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SALT LAKE CITY -- The future of health care reform is best characterized by uncertainty.
At one point, health care reform was poised to be the key issue in the 2012 elections. Although issues associated with the economy appear to be taking the forefront, health care reform will likely still play a prominent role.
The outcomes of the 2012 elections will have a significant impact on the Affordable Care Act. Health care reform was passed not because Republicans and Democrats agreed on a solution, but because Democrats controlled Congress and the presidency. The balance of power in 2012 will therefore likely determine the immediate fate of the legislation.
In order to repeal the Affordable Care Act, Republicans need at least enough members to get a bill through both the House and the Senate. If they do that and secure the presidency, the legislation will almost certainly be repealed.
However, if President Barack Obama is re-elected, the Affordable Care Act will be protected to some degree by the presidential power of veto. In that case, Republicans would need more than enough votes to pass repeal legislation; They would need a veto-proof majority. And while Congress has record low approval ratings, those kind of Republican gains are unlikely.
Beyond the role of the elections, the future of health care reform is also dependent to some degree upon financial concerns.
Some of these are directly associated with the Affordable Care Act. For example, the legislation creates a long-term insurance program under The Community Living Assistance Services and Supports (CLASS) Act. While many of the details are still being worked out, the insurance program will provide long-term cash benefits in the event of a disability.
However, you have to pay into the program for a minimum of five years before you are eligible to receive any benefits. This means that for five years, the government will collect premiums without having to provide any services. The CLASS Act will be enormously profitable in the short-term. However, like health care costs in general, there is a danger that the provision will also be unsustainable in the long-run. Once individuals begin to receive benefits, the program may lose its financial viability.
This problem was recognized by Democrats, but was not resolved in the rush to pass the Affordable Care Act.
Other components of the legislation also represent significant threats. The Congressional Budget Office cautions, “(The Affordable Care Act) includes a number of policies that might be difficult to sustain over a long period of time.” Thus even if there are no political threats, the Affordable Care Act may not be able to sustain itself financially.
The nation’s affinity for debt also threatens the long-term viability of the Affordable Care Act. While lawmakers reached a last-minute deal to avoid the first default in U.S. history, the agreement could create problems for health care reform for at least two reasons.
First, Standard & Poor has downgraded the U.S. credit rating. While politicians cried foul, S&P claims it doesn’t believe the U.S. has its debt problems under control. And more downgrades are possible. If this trend were to continue, a dollar won’t stretch as far as it once did and it will be even more difficult to keep the Affordable Care Act on solid financial footing.
Second, the agreement reached by lawmakers could possibly result in cutting funding from the health care reform bill. The agreement calls for a bipartisan group to cut $1.5 trillion in spending. If an agreement can’t be reached, then $1.2 trillion in spending will automatically be cut. The automatic cuts would come primarily from defense and health care reform in order to incentivise Republicans and Democrats respectively.
In other words, failure to resolve the ongoing crisis could result in a double whammy: additional credit rating downgrades and cuts to health care reform.
On the other hand, nobody really knows what will happen once health care reform moves into high gear. While many signs indicate the future looks dim, it is by no mean a foregone conclusion that the Affordable Care Act will result in failure.
The staff of the Washington Post reports, “Even a small downward shift in the rate of health- care inflation could dramatically improve the nation’s budget outlook.” If everything aligns just right, the legislation could realize decades-long surpluses. These surpluses could then be used either to help lower the deficit or make modifications to the legislation.
It is possible that the Affordable Care Act may accomplish its objectives and increase access to low-cost, high- quality health insurance.
In the end, the future of health care reform is relatively uncertain. The one exception to the uncertainty is that whatever happens, the debate isn’t likely to go away any time soon.
The articles in this series have very briefly addressed a few of the major issues surrounding health care reform.
- Health care reform became a reality in the form of The Patient Protection and Affordable Care Act of 2010. The goals of the legislation are to make low-cost, high- quality health insurance more universally available.
- The legislation was made possible due to a combination of political opportunity and unsustainable rising health care costs.
- To a great extent, the health care reform bill is a work in progress. The legislation will be implemented in stages over several years, but many of the actual details are delegated to the Department of Health and Human Services.
- The individual mandate is crucial to the success of the Affordable Care Act. The mandate requires that all individuals purchase insurance or pay a fine, but it is currently facing several constitutional challenges.
- State insurance exchanges are designed to make it easier for the uninsured and small business employees to purchase health insurance.
- There are holes in the current legislation which likely need to be addressed in order to accomplish its objectives.
- Claims that health care reform will reduce the federal budget deficit over the next 10 years along with claims that the legislation is socialism are more mythical than factual.
- While both Democrats and Republicans want what is best for the country, they vehemently disagree at times over how to accomplish that goal. The role and extent of government involvement is at the heart of these debates.
- The future of health care reform is best characterized by uncertainty.
Kurt Manwaring is pursuing a graduate degree in public administration at the University of Utah. He is the owner of Manwaring Research & Consulting and maintains a personal blog at www.kurtsperspective.blogspot.com.
