute, an organization charged with investigating the clinical and comparative effectiveness of different medical treatments. There are myriad other provisions, including provisions to facilitate a generic market in biologic drugs, to reauthorize the Indian Health Service, and to enhance the medical workforce, nutrition, and more. Taken together, these new programs and incentives mark an extensive—if not comprehensive—effort to transform and improve almost every aspect of the American health care system.
Political considerations of course shaped the bill. Because of President Obama’s inclination to appeal to Republicans and forge broad coalitions to address problems and because Senator Max Baucus, as Senate Finance Committee chair, believed he could achieve a bipartisan agreement, the ACA rests on a market-oriented structure. Indeed, its foundation adopts some conservative proposals: it was the Heritage Foundation that popularized the concept of an individual mandate—the requirement that nearly everyone hold health insurance or face a financial penalty—combined with subsidies and a facilitated marketplace where individuals could purchase private insurance. That concept was adopted by the Massachusetts Republican governor (later GOP presidential nominee) Mitt Romney. (Income-linked government subsidies to enable the purchase of private health insurance has been a Republican idea dating to the 1940s.)
In the end, despite many efforts to create bipartisan legislation, it became clear that Republicans would unanimously oppose the bill. Beginning in August 2009, that position was reinforced by a series of voluble and disruptive town hall meetings that propelled to national prominence the conservative, no-compromise, Tea Party movement.
Many factors made passage possible, including some key moments of serendipity. Many political veterans, such as Obama chief of staff Rahm Emanuel, had learned the lessons of the earlier, Clinton-era failures. The administration brought in the major health care interest groups early and offered them what they needed, including omitting controversial pharmaceutical pricing regulations, to get them on board. President Obama helped give the bill needed momentum when he urged its enactment before a rare joint session of Congress on September 9, 2009. That speech also provided an example of the deep-seated anger the ACA provoked. For the first time ever in a presidential speech to a joint session of Congress, a member of Congress publicly heckled the president. Representative Joe Wilson (R-SC) shouted, “You lie!” during the address. That insult emboldened wavering Democrats to remain supportive of the law.
House Speaker Nancy Pelosi played a pivotal role. First, she ensured there would be only one bill coming out of the 3 House committees with jurisdiction over health care reform. And even more significantly, once the victory of Scott Brown in the Massachusetts Senate race to replace Senator Kennedy deprived the Democrats of a filibuster-proof 60 Senate votes to revisit any House revision of the ACA, Pelosi rallied the House Democratic members to essentially accept the Senate bill. Pelosi’s actions were an estimable feat of effective politicking that convinced the House to abandon its own bill—which had some significant differences—and made the ultimately successful vote possible.
The ACA was enacted into law on March 23, 2010. National Federation of Independent Business v. Sebelius, the challenge to the ACA that threw the early stages of implementation into uncertainty and would eventually reach the US Supreme Court, was filed the same day.1
Much has been written about the details of the ACA’s trajectory through Congress and its enactment politics. This book largely picks up where those accounts leave off. But to set the stage, Timothy Stoltzfus Jost and John E. McDonough analyze the problems that plagued the health care system in 2008 on the eve of the ACA’s drafting and explain how specific provisions in the ACA seek to address those problems. They also highlight what the ACA did not do, including failing to make significant advances in drug pricing and replacing “a fragmented, exasperating health system balkanized by public and private financing and delivery.”
Peter R. Orszag and Rahul Rekhi delve deeper into the policy tradeoffs incorporated into the ACA, especially around cost and quality. They suggest that many of the efforts—even if small and tentative—at cost control and quality improvement may have contributed positively to the slowdown in health care expenditures and “fundamentally altered the national conversation around health care expenditures among provider and insurer executives and in boardrooms.”
Joseph Antos and James Capretta offer a perspective of where they believe the ACA went right and wrong. Republicans have had a hard time articulating a coherent alternative to the ACA. The scores of efforts to “repeal and replace” failed, and the party faced additional challenges as it became clear that the public would not tolerate rolling back some of the ACA’s key benefits. Antos and Capretta present an alternative vision that is grounded more squarely in market principles focused on cost containment and emphasizing the need for consumer choice. It is interesting to note that, despite their disagreements with some of the policies behind the ACA, Antos and Capretta nevertheless embrace the new reality that, after a decade of the ACA, the goal of any new reform must include giving every American health coverage.
The Policy and Politics of Implementation
The ACA seems nearly inseparable from the last decade of politics—and the politics around the ACA affected both health policy and the broader electoral landscape.
The Obama administration faced political, policy, and technical challenges from the moment the law was signed. Kathleen Sebelius, who was the secretary of the Department of Health and Human Services (HHS) for the first 4 years of the ACA’s life, and Nancy-Ann DeParle
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