Predicting the Future of Obamacare Post-Election: Wilensky and Oberlander

Posted on | October 11, 2016 | Comments Off on Predicting the Future of Obamacare Post-Election: Wilensky and Oberlander

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Gail Wilensky and 
Jonathan Oberlander

Mike Magee

Negative leaders can deny change, resist it, ignore it – for a period of time. But they can’t escape it. And inevitably, they are eventually overtaken by it. Witness the current Trump dilemma. The leadership of the Republican party, following the defeat in the 2012 election, correctly acknowledged the demographic reality of a change in majority white control of elections in America, and suggested a course correction that would acknowledge that change. But they were unable to implement their own recommendations. What they are witnessing four years later is that, while their current candidate can fan the fires of fear to secure support by a portion of that electorate, the reality of constantly advancing change assures that their loyal voter block will continue to shrink. While they can not change, change itself – its direction and its destination – continues unabated.

If that harsh reality is true for political parties and their candidates, it is equally true for the country and its institutions designed to address citizens needs. And of these institutions, none is more powerful, has a greater financial reach, or is more essential to reaching full human potential than our health care system. It too, must adjust to change and demographic realities. For example, nothing can change the current reality that we are aging, and as we age, the health care needs of America’s multi-generational families will grow in size and complexity. In the same vein, nothing will stop the progress of information technology and its role in exposing non-transparency in pricing and lobbying and hidden coalitions, whose exposure will increasingly force our citizens to confront inequities in access, quality, and outcomes.

In this week’s New England Journal of Medicine, veteran health policy experts Jonathan Oberlander and Gail Wilensky reflect on health care legislation’s unique pivot point, Obamacare or the Affordable Care Act, and look at the likely impact on the legislation with a Democratic (Oberlander) or a Republican (Wilensky) victory.

A Democratic Victory:

1. While the ACA has resulted in a decline in the nation’s uninsured rate from 48 million to 27 million, the rising cost of insurance, especially for those at the upper levels of poverty (200% of the Federal Poverty Limit), where a family plan on average now costs more than $20,000 a year, is untenable. Translation: some changes will be required to address their needs.

2. There is also a problem with rising deductibles. This averaged $303 in 2006, but hit $1,077 in 2015. Hillary Clinton’s plan is to provide a refundable tax credit for citizens with high out-of-pocket deductibles.

3. Three major insurers (UnitedHealthcare, Humana, and Aetna) are planning to curtail their involvement with the ACA exchanges. They complain that the pricing differential they are allowed between the healthiest and sickest enrollees (3 to 1) is not adequate to cover their financial risk. In their view, we should go back to 5 to 1. It is unlikely they will force the government hand on this, any more than reversing the provisions that prevent exclusion based on prior conditions. Instead their stance will likely move both the federal government and state governments toward “public options”, whether through downward extension of age eligibility for Medicare, or expansion Massachusetts-like universal coverage plans to other states.

4. A Democratic victory would likely cause most Republican led states that have resisted Medicaid expansion under ACA to give up their resistance. Their abandonment of a stance that has been financially self-destructive to their states could be hastened by changes that assure permanent, near 100% federal funding of Medicaid into the future. This would come with greater standardization of rules nationwide governing the coverage package. Any move toward nationalization would carry with it more focus on cost and efficiency, with data transparency leading the charge to address price gougers, research result hiders, sloppy prescribers, and outcome outliers.

A Republican Victory:

1. Gail Wilensky predicts the likely outcome of the presidential race to be a Democratic victory, with the House remaining under Republican control, but the Senate majority potentially shifting to the Democrats. In this light, she outlines the current Paul Ryan’ health care plan versus Donald Trump’s which bundles an outright repeal of the ACA with allowance of drug reimportation and negotiation of Medicare Part D drug prices.

2. Were the Ryan plan to be implemented, unchanged by a Democratic controlled Senate or presidential veto, we could expect:

a) Medicare age eligibility would gradually increase to age 67, and Medicare would become a “premium support” , partially privatized program.

b) High deductible plans, which deliberately increase consumer focus on cost, would be promoted through government supported Tax Savings Accounts, housing tax-exempt funds to cover excess medical costs.

c) The current prohibitions on exclusion for prior conditions or excessive cost profiles would remain in force. But insurers would be allowed a 5 to 1 cost ratio spread based on age.

d). Medicaid would be funded by a federal grant at “X” dollars per person, and states would have substantial leeway on how to prioritize spending as well as the ability to require “able bodied adult recipients to work”.

3. But in the likely outcome of divided government, with its history of stalemate, where might there be compromise?

a) Maintenance of 3 to 1 risk and increased federal funding to “stabilize exchanges” might be offered in return for increased state “innovation waivers” in the running of their Medicaid programs, expanded federal funding, and co-mingling of Medicaid and ACA insurance exchange programs and funding.

Should the current trajectory continue, and the Republicans loose large, the party will not only have to consider how best to acknowledge the demographic realities they outlined in 2012, but also face a likely irreversible schism of their party into two opposing segments.

How exactly they would choose to address or avoid that challenge is unclear. What is more certain is that the demographic changes that created the need for Obamacare will only grow in the future, and the need for efficiency, integration, cost-effectiveness and reliable quality outcomes will become more pressing – not less.

You can deny change – but ultimately, you can not stop it.