The Kaiser Family Foundation monthly tracking poll for March 2013 reported that 48% of the American people knew virtually nothing about insurance expansions under the Affordable Care Act, more commonly known as ObamaCare. Among persons who would become eligible for Medicaid under the law, the blank stare jumped to 78%.
Dependably, as they have for almost three years, those with a negative view of the law outnumbered those who approved by approximately three percentage points, 40% unfavorable to 37% favorable. This margin has remained stubbornly consistent, but the absolute numbers have fluctuated. Right before Election Day 2012, the numbers stood at 45 unfavorable to 42 favorable.
Perhaps of importance, Democratic support for the law is more volatile than the support of Republicans or self-described Independents. Between the election and March of this year, favorability towards the ACA among Democrats dropped from 72% down to 58%, reflecting both a pre-election surge in support of the President, but also some baseline ambivalence as the immediate Republican/Romney/Ryan threat receded.
As we’ve written earlier in this series, the general concepts of the ACA, while rooted in 1990s Republican alternatives to Clinton administration proposals and adopted under Romney’s Massachusetts leadership in 2005, don’t pass muster with the post-Bush-43 Republican base. Since early 2010, Republican support for the law has hovered between 9% and 15%.
Moving beneath the whole of the law into individual provisions, more than three-quarters of respondents, including majorities among Republicans, favor insurance tax-credits for small business, provisions to close the Medicare prescription-drug “donut hole,” and allowing adult children up to age 26 to remain on family insurance policies. The most identified part of the law — the individual “mandate” — is also the feature with the least support in the general population at only 40%. It also has the greatest opposition, including three-quarters of Republicans.
To fully appreciate the blur of public opinion, consider that while experts in the field of health-care policy have noted that the growth in health-care costs have slowed, at record rates, for three years in a row, 58% of the population believes that costs are growing faster than usual. Only 4% accurately noted the slowdown.
The larger lesson may be that people draw their insights about the nation’s $2.7 trillion health care economy through the lens of their own individual, out-of-pocket spending and that an average family will be far more likely to notice any increase in expenses, rather than a decrease in the rate of that increase over a period of many years.
Finally, as the early 2013 respite from the intensity of the health-care debate draws to a close, 53% of the people would halt or change the ACA, but 58% of respondents oppose cutting off funding, the most likely avenue open to Congressional opponents.
When we last reported (La Cuadra Vol. VII, Issue 1, January / February 2013), Vice-President Biden and Senate Minority Leader Mitch McConnell, (R-KY) had brokered a compromise tax agreement to allow the Congress to step back from its end-of-the-year fiscal cliff. House Speaker John Boehner, weakened nearly to the role of spectator when his own caucus rejected his Plan-B proposition, allowed members to vote on the McConnell / Biden compromise. A minority of Republicans and nearly all Democrats voted yes and the bill passed on to the White House for the President’s signature.
In early 2013, calmer voices initially prevailed, and completed the 2012-13 budget process with continuing resolutions invoking modest reductions in spending. Then, in March, the we’ll- never-do-it, across-the-board provisions of a multi-year $1.1 trillion automatic sequester battle breathed new life into the Speaker of the House.
High-stakes brinkmanship was again the order of the day. Dire warnings were issued by both sides, and then, finally, surprising most Democrats, the conservatives in the Republican Party decided that any cut is a good cut, and the deal that was arranged to be so horrible that it would never come to be, came to be. At least for the initial year.
Democrats protested and spoke the lines of distress. Then, once the sequester created delays at hub airports as air traffic controllers were furloughed, they buckled. In essence they showed that they were there to help those in the air but weren’t ready to offer anything to those who live at the lower end of the resource scale.
Congress had fully earned its ten percent approval rating.
While the sequester provisions strike broadly into military acquisition budgets, into domestic spending on research, education, and myriad programs for the poor, for the first time in several years the ACA was not a focal point of the fiscal debate. The sequester contained a real (but modest) across the board 2% reduction in Medicare payments to doctors, hospitals, and other health providers, but held harmless the Medicaid program. Oddly, health care would likely have been cut more deeply in any alternative agreement to the sequester itself. For the ACA, affirmed in 2012 as the law of the land, the sequester debate was a welcome step back from the risk of catastrophic funding loss.
As the ACA receded from the debate, myriad other issues — action or inaction around guns, immigration reform, the Middle East, the economy, nuclear threats, and domestic terrorism — pushed to the fore. We were reminded again of the incredible complexity of the age.
But this respite from being front and center in the debate will not last much longer. Against the backdrop of a skeptical and poorly informed public, health-care spending and the overall financing of the United States government will reemerge, and crescendo, as spring folds into summer.
To reset the scene: the ACA, as passed, would have enabled some thirty-two million people, of our roughly fifty-five million uninsured, to obtain coverage. Half of that number would have been brought in through a nationwide expansion of Medicaid eligibility. Medicaid is the governmental program which provides health-care coverage to the nation’s poor. It is a jointly funded program, with resources coming from state and national coffers. It is administered by the individual states, within broad parameters established by the federal government. The ACA intended to make those broad parameters much more explicit, and for many states, more rigorous. States would now be required to provide coverage for all applicants with annual incomes of 133% of the national poverty index or below. Then in June, the Supreme Court, while upholding the law in broad strokes, removed the federal enforcement mechanism requiring adherence to the 133% income eligibility standard.
The law had foreseen the federal government requiring reluctant states to participate by threatening to withhold all federal financial support from their Medicaid programs. That, the Roberts Court felt, was a bridge too far. Participation by the states would need to be voluntary. The Court’s Medicaid change reduced initial estimates of new Medicaid enrollment by about five million people.
As of mid-April, the Governors of twenty-seven states had announced support to move forward with the ACA-enabled Medicaid expansion. Initial assumptions were that “blue” Democratic leaning states would support the law, with “red” Republican states opposed. ACA supporters presumed that federal financial incentives would tip the balance in their favor. It still might. Under the ACA the federal government picks up 100% of the states’ expansion costs initially. That support decreases to 90% over ten years.
Opponents assumed that the government-run Medicaid program, and concern with public spending of any sort, would rally Tea Party opposition within Republican ranks, holding the line long enough to allow a call for repeal to rise from the ashes of its 2012 failure.
While the blue-red distinction has been fairly predictive, Republican governors in Arizona, Ohio, Arkansas and Florida — several having been harsh critics of the ACA —have advanced Medicaid expansion proposals in their states, some seeking flexibility in the terms under which federal authorities could approve state plans. By contrast, deep-red Governors — in Louisiana and Texas for example — have retrenched into staunchly conservative opposition.
The beginning of 2014 will likely see roughly half of the states with expanded Medicaid programs, but with continuing political debates from the left and / or the right in a number of opposing states.
There have been unexpected twists and turns in implementing the Medicaid side of the ACA, but the real surprises have arisen elsewhere. As discussed, projections were that roughly half of the new heath-insurance covers would come under Medicaid expansion; the other half was expected to come from the development and deployment of health-insurance exchanges. These exchanges, newly christened as “health-insurance marketplaces” — no doubt due to the power of market research and focus grouping — are entities where individuals without insurance, and above the Medicaid cut off point, will be expected to purchase coverage with the assistance of a government subsidy, if their income should allow.
As the ACA made its way through Congress, there was disagreement about how to structure these marketplaces. Democratic majorities in both houses of Congress advanced the exchange concept as a structure for blending market-oriented ideas with subsidies necessary to make coverage affordable. These ideas had, again, largely been taken from the Republican play book of the Bush or pre-Bush era. But the party has shifted dramatically to the right in recent years and they now oppose virtually any initiative by government.
The debate, largely between House and Senate Democrats, differed on the structure of the exchanges. House members tended to favor a single, national marketplace. Senators were more drawn to state-based marketplaces. As reported in earlier commentaries, the Senate won that skirmish, with a carve-out for a small federally-managed enterprise to insure complete coverage if states balked.
While some Republican Governors would surely resist any Medicaid expansion, their options on health-insurance marketplaces looked limited once the Supreme Court upheld the Constitutionality of the individual mandate. The thinking was that they might not like being told to operate a state exchange, but they would prefer that to defaulting their authority to a federally-managed exchange. That the early 2013 result would differ so markedly from these assumptions reflects the degree to which conservative politics have been transformed by Tea Party fundamentalism.
As of mid-April, seventeen states are constructing state-operated exchanges and seven more have chosen partnership arrangements with Washington. Yet, there are twenty-six states (made up primarily of the deeply red belt across the south and in the Great Plains) that have defaulted to the federal structure.
Utah has chosen a hybrid exchange with the state responsible for businesses, while individuals fall under the federal structure.
Building and opening the exchanges is a major challenge. Not only must the states (or the federal government) gather critical identifying information about potential enrollees, they must screen whether the applicant is eligible for the more-comprehensive and less-costly Medicaid benefit. They must also verify income data to process premium subsidies, and perform a homeland-security check designed to disqualify non-legal immigrants. For ultimate success, these interactions will require an almost immediate processing time.
The exchanges have a second task. They have to present to the applicant the range of insurance choices available in their community. While the ACA required a minimum set of benefits in any policy, each applicant will be offered at least four variants of any available policy, with differing levels of cost sharing. Higher premiums may mean lower out-of-pocket costs and easier access to services. Lower premiums may mean higher co-pays and more frustrations. The numbers and the choices can be daunting.
The exchanges face the applicant, but they also face the insurance industry. A third responsibility is plan management. Does the policy meet the standards in the law, both in providing required benefits but also with demonstrated access to doctors and hospitals? The exchanges must assure that complaints are handled in an adequate way and, perhaps in connection with existing law, approve premium levels set by the insurers.
Finally, were these responsibilities not challenging enough, the ACA envisions that the exchanges will be able to explain their processes and motivate enrollment among segments of the population which, as the polling data show, are simply not aware of any of this.
This is a challenge for the state and partnership exchanges, but it is also an enormous, and largely unexpected, challenge for the federal government. Health and Human Services Secretary Kathleen Sibelius says her agency will be ready come October. While the operational hurdles are enormous, the nation already covers several million civilian employees through the Federal Employees Health Benefits Program. The concepts of the exchange are not virgin territory.
However, a huge federal exchange was not anticipated in the law. Until election day, 2012, regulations were delayed — presumably part of the administration’s strategy to minimize focus on the ACA during the campaign. None of the ACA’s fiscal provisions anticipated the costs of the federal exchange, and the Congress was quick to dismiss the administration’s request for almost $1 billion in operational support early in the new year.
The roll-out of the exchanges, with emphasis on the federal structure, now emerges as the political fuse of the ACA’s return to 2014 partisan politics. The “it’s Obama’s fault” caucus in the Congress, virtually the entire Republican Party, tastes the potential for a reprise of the 2010 anti-ObamaCare polarization as the core of its mid-term election strategy. Democrats may be ducking for cover, as evidenced by recent statements from Senate Finance Committee chairman Max Baucus (D-MT) that he feared a train wreck on the way — a comment made even more gratuitous by his announcement to not seek reelection.
The White House strategy is emerging. Understanding that the law cannot be repealed on this President’s watch, the President will accentuate the specific non-controversial advances in the law; he will turn his continuing grass-roots organizing team towards outreach efforts to gain enrollment, and will counter-punch the most extreme efforts of the opposition. Obama’s bet is that Americans will support insurance coverage, even if the roll-out is rocky.
As the ACA emerges from its early 2013 respite from national attention, Republicans are seeking their strategy. Within the Congress, and among Republican Governors and legislators, the taste of blood in all-out opposition is tempered by the reality that Mitt Romney was a Massachusetts insurance winner, but a loser on the national stage. It’s still about Obama but it may be a more defining issue of the Republican Party’s future.