“If You Like It, You Can Keep It”

In 2010, the Committee for Economic Development announced in a public statement that we believed that the right vote on the Patient Protection and Affordable Care Act was “no.”  We acknowledged that the creation of the health-insurance exchanges was a step toward employing market forces in health care, but we believed that it was being done in a far-from-optimal way.

While noting our opposition to the ACA, one must have a certain sympathy with the law’s defenders today with respect to one particular sore spot in the implementation of the law.

During the 2009-2010 debate, the law’s strongest advocates made two emphatic statements:

The current health-insurance system is horrendous.  It inhumanely denies coverage to millions of hardworking Americans.  And it is inefficient and unaffordable for households, employers and the federal government alike.  It wastes money in bad care, under-care, and even over-care that causes more pain and cost than it does healing.  It is more costly than care in any other developed country, and yet it yields inferior outcomes by every major indicator of health.  Our healthcare system is a disaster.




If you like it, you can keep it.

Clearly, the first manufactured “quote” is a caricature of the debate, but many on both sides of the key 2010 votes said nearly that.  And equally clearly, the second “quote” was not precisely paired with the first.  But the juxtaposition of the two does not do violence to the reality.  And so today, when numerous Americans find that the insurance plans with which they have been satisfied will be discontinued with the implementation of the ACA, there is considerable angst.  Some, perhaps much, of it is justified.  But there is an important lesson in this angst, and we should absorb it.

Some existing insurance plans should go away, and are doing so because of reforms in the ACA that have majority bipartisan support.  We know from experience, for example, that there was until recently a sub-industry of health insurance that combed the original application forms – sometimes years or even decades old – of now seriously ill customers to find discrepancies that could be used to deny coverage.  Sometimes they used grounds of pre-existing conditions, but sometimes they sought circumstances totally irrelevant to the ailment in question.  Such “rescissions,” as well as discrimination at the time of application on the basis of pre-existing conditions, are now banned by law.  Insurance policies created using business plans that relied on after-the-fact rescission to generate their profit are not viable in the new, and arguably better, marketplace.

But put such obvious issues aside.  Consider instead only the basic question of the efficiency of delivery of health care.  On a totally bipartisan basis, analysts pronounce as a truism that our system of delivering care must change if it is to remain affordable at acceptable levels of quality.  And assume for sake of argument that the ACA is wiped from the face of the industry, and the nation can start fresh.  What reform that fundamentally changes our mode of delivering health care can promise that every American can keep the insurance that he or she has today?

This is not an empty question, and not a mere acknowledgement that to make the soufflé, we must crack some eggs.  Millions of Americans know that they have medical conditions, and are today in a physician’s regular care.  Many of those have coverage in the old-fashioned fee-for-service system, where incentives reward providers who deliver more services – helpful or not.  Suppose that a fully justified reform creates strong incentives toward new modes of organization that integrate providers into cost-responsible systems.  How many thus-outdated insurance plans will go away?  How many providers already near the ends of their careers will contemplate the changing world and then decide to hang up their stethoscopes and retire?  So how many of their patients will find that they cannot “keep what they have,” and will blame the reform for disrupting their care and their lives?

Any new healthcare system, either the current ACA or any successor, will need to deal with such questions of transition.  The ACA included a “grandfather” clause for existing plans, but merely allowing a plan to continue legally does not mean that it will continue if reform-induced changes in the marketplace undermine its business model.  Thus, anyone who hopes to restructure the U.S. healthcare system, even if unambiguously to the entire society’s betterment, must be prepared to respond to the many individuals – often the elderly or the sick – who will not be able to “keep what they have.”

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