Note: On Monday, May 20, Elaine Kamarck,
director of the Management and Leadership Initiative at Brookings
, will moderate a public forum on “
Implementing the Affordable Care Act: Organizational and Political Challenges.
It’s been a long time since the federal government had to implement a large, new, federal program. Ten years ago we saw the implementation of Medicare Part D and the creation of a new cabinet department, the Department of Homeland Security. In each instance there were predictions of disaster and substantial growing pains. In the case of Medicare Part D implementation exceeded expectations and costs have not been nearly as high as feared. In the case of DHS, implementation was bumpier, nonetheless, ten years later both operate more or less smoothly and, in retrospect, the crisis now seems overblown.
This year, the Obama administration needs to finalize implementation of the Affordable Care Act—a historic piece of legislation and the most significant domestic policy achievement of the Obama administration to date. And the question of how it goes is front and center. Even the president has admitted that there will be “hiccups” along the way. Compared to earlier pieces of health care legislation, the ACA is incredibly complex, involving activity by fifty states, the jurisdiction of fifty state insurance regulators and changes in the entire health care industry. Added to the inherent complexity of the bill is the fact that it had no Republican support and is still adamantly opposed by the Republican party and by half of all those polled.
So the question is: how bad will it be? Imagine a continuum that goes from “hiccup” on one end to repeal on the other end. With plenty of points in the middle. What would that look like?
The hiccup scenario is the most optimistic. Hiccups are more or less normal. If the implementation is successful, the exchanges will be up and running. There will be glitches. Some people who qualify won’t get their subsidies; some who don’t will. The number of companies on the exchanges won’t be as big as hoped for but will grow. Premiums for health care will rise only modestly and the enhanced services in the new health care plans will make most people okay with the price increase.
The delay scenario is not really good nor is it fatal. A less successful outcome is one where the feds and states find they have to pull back from key provisions in the bill at least for a while. There may be delays in opening exchanges which would necessitate delays in enforcing the mandate that everyone buy insurance. The federal hub may not be able to interface with statewide data and eligibility could become a lengthy bureaucratic process. HHS might adopt a generous waiver policy while states work out their systems. Premiums may rise, leading to complaints from the public but no substantial drops in insurance buying.
The repeal scenario is fatal. Obviously Republicans, especially in the House, are rooting for this one. In fact they seem to like taking the repeal vote so much that they’ve done it 37 times in the past three years. So the question is: what would it take to move support for repeal beyond the Republican base? In 1989 Congress repealed the Medicare Catastrophic Coverage Act a short sixteen months after it was passed. Why? It increased costs to seniors and offered them things that they didn’t want. In the context of ACA the repeal scenario is feasible if premium prices rise so high that people who don’t qualify for subsidies (there are more of them than those who do) decide that they really don’t want the enhanced packages envisioned in the law and then get really mad and let their representatives know it.
Where will we end up? Stay tuned.
Sentiment inside the Beltway has turned sharply against China. There are many issues where the two parties sound more or less the same. Trump and others in the administration seem heavily invested in a ‘get very tough with China’ stance. It’s possible that some Democrats might argue that a decoupling strategy borders on lunacy. But if Trump believes this will play well with his core constituencies as his reelection campaign moves into high gear, he will probably decide to stick with it, if the costs and the collateral damage seem manageable. But that’s a very big if, especially if the downsides of a protracted trade war for both American consumers and for American firms become increasingly apparent.