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Memo for the Next President - Building on the Affordable Care Act’s Successes

Nancy-Ann DeParle is a Founding Partner of Consonance Capital Partners, a private equity fund focused exclusively on the U.S. health care industry. She previously served as Assistant to the President and Deputy Chief of Staff for Policy to President Obama from 2011–2013, and Counselor to the President and Director of the White House Office of Health Reform from 2009–2011. This article is based on a lecture presented to the Dartmouth-Hitchcock Health Policy Grand Rounds on September 17th, 2015.

 

WHEN Barack Obama was inaugurated as the 44th President of the United States in January 2009, 51 million Americans were without health insurance. That number was projected to grow every year, as costs continued to spiral up. Millions more lacked access to quality care. Premiums for those who were lucky enough to get covered at work had more than doubled over the past decade. High costs were crushing business and government budgets. And even though we spent almost double what every other industrialized country spends on health care, America scored among the lowest in terms of outcomes.

President Obama was convinced that doing nothing was both unsustainable and unacceptable. So despite the tremendous political risks, he took on a challenge that had gone unresolved for more than a century—going back as far as President Theodore Roosevelt’s Administration. And President Obama’s determination to press on, even when many advisers told him it was a lost cause, is the main reason the Patient Protection & Affordable Care Act (Affordable Care Act) became the law of the land.

When the President called me to come to the Oval Office on March 21st, 2010—the morning of the pivotal vote in the U.S. House of Representatives on the Affordable Care Act—I glanced at the list I had made more than a year ago of “Top 10 Health Care Problems” facing America. I had taped it above my computer upon first becoming the Administration’s so-called “Health Czar” in March of 2009, so it would be the first thing I would see every morning. I was convinced then, and remain so today, that the Affordable Care Act went a long way to address many items on that list.

Our task that morning was to call members of Congress to “firm up” the votes in anticipation of the bill’s passage. We were not quite finished with the calls, but the President was feeling confident enough to begin focusing on what happens next. I recall that we talked about a young woman named Laura Klitzka he had met in Wisconsin who had breast cancer and had hit the limits on her coverage, and his hopes that the law would help her and her family—and millions more.

I was somewhat surprised that the President sounded sobered, not celebratory, as we discussed the passage of this historic law. But as usual, he was ahead of the rest of us in seeing how ugly the opposition to it would become. Soon, the law’s opponents were all over the media warning of job loss, premium rate shock, doctor shortages, and huge deficits. And when the HealthCare.gov website launched in less than stellar fashion more than three years later, the President took the blame for not acting as “coder in chief.” So even though he could not possibly have known then the endless assaults that the law would have to endure, I now see what he meant.

That conversation gave new meaning to the phrase, “it’s lonely at the top.” The President would be the first to admit that the Affordable Care Act is far from perfect. But now, more than five years since it was enacted, the evidence is clear: the law has laid the foundation for a stronger, more efficient, and more compassionate American health care system.

With millions more now insured, the next President has an opportunity to focus on being truly creative about ensuring that Americans get the best quality, the most efficient, and the most compassionate care. And he or she can lead our country to a sharper focus on health, not just health care. But first, the new President will need an answer to a fundamental question: is the Affordable Care Act working?

Is the Law Working?
The law had three main objectives: it sought to (1) expand access to health care; (2) control the spiraling cost of health care spending; and (3) improve the quality of services delivered—our “return on investment.”

Expanding Coverage. Has the Affordable Care Act worked to expand coverage? The answer is yes. Whether your source of truth is Gallup, the Urban Institute, or the Congressional Budget Office, everyone who has analyzed the numbers has concluded that there has been a dramatic reduction in the number of uninsured. It has fallen by 16 million people since 2013—fully a third—and it continues to drop.

Almost 25 million people have either been covered through Federal or State marketplace plans, or added to Medicaid (about 18 million who were previously uninsured)—all as a direct result of the provisions contained in the Affordable Care Act. The coverage gains since the law was made operational are the most rapid since the decade following the creation of Medicare and Medicaid.

Furthermore, people like the insurance they’re getting. Both consumer research firm J.D. Power and the Commonwealth Fund found that people who buy a plan on the marketplace are satisfied (the latter reported a satisfaction percentage of 78 percent)—even more satisfied than consumers with employer-sponsored coverage.

The law also reformed insurance markets to eliminate some of the worst and most unfair practices, such as underwriting based on sickness and gender. Now, no one can be denied coverage, even if they have a preexisting condition. No one can be charged higher premiums because of health status or gender, and age rating is limited. Annual and lifetime limits that in the past have left sick people bankrupt have been eliminated.

And benefits for every¬one in the individual market have improved. For example, some 137 million Americans now have access to preventive services—such as vaccinations and blood pressure screenings—with no out-of-pocket cost.

Reducing Cost Growth. Has health reform brought down health care cost growth? Again, the answer is yes. The success stories here are underpublicized, but they are undeniable.

Price inflation for health care has held at 1.5 percent since 2010—the slowest rate of increase in nearly 50 years. Premium increases for large employers have fallen from 3.1 percent to 1.7 percent.

Admittedly, the Great Recession and relatively slow recovery played a role in the slower health care spending growth, but hardly a decisive one. The slower growth has persisted even with the economy in its sixth year of recovery. And in Medicare, where the recession should not be a significant factor in consumer behavior, spending per beneficiary actually fell in inflation-adjusted terms. Even with more enrollees, total Medicare spending in 2014 was $124 billion—almost 20 percent—lower than the Congressional Budget Office predicted. This has added years to the life of the Medicare trust fund while reducing the long-term deficit by hundreds of billions of dollars.

Improving Quality. The third and final question to ask is, has the Affordable Care Act helped improve the quality and value of health care? And once again, I believe the answer is yes.
 

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