How to repeal and replace the Affordable Care Act aka Obamacare

One of the most prevalent discussions post the recent Republican win of the Presidential elections, is the significant changes expected to the healthcare policy of the country.

Let’s set aside the political tone of the debate for a while, and take a step back to review healthcare, and the policy surrounding it, for what it is.

U.S. Healthcare:

• According to Centers for Medicare and Medicaid Services (CMS), U.S. health care spending grew 5.8 percent in 2015, reaching $3.2 trillion or $9,990 per person. As a share of the nation's Gross Domestic Product (GDP), health spending accounted for 17.8 percent.
• Of the total $3.2 trillion, hospital care accounts for the largest share, about 32 percent. Doctors and other clinicians account for nearly 20 percent. Prescription drugs bought through pharmacies account for about 10 percent.
• Increasing costs have been the thorn on the side of U.S. Healthcare for decades. According to another study, about 5 percent of the population, consisting of those most ill and seeking medical intervention, account for nearly half the spending in a given year. Meanwhile, the other half of the population has little or no health care costs, accounting for 3 percent of spending.

These statistics reflect the importance of managing U.S. health as responsibly as possible by any incumbent government.

And the goal is pretty obvious;

• Control healthcare costs,
• Ensure that all Americans are covered and have access to healthcare across the country,
• Drive reform in healthcare access and utilization and
• Foster innovation and rapid forays into keeping people healthy and combating disease.

The incumbent democratic government enacted the Affordable Care Act (ACA) of 2010 in view of acting on the above. Let’s review what did the law really do over the last several years:

• ACA has provided coverage to about 20 million people between marketplace plans and Medicaid expansion. It is clear that ACA had its share of issues as seen in premiums that have continued to rise drastically, skewed risk corridors and adjustments that left insurers with losses and co-ops bankrupt and as a result, several insurers leaving select ACA markets.
• According to Centers for Disease Control and Prevention, the uninsured rate fell from about 14.6% in 2008 to a record low of 8.6% in early 2016. This means more uninsured have coverage now than ever before, which also means that they have influenced heavy utilization of healthcare over the last few years, thus increasing costs. The expectation was that this would continue as the number of uninsured finding new coverage continues to go up, eventually leveling out the initial high utilization after a few years. With about 4 open enrollments under ACA so far, we will not know for sure with a change in leadership and as a result, a case of repeal of ACA.
• The National Health Interview Survey by the National Center for Health Statistics showed a dramatic spike in the number of people who enrolled in high-deductible health plans, which require them to directly pay a larger share of their out of pocket medical costs, as opposed to their plan taking on that cost. Insurers and employers have been trying to limit premium price increases, and discourage unnecessary use of health services through high deductible health plans and co-sharing of healthcare costs with consumers from years before the enactment of ACA itself.
• With about 10,000 people becoming Medicare eligible every day, an aging population continues to drive healthcare usage. By 2025, government plans such as Medicare, Medicaid etc. will account for nearly half of healthcare spending at about 47%. ACA tried to influence cost control moving to value based payments for Medicare and encouraging medical professionals to keep people healthier and out of hospitals. However, it did increase costs by expanding Medicaid and as a result, covered more people than ever before.
• There is a continuous push to ensure that the younger also continue to have continuous coverage to ensure risk pooling is more uniform and allows for sustained costs for longer periods of time.
• In 2015, about 86% of those covered under ACA have taken advantage of the subsidies provided to buy insurance. These subsidies that amount to billions of dollars are crucial to sustain increased coverage and as a result, this means more costs.

The most important issue that needs to be solved here by any able leader trying to steer healthcare in the direction of its own health, is its costs. How do you sustain coverage of an increasing number of Americans, continue to make a dent in the uninsured rate, only foster essential usage of healthcare, slow down the costs of healthcare utilization and retract subsidies in a manner that it doesn’t affect coverage for those that most need it?

This is the several trillion-dollar question that the new government is now tasked with, to answer using their repeal and replacement plan.

As the new administration begins on their new proposed plan, its important that they plan for a stable and successful transition from ACA, not a knee jerk reaction leaving millions uninsured, those that have been painstakingly insured over the years, by spending several billions of dollars.

The debate oscillates between immediate repeal followed by a replacement (a couple of years down the line) on the one end, and prior planning followed by a phased out repeal and replacement on the other. Its important to send messages of a stable healthcare system to our citizens as they are in the middle of an open enrollment where they are choosing plans to cover themselves and their families, in the year when we will have a new President and a government that will work on putting everyone into a new healthcare system.

Its important to recognize the work done through ACA for what it is, embrace its successes and continue to grow on them while introducing changes where needed. After all, it is people’s money in the trillions of dollars that has been spent on it. Continuous coverage for everyone is a theme that works well for all Americans, rich or poor, young or old. Affordability is based on continuous coverage for everyone. How do we make that happen? Stick and carrot approach, incentivization, penalties, all are game.

To ensure pre-existing health conditions are covered is also to the benefit of everyone. But, this is only possible when plan costs remain affordable. And they will remain affordable, if everyone is covered. See, this is all very much interlinked.

Repeal and replace will work successfully in an environment of a stable transition, education, and agreement and finally change. That is what the new administration should focus on, to find success in what they plan to implement with their mark on it.

#ACA #affordablecareact #Obamacare #HHS #CMS #Trumpcare