Trumpcare: Is It the Right Treatment for What Ails the American Health Care System?

On August 3, 2017, a panel of health law and policy experts discussed the future of healthcare and reform efforts.  This event, which was hosted by the Commonwealth Club in San Francisco, was held just a week after the Senate failed to pass its bills to repeal and replace the Affordable Care Act (“ACA”).  You can listen to an audio recording of the event here.

 

The panel consisted of Andrew Bindman, Former Director of the U.S. Agency for Healthcare Research and Quality; Professor Jaime King, Executive Editor of the Source on Healthcare Price and Competition at UC Hastings College of the Law; and Adams Dudley, Director of the Center for Healthcare Value at UC San Francisco.

 

Claire Brindis, Director of the Philip R. Lee Institute for Health Policy Studies at UC San Francisco, acted as the moderator for the panel, and began the event by expressing the importance of discussing healthcare reform with a variety of communities.  She explained that Congress had the opportunity to repeal the ACA and has acted several times to try to weaken or replace the law over the last seven years.  “Why is the ACA such a lightning rod?” Dr. Brindis asked, “And what is the difference in how Republicans and Democrats view federal health care policy?”

 

Andrew Bindman explained that what healthcare reform boiled down to was the difference between politics and policy.  The ACA, he said, was modeled after Massachusetts’ state healthcare system, which has since been referred to as “Romneycare” after Mitt Romney who was the Republican governor of Massachusetts at the time.  The program offered a moderate solution to healthcare and reflected the Democrats’ desire to expand coverage to more people.  However, it did not align with the current Republican Party’s ideas about healthcare.  They viewed the ACA as an expansion of entitlement programs and funding for those programs.  Dr. Bindman explained that fiscal concerns were the biggest priority for many Republicans.

 

These differences in priorities make it difficult to answer whether the ACA has been successful.  When asked whether the ACA had failed, Adams Dudley replied that it depended on what was important.  He explained that if increasing health care expenditures indicates a failure, then the ACA was a failure.  However, if coverage was the goal of the ACA, then no, it has not been a failure; 95% of American children have insurance, and millions have coverage now that previously could not get onto plans.

 

However, Dr. Dudley also pointed out the ACA has had several shortcomings.  For example, President Obama promised that individuals could keep the insurance they were on before the passage of the ACA.  This did not turn out to be true, as many of the cheapest plans during the pre-ACA era did not qualify as proper health insurance under the new law.  Furthermore, when the individual mandate was first implemented, the penalty was not big enough, and fewer people signed up for coverage than expected.  As a result, insurers had to increase premiums more than was originally promised.

 

Yet, as Dr. Dudley pointed out, many of the ACA’s failures result from current politics.  Insurers are unable to set premiums appropriately because of the administration’s threats not to pay cost-sharing reduction subsidies, as promised by the law.

 

It is from these politics and the differences in how the two parties’ view healthcare that Trumpcare arose.  What exactly is Trumpcare?  Professor Jaime King explained that Trumpcare is no one set plan; the Republican Party has struggled to translate its viewpoint into policy because different Republicans have different priorities.  For example, House Majority Leader Paul Ryan wanted to gut Medicaid, while Senator Ted Cruz wanted to allow insurers to sell policies with fewer regulatory controls.  Many Republicans focused on eliminating the individual mandate, while some wanted to replace it with some other mechanism to encourage enrollment.

 

Professor King explained that many of the things Republicans wanted were isolated policies that did not work in the context of the U.S. health insurance market.  While eliminating the individual mandate sounds like a good idea in theory, without other mechanisms in place, it would have begun what insurers call the “death spiral.”  Healthy individuals would flee the marketplaces, causing skyrocketing premiums and great disturbances in the individual market.

 

The Republicans also recently attempted to reform the Medicaid program.  Although the Exchanges get most of the headlines, the biggest potential changes in coverage related to the ACA actually would occur through reductions in the Medicaid program.  Professor King explained that Medicaid plays a huge role in our health care system; 40% of births are paid for via this program, and the program touches many in the early and late parts of individuals’ lives.  The ACA expanded Medicaid eligibility to millions of people for the first time.

 

If Republican attempts to reduce Medicaid spending succeed, Professor King predicted that states would face numerous challenges.  For example, if the federal matching rate declines below what the ACA promises, the Medicaid Expansion immediately ends in eight states.  Cutting federal Medicaid spending would also leave states, like California, that have codified large portions of the ACA into their state statutes, in turmoil.

 

Dr. Bindman suggested that the Republicans could not achieve consensus on Trumpcare because of the large impact of the Medicaid Program.  Medicaid offers the single largest transfer of federal funds to states.  Medicaid cuts would have significantly harmed the citizens and budgets of states that had taken up the expansion, causing numerous Republican governors to oppose the cuts. The public also protested losing their insurance, sparking state opposition.

 

As states begin to consider alternatives to the ACA, discussion has repeatedly returned to single payer systems.  Dr. Bindman suggested that the U.S. would see more of this as politics have become more extreme; until this point, Democrats have held a more moderate stance in protecting the ACA, but more of them are moving to the far left.

 

Some states have also begun moving for single payer.  Professor King explained that California, New York, and Nevada have all attempted to implement a single payer system since Trump took office, and all three plans have run into dead ends somewhere along the way.  As for whether this is a viable option, Professor King said that each taxpayer is “paying for healthcare for the underinsured and uninsured in the most humanly inefficient way possible” and it may be time to look towards single payer to streamline the process and reduce costs.

 

Dr. Dudley, however, was not sure if single payer is the best method.  He pointed towards the Veterans Health Administration (“VA”); in the 1990s, the agency had some of the worst quality healthcare in the country.  The VA was later remodeled and quality ratings went up immensely.  However, both versions of the VA were single payer, suggesting that single payer is not inherently good.  However, Dr. Dudley agreed with the other panelists and said that single payer is more likely to be implemented now that Republicans are dangling the option of taking insurance away from millions of people.

 

On a final note, the panelists suggested the government could do several things to improve the healthcare system.  First and foremost, it could attempt to lower the costs of healthcare by taking steps to reduce drug prices or better regulation of consolidation and competition.  In the meantime, we all must remain informed on these issues and begin reaching out to have the tough conversations needed to find solutions we can all live with.

 

This event was supported in part by the California Health Care Foundation.