When President Obama signed the Patient Protection and Affordable Care Act (ACA) into law on March 23, 2010, the United States finally joined the rest of the developed world in making access to affordable healthcare a government obligation. Although the ACA is under GOP fire in Congress and on the campaign trail and will need to be strengthened to reach the goal of affordable health coverage for all Americans, it could do more to restore faith in government than any other social program since the passage of Medicare in 1965.
The huge contradictions in the American healthcare system—the pressures on business, families and government from the highest costs in the world, tens of millions uninsured, millions more going medically bankrupt and growing questions about quality—led Obama to make healthcare a core issue in his campaign for election. The pressure of these systemic issues also convinced the health industry that reform was inevitable and that would be better to be part of the solution. A core part of the resulting bargain with industry was preserving the current health insurance system: private health insurance offered at work or purchased by individuals; Medicaid and Medicare. Tradeoffs made in passing the law provide hospitals, health insurers and drug companies with new customers in return for modest cuts in their reimbursements. Although insurance companies reversed course midway though the legislative process—deciding that the new consumer regulations they would have to endure were not worth the new customers—they were too late and isolated to kill the bill, in no small part because of the well-organized grassroots campaign backing the legislation.
Ideological opposition to government action was as vehement as ever, even though the most controversial part of the new law, the mandate for most people to purchase private insurance, is straight out of the conservative playbook. While it would be easy to dismiss conservative opposition to ObamaCare as being purely political—and certainly hyper-partisanship plays no small part—one of the core concerns of the opposition is an appreciation that the ACA has the potential to join Medicare and Social Security as one of the pillars of government-guaranteed social insurance. Rick Santorum makes no bones about why the right is so intent on killing the promise of good healthcare for all, telling listeners on the campaign trail: “ObamaCare is a game-changer that makes every single citizen dependent on the US government for their life.”
The ACA takes major steps towards reversing the failures of our market-driven system. The central feature of the new law addresses fears that losing a job, retiring early or starting a small business could result in being denied access to affordable health coverage. It does this by providing tens of millions of Americans with income-based subsidies to purchase coverage from regulated private insurance companies and by dramatically expanding public health coverage for the working poor in Medicaid. The legislation also requires employers to contribute to coverage and sets higher minimum standards for employer coverage.
The new law begins to tackle the problem of high healthcare costs by making changes in how Medicare reimburses providers. In Massachusetts, RomneyCare—structurally almost identical to ObamaCare—is beginning to demonstrate that the overall architecture of reform can play a catalytic role in controlling healthcare costs. Massachusetts is using the power to restrict the entry of insurance companies into the new health market—called “exchanges” in the federal law—to negotiate with these insurance companies for high quality coverage at lower prices. The pressure to control expenditures created by the state’s new responsibility to help pay for the uninsured led Governor Deval Patrick to squeeze the insurance companies. They, in turn, are leaning hard on the big academic medical centers, which are the major drivers of costly and often wasteful care. With 95 percent of Massachusetts residents now insured and likely to have a primary care provider, emergency room use is starting to decline.