The political campaigns seem to encourage simplistic myths. As a former health insurance company chief executive and a board member of several organizations deeply involved in providing care, I have to correct the worst of them. It also helps that I have actually read the Affordable Care Act (ACA) and regulations — something even a member of Congress could do!
1. Democrats will destroy Medicare through the ACA: Actually, the law specifically prohibits a cut in benefits and protects the structure of Medicare. Many provisions are designed specifically to save Medicare, not end it.
2. Republicans will destroy Medicare through the Ryan proposal: Ironically, U.S. Rep. Paul Ryan’s plan applies to Medicare the same features as Obamacare — such as exchanges and competing private insurance plans. If coupled with variable subsidies, it should work as well for the elderly as the ACA does for the individual market. If you like Obamacare then you should also like Ryan.
3. The ACA has “raided” $716 billion from Medicare: The Medicare Advantage plan I ran was paid 95 percent of average Medicare cost per capita in the county — now that is up to 111 percent! What originally saved Medicare money now costs much more.
Ironically, health plans agreed to give up these extra payments, as did hospitals, in exchange for more enrollees and less uncompensated care. It’s part of the deal that makes the ACA work and has nothing to do with benefits or raiding.
4. Doctors will be paid less and will abandon their patients: Actually, primary care physicians’ payment for Medicaid rises under the ACA to Medicare rates and substantial extra payment is likely under Accountable Care Organizations and Value Based Purchasing if better quality is provided.
The criticism is that the ACA didn’t move far enough to pay doctors for value rather than volume.
5. The ACA is a socialist/government takeover of the health system: Socialism lost on this one since the new law depends totally on private insurance (not more government except for the Medicaid expansion). The ACA is a combination of a farmer’s market and eBay providing an organized online market site to facilitate comparison and choice among competing plans.
6. The individual mandate imposes an unfair burden on those who can’t afford insurance: This misses the reduction in average premiums due to broad participation of sick and well (no “free riders” — a big conservative concern) and subsidies that would reduce the cost for most (a $1,000 per month typical premium for a family of four would only cost $100 per month if family income were $30,000 a year and $500 per month at $50,000 annual income). It will look like a bargain.
7. Excessive regulation of insurance will drive up cost: Individual policies will be far cheaper due to lower sales cost, although some may cost more than stripped-down current plans since they cover more.
Covering the cost of family members up to 26, preventative services, pre-existing conditions and guaranteed issue — when spread across a larger population — will be a return to the way Blue Cross plans covered everyone at a single community rate in decades past. It’s all about redistributing cost, not increasing it, permitting payment for those who need it while assuring those who don’t of its availability — a pretty basic insurance concept.
8. Insurance companies won’t want to participate due to higher risk and limited returns: Actually, the risk reduction provisions in the final regulations protect insurers from adverse selection (too many sick versus healthy enrollees), bad luck (reinsurance against very high cost cases) and bad guessing (restrictions on gains or losses). These methods, proved on Medicare Advantage and Part D drug plans, will attract many competitors to the exchanges.
With lots of choice, shoppers will be happy. But both are dependent on the mandate. In Utah, with voluntary participation, very few participate, whereas in Massachusetts everyone does.
9. It’s all funded with a huge tax on the middle class: The “tax,” as we must call it after the Supreme Court decision, is a modest additional payment on federal tax filings after 2016 on the absence of demonstrated coverage. The big new money funding the ACA comes from an extension of the normal Medicare tax to high income and investment income. Rich people are paying most of the extra freight. Almost everything else is a redistribution of payment among existing players — not taxpayers or patients.
10. We have to address costs first before expanding coverage. The ACA includes almost every payment and delivery innovation ever advocated on either side of the aisle. The others proposed have little effect (interstate insurance competition cuts out state regulation) or are not federal issues (tort reform) or just cut provider payments.
There are many areas of legitimate difference, but the above are not among them. Let’s talk about the reality of what the law says, not political images and slogans.
Silvers teaches at the Weatherhead School of Management and the Medical School of Case Western Reserve University. He was chief execuitve of QualChoice Health Plan and now is a board member at the Joint Commission, MetroHealth and SummaCare.