TO: Professor Lawrence Evans FROM: Alexzandra Lizama SUBJECT: Executive Implementation of Healthcare Reform CLASS: Section 2 - 11AM DATE: December 2nd, 2015 Obama Administration Position: The Patient Protection and Affordable Care Act (ACA), the historic health reform bill passed by the Obama-Biden Administration in 2010, was created as an effort to make healthcare affordable and accessible by strengthening employer coverage, making insurance companies accountable, and ensuring patient choice of doctor and care. In broader terms, it was created to help 32 million Americans get health insurance coverage, to ban insurers from denying coverage to those with preexisting illnesses, to expand Medicaid to all poor people except illegal immigrants, to give subsidies to low and low-middle income people to buy insurance, and to create regulated state insurance markets where people without employer-sponsored insurance can buy this government subsidized coverage (CQ researcher, 2010). Thus, the main tenets of Obama’s policy are to reform, mandate and subsidize healthcare coverage. Nature of Implementation: The nature of the ACA implementation process leaves the states with a majority of the responsibility and several freedoms although there are certain regulations controlled by the federal government. The federal government has used transitional policies to roll out requirements for insurers to cover a minimum set of ‘essential health benefits’, which includes coverage of preexisting conditions, continued coverage if you become sick, free preventative healthcare, and upping the age for young adults on parents healthcare to age 26. The federal government has also been working to fill the Medicare coverage gap. However, because states remain the primary regulators of health insurance and have considerable flexibility over implementation, consumers are likely to experience some of the new protections differently or not at all. For example, Medicaid is expected to expand to for families of four up to 133% of the poverty level, but states can decide to opt out of this expansion. Additionally, though states are responsible for creating state health insurance marketplaces so that their residents can sign up for coverage, they can also opt out. Heath and Human Services has responded by setting up federal exchanges for the 26 states that opted out of creating their own during the 2014 healthcare market rollout (Brookings Institute 2014). Implementation Issues: Whenever state bureaucracies are responsible for either partially or totally implementing federal programs, the dispersal and fragmentation of authority tends to create conflicts along both vertical and horizontal planes (Patel and Rushefsky 2006). Although Health and Human Services has pushed for state cooperation, giving states an extra month to decide whether they would set up their own health insurance exchanges in 2012 and allowing the extension of high risk insurance pools for states that were behind on the implementation timeline in 2014, states lead by the GOP are still refusing to cooperate (Commonwealth Fund). Partisan polarization and the desire of the GOP to kill the ACA are at the core of the bill’s inefficiency and organizational issues at both the Administrative and state-levels. Partisan polarization is currently at an all time high, as of October 2014 Democrats held nearly all Senate seats for states that voted for Obama in 2008 and 2012 and Republicans held nearly all of the Senate states that voted against Obama both times (NBCnews.com). Thus, the GOP has refused to work with the Administration and has voted 54 times in the House to undo or change the law. The GOP has also widely criticized the Obama Administration for technicalities such as Obama’s promise that “if you like your plan it won’t change” platform in 2012, which turned out to be false in some cases due to plans that were either too weak to fulfill new requirements or too expensive for insurers to continue. This has been widely successful at destroying the bills public approval. Additionally, Congress has failed to appropriate funds for the implementation process due to partisan polarization.This has forced the Administration to prioritize resources, phase implementation provisions in a rational order and has
1
lead unintended technical limitations. Thus, the Obama Administration has been repeatedly pushed into delaying provisions in order to placate opponents and implement provisions effectively (economist.com; Washington Post). One result of the limitations that the Administration faces are the delays of the individual and employee mandates, which were postponed by Congress in 2013 for until 2015 and then again in 2014 for until 2016 due to widespread opposition and the need for the Administration to implement a practical reporting process (NEJM.org). The individual mandates will mandate that everyone buy insurance or face a $695 annual fine. The employer mandates will require any company with over 50 employees to insure their employees or face penalties of up to $2,000 per employee. However, due to the GOP taking control of Congress in the 2014 Midterm elections, it is likely that these mandates will continue to be extended and watered down. It is further predicted that small businesses will push employer mandates minimum number of employees up and drive more and more consumers from private to public health care over time. As this happens, the individual mandate stick will become less and less important for achieving enough coverage to keep the ACA viable. Another result was healthcare.gov, the online insurance marketplace, crashing during its opening days of enrollment in 2013 (American Action Forum). The Obama Administration faced widespread criticism as a result. Continued technical problems with the site lead to enrollment deadlines being extended in 2012 and twice in 2014 (politico.com). However, after the chaotic debut insurers followed by waiving enrollment deadlines and helping the White House fix the dysfunctional website. This act was the beginning of a mutually-beneficial relationship between the Obama Administration and insurers. The relationship has come about because the federal law requires most Americans to have coverage, the insurers provide it, and the government subsidies it. This has resulted in an insurance market that is growing much faster and more profitably than traditional commercial employersponsored coverage (New York Times). Finally, the lack of state cooperation, which has led to widespread dependence on federally-run marketplaces, paired with ambiguous wording used to push the bill through Congress has led to a court battle over a drafting error in the ACA. The GOP argues that the bill does not clarify whether or not the Administration has the authority to grant subsidies for federal marketplaces. The bill only specifies that subsidies will be granted to consumers who buy insurance on state-run marketplaces. Without these federal subsidies offered to families that make $22,000 or less per member, the entire marketplace system could fall apart because families in states with federally-run marketplaces wouldn’t be able to afford insurance. However, the growing relationship between insurers and the Administration has led insurers to provide support to the Obama Administration throughout these court battles (New York Times). This is increasingly putting the GOP and insurance companies, who are traditionally allies, in conflict with one another as insurers resist the GOP’s efforts to dismantle the ACA. Therefore, this relationship gives the ACA a much higher likelihood of long-term support and success.
2