More than a Year Later, Affordable Care Act Still a Major Issue

Since President Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law in March 2010, several provisions of the legislation have been enacted. However, healthcare reform remains a divisive political issue, consumer opinions vary, more than half of the states are challenging the law in courts, and the projected costs associated with implementing the reform are still uncertain. In a video posted on the official government Web site (https://www.healthcare.gov) explaining the ACA, Department of Health and Human Services Secretary Kathleen Sebelius touted the ACA for its expansion of healthcare benefits to more US citizens as well as its mandate that health insurers spend a minimum of 80% of their premiums on patient care. Ms. Sebelius also discussed a few of the benefits of the new law that have been implemented: health plans cannot deny, exclude, or limit benefits to people <19 years of age based on a preexisting condition; people in some plans gained access to free preventive services such as screenings, vaccinations, and counseling; beneficiaries who reached the coverage gap in their Medicare Part D prescription drug coverage receive a 50% discount on covered brandname drugs; and businesses and nonprofit organizations with <25 employees can qualify for 35% and 25% tax credits, respectively, to help defray their insurance costs. “Over the last 12 months, our department has been working hard with patient advocates, doctors, nurses, with governors and mayors and community organizations all throughout this country,” Ms. Sebelius said. “We’ve begun to usher in a new era where patients, not insurers, are in charge of their healthcare. Americans are already enjoying new protections, greater freedom, and lower costs.… As the rest of this historic law is put into place, we can look forward to a healthier future for ourselves and for our children.” Still, many aspects of the law do not go into effect until 2014, including the requirement that individuals purchase health insurance if the minimum policy does not cost >8% of their monthly income. People who do not buy insurance will be fined. That provision, termed the individual mandate, has led to heated debate and court challenges. On December 13, 2010, federal judge Henry Hudson of Richmond, Virginia, ruled in favor of the state of Virginia and said that forcing people to obtain insurance was unconstitutional, although he refused to suspend the implementation of the law while appeals are heard. In previous cases, federal judges in Virginia and Michigan upheld the individual mandate. In addition, on January 31, 2011, federal judge Roger Vinson of Pensacola, Florida, declared the individual mandate was unconstitutional and that the ACA should be voided. Judge Hudson had said the individual mandate should be disbanded but the rest of the law should be kept intact. The plaintiffs included governors and attorneys general from 26 states, including 25 Republicans. “Implementation would continue apace,” a senior administration official told the New York Times after the ruling. “This is not the last word by any means.” Of the 4 cases that have challenged the law, 2 judges appointed by Democrats upheld the law while 2 judges appointed by Republicans ruled against the ACA, the Wall Street Journal reported. According to a Bloomberg article, a Richmond federal appeals court was scheduled to hear the Obama administration’s appeal of the Virginia case on May 10, while an appeals court in Cincinnati will hear the appeal on June 1. The appeal involving the 26 other states will be heard on June 8 in Atlanta, and a court in Washington, DC, will hear the appeal later in 2011. Many experts believe the Supreme Court will eventually determine the law’s constitutionality. Meanwhile, polls taken a year after President Obama signed the ACA indicate that consumers’ reactions are mixed about the legislation. A CNN/Opinion Research Corporation survey released on March 23 found that 37% of respondents supported the measure compared with 59% who opposed it. In March 2010, the poll showed 39% support and 59% opposition. In addition, according to a Kaiser Family Foundation poll released in March, 46% of the respondents had favorable views of the ACA, while 42% held unfavorable views. The numbers were nearly identical to a poll from April 2010, when 46% of respondents were in favor of the legislation compared with 40% who opposed it. The costs of the bill are also a major source of debate. On March 30, the US House of Representative’s Energy and Commerce health subcommittee convened a hearing titled the True Cost of PPACA: Effects on the Budget and Jobs. Between 2012 and 2021, the ACA is expected to reduce federal deficits by $210 billion, according to testimony from Douglas W. Elmendorf, director of the nonpartisan Congressional Budget Office (CBO). If the ACA is repealed, which is unlikely, the CBO estimates there would be a net increase in federal deficits of $210 billion from 2012 through 2021. However, the projected decrease may be overstated, according to testimony from Richard S. Foster, chief actuary for the Centers for Medicare & Medicaid Services (CMS). CMS projected that the ACA contained provisions that would result in net Medicare savings of $575 billion from 2010 through 2019 and decrease payments to providers. Mr. Foster said that simulations from the CMS Office of the Actuary indicate approximately 15% of Medicare Part A providers would be unprofitable because of the payment changes and that some providers may stop participating in the Medicare program. He hypothesized that lawmakers would likely prevent the Medicare cuts, thus raising the costs of the ACA. Even Mr. Elmendorf admitted that the CBO’s projections are “quite uncertain” because they require assumptions regarding technical, behavioral, and economic factors and that “the actual outcomes will surely differ from those estimates.” The CBO assumed that the legislation would remain intact through 2021 as it is presently constituted.