Jonathan Cohn today published an adapted excerpt from his book about the Affordable Care Act, The Ten Year War, coming out on Tuesday. The article's centerpiece is Obama's own assessment of what went right and wrong in the design, passage, and enactment of the ACA. Of the ACA's basic design, which had become a consensus Democratic by the time Obama was elected, Cohn notes, "It was a far cry from the government-run insurance plan that Harry Truman once championed, but Democratic leaders embraced it as the best they could get..."
― and so did Obama, who repeated in our interview his belief that something like a government-run, “single-payer” system would probably work best, but creating one right away would be too difficult.
“We have a legacy system that is one-sixth of the economy,” Obama said. “The idea that you could, in some way, dismantle that entire system ― or even transition it entirely ― to a single payer system looked politically impractical and probably really disruptive. ... The best chance to actually get people healthier was going to be to design a system that acknowledged 85% of the American people have health insurance and that plugged the gap for those 15% who don’t.”
Obama's neat foreclosure of other possibilities here reminds me of the technique deployed throughout his memoir, A Promised Land, of showcasing his undeniable rationality within a framework bound by self-imposed limits, or limits imposed by his choice of advisers, or -- sometimes -- by what was politically possible. I see two fallacies here.
First, Obama sets up a false binary: single-payer or a pair of patches (expanded Medicaid and a subsidized individual market) to insure the uninsured. But there is a lot of room in the middle, and progressives, including some elected officials, had sketched out a much more sweeping type of reform before the party converged in the 2007-2008 campaign on the model that became the ACA marketplace (with Medicaid expansion, the more successful program, tacked on as an afterthought).
The earlier model, embodied in Rep. Peter Stark's 2006 AmeriCare bill, has resurfaced since 2018 and is reflected in candidate Biden's healthcare reform plan, as well as in the Medicare for America bill introduced in the House in 2018 and 2019 by Reps Rosa DeLauro (CT-03) and Jan Schakowsky (IL-09): A "Medicare-like" public option, as Biden's plan dubs it, that anyone can opt into on a subsidized basis, including those who have access to employer-sponsored insurance.
Such a public option would pay roughly Medicare rates to providers and be accepted by all providers who accept Medicare; employer-sponsored insurance would sink or swim in competition with it. Such a program might indeed induce the U.S. to "transition into" single payer, as Obama puts it -- or might lead to a new equilibrium between public and employer-sponsored insurance, the latter transformed by competition with the public plan.
Cohn's book makes amply clear that Democrats shied away from this model because Bill Clinton's proposal to bring universal coverage to the U.S. foundered in large part on his plan's perceived threat to the employer-sponsored insurance (ESI). Democrats were beaten to a political pulp for proposing to end ESI as we know it. When Mitt Romney's ACA prototype, signed into law in 2006, succeeded in reducing the uninsured rate in Massachusetts to about 3%, Democrats embraced the idea of creating or expanding programs only for the uninsured -- those lacking access to affordable employer-sponsored insurance or existing public programs. Within this consensus framework, the public option that progressive activists focused on during and after the 2008 presidential campaign (weakened by degrees in the ACA's tortuous route to passage before it disappeared altogether) would be available on a subsidized basis only to those who lacked access to other insurance.
The second questionable premise at least implied by Obama above -- which he too perhaps would no longer subscribe to -- is that the insurance obtained by most Americans is sufficient, so reform could focus primarily on the uninsured. Most nonelderly adults were and still are insured by employer-sponsored plans. That insurance was deteriorating when the ACA was implemented and continues to deteriorate today, eroded by costs rising relentlessly in excess of inflation.
The ACA did change ESI at the margins, imposing annual caps on enrollees' out-of-pocket costs and banning annual and lifetime caps on coverage. But the ACA provided no mechanism for curbing the rates commercial plans pay to providers, and medical inflation continues to inhibit wage growth as well as imposing relentlessly rising out-of-pocket costs and premiums on insured employees. The ACA also left untouched the travesty of out-of-network "surprise" billing -- finally slated for extinction in 2022 (except in ambulance services) by the budget omnibus/Covid relief legislation passed in the last days of 2020.
It's probably true that if Obama had in fact advocated for more sweeping reform -- say, a "Medicare for all who want it" model, like the Medicare for America bill -- he would not have been able to push it through Congress, and perhaps would not have been nominated, let alone elected. His thinking was more or less in the center of Democratic party thinking, and his options were constrained by the most conservative Democrat in Congress, as Cohn also shows very clearly. Perhaps here I'm unraveling my own premise -- as Obama says above that focusing on the uninsured 15% of the population was "the best chance to get people healthier" -- i.e., the legislative effort most likely to pass.
In his discussion with Cohn, Obama does acknowledge limitations to his perspective in 2008/2009, chiefly his failure to anticipate the depth of Republican bad-faith opposition. He acknowledges, too -- and always has -- that the reforms embodied in the ACA are by no means sufficient -- he always regarded the legislation as a 'starter home.' All this is to Obama's credit -- as is his persistence in pushing the ACA through in response to enormous pressure, at various crunch points, to pull back to more limited reform. Still, further acknowledgment as to the ACA's conceptual flaws would be welcome.
According to Sarah Kliff, the average deductible in employer plans in 2008 was just $303.
ReplyDeleteOn that basis I would have defended Obama's assumption that the employer market did not need serious reform.