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The Keckley Report

The Affordable Care Act is on Center Stage (Again): Myths, Flaws and What’s Next

By June 29, 2020March 1st, 2023No Comments

Over the weekend, the impact of the coronavirus pandemic hit a staggering milestone: 10 million have been infected worldwide and 500,000 have died. In the U.S., infections exceed 2.5 million and deaths 125,000—a fourth of the Covid-19 virus global impact though we’re only 4% of the world population.

With attention focused on these startling milestones and its potential to overwhelm hospitals in Texas, California, Florida, Oklahoma and other hotspots, last week’s news about the fate of the Affordable Care Act got little attention. It’s no less newsworthy:

On Thursday, the Trump Administration and 18 Republican attorneys general filed briefs in support of the “California vs Texas” case before the Supreme Court that overturns the Affordable Care Act. In contrast, House Democrats unveiled legislation (H.R. 1425—State Health Care Premium Reduction Act/Patient Protection and Affordable Care Enhancement Act) to expand premium subsidies, protections for coverage with pre-existing conditions and incentives for states to expand Medicaid for individuals up to 400% of the federal poverty level.

The stark difference in these actions mirrors the deep divide about the Affordable Care Act that has persisted since its passage in 2010. The Supreme Court’s initial affirmation of its constitutionality in June 28, 2012, did little to quell debate. In that decision, SCOTUS determined the law not an over-reach by the federal government but disallowed mandatory Medicaid expansion by states. This time, the issue is the law’s individual mandate requiring individuals to purchase health insurance or pay a fine. In January 2017, as part of the administration’s Tax Cut and Jobs Act, the individual mandate was cancelled. Therefore, litigants argue in the closely watched case, the entire law is null and void since the individual mandate was foundational to its funding and intent.

I was in the House of Representatives when it passed on March 21, 2010 and at the Supreme Court eight years ago when it was declared constitutional. Emotions ran high. No one knew for sure what might follow but disruption of the status quo was assured.

Then, and now, misinformation and partisan grandstanding about the 2000-page law runs rampant. In my view, the major myths about the law that have simmered since its passage are these:

Myth: The primary focus of the ACA was increased access to insurance coverage for those without.

Facts: The ACA had three aims: to increase access to insurance coverage for those uninsured, to improve quality of care by focusing on care coordination and adherence to evidence-based practices and reduce health costs by changing incentives for providers and integrating information technology to reduce waste and unnecessary duplication of services. The ACA’s 10 sections address all three aims: only Titles 1 and 2 address insurance coverage. Notably, the uninsured rate in the U.S. sank from 16.2% in 2010 to 9.4% prior to the pandemic. Though media attention has focused on insurance coverage, the ACA covers much more.

Myth: The ACA has increased health costs.

Facts: National health expenditures in the decade before the ACA passage increased between 4.0% and 9.6% per year. In the decade since its passage, annual increases have been 3.5% to 5.8% per year. And the CBO forecasts they’ll increase 5.4% annually through 2028 due to medical inflation for drugs, technologies and facilities, labor costs and increased demand from sicker and older consumers. Thus, the ACA has not reduced costs but has slowed the rate of spending slightly.

Myth: The ACA is unpopular.

Fact: When passed March 23, 2010, those favoring the ACA were 50% of the population vs. 35% opposed. When the Supreme Court upheld the law June 28, 2012, support was 38% and opposition 51%. Since 2012, support for the law has increased annually: last month reaching 53% vs. 40% who oppose it. Pollsters consider these opinions intense: those who support the ACA believe it affords coverage to those without; those opposed view it as an expensive over-reach by the federal government. And knowledge about other elements of the law is low in both groups. The law, therefore, is popular for a slight majority of Americans, but divisive for all.

So, what’s ahead for the ACA?

It’s certain to figure prominently in Campaign 2020. The ACA will figure prominently in the Presidential election only 126 days away. The Trump campaign will argue to Repeal and Replace; the Biden campaign will counter Fix and Repair.

The punching match between campaigns will feature these messages:

  • Supporters: Fix and Expand the law via protections for health insurance coverage without regard to pre-existing conditions and expansion of coverage through Medicaid expansion and subsidized marketplace plans. Punchline: healthcare is a universal right which is only accessible in the U.S. through public or private insurance coverage.

  • Opponents: Repeal and Replace the law to give employers and individuals undeterred authority to choose private insurance coverage. Punchline: Health insurance coverage is a personal choice, not an obligation. And protections for those with pre-existing will be created IF the ACA’s repealed.

It’s certain to be augmented through legislation and executive orders addressing at least five issues that are at the top of the list of ACA add-on’s:

  • Replacing Fee for Service Reimbursement with Value-based Incentives: The use of alternative payment models like bundled payments and accountable care organizations to force providers to assume financial risks for costs.

  • Increased Funding for public health: Public health represents only 2.5% of total U.S. health spending having experienced budget cuts for years. Case in point: The CDC’s budget was cut last year by $700 million.

  • Price transparency: The Executive Order requiring hospitals and their employed physicians to disclose prices for 300 shoppable services next year is being challenged in court but the court of public opinion is strongly in favor. It will not stop with hospitals.

  • Drug prices: They’re the fastest growing element in health spending and an easy target for critics.

  • Consolidation: Promised savings resulting from local hospital consolidation have not been realized. Private equity has rolled up more than 300 medical practices in the last 4 years. Insurers are employing clinicians and operating a wide range of health facilities.

The ACA did not address these explicitly but is the framework for how the system will be structured and financed in coming years.

It’s unlikely to be repealed. Its flaws are many, but its core design principles are now hardwired into to the healthcare ecosystem and widely embraced by the industry. That’s not likely to change even IF the Supreme Court throws it out completely this fall.

The Affordable Care Act is arguably the most consequential legislation in modern history. Eight years ago yesterday, the Supreme Court upheld its constitutionality. Once again, it will define its fate at the height of public attention to the health and wellbeing of our families, communities, and nation. Stay tuned.


Patient Protection and Affordable Care Act

National Health Expenditure Data

“Recession Contributes To Slowest Annual Rate Of Increase In Health Spending In Five Decades” Health Affairs January 2011

Goodnough, Abelson “Obamacare Faces Unprecedented Test as Economy Sinks” New York Times June 27, 2020;

Armour, Thomas “Democrats Campaign on Health Care as Trump Tries to End Obamacare” Wall Street Journal June 26,2020;

Rachel Cohrs “Dem ACA improvement plan hikes subsidies, incentivizes Medicaid expansion” Modern Healthcare June 22, 2020;

John Tozzi U.S. Health Care Puts $4 Trillion in All the Wrong Places” Bloomberg News June 11, 2020


43% of U.S.  Coronavirus Deaths from Nursing Homes

Per the New York Times analysis:

  • At least 54,000 residents and workers have died from the coronavirus at nursing homes and other long-term care facilities for older adults in the United States, according to a New York Times database.

  • As of June 26, the virus has infected more than 282,000 people at some 12,000 facilities.

  • 11% of the country’s cases have occurred in long-term care facilities, deaths related to Covid-19 in these facilities account for more than 43% of the country’s pandemic fatalities.

  • In 24 states, nursing home deaths are 50% of their total: New Hampshire is highest (80%) and New York lowest (21%).

“43% of U.S. Coronavirus Deaths Are Linked to Nursing Homes” New York Times June 27, 2020;

KFF Tracking Poll: Half Population Delaying Care

KFF, the poll was conducted June 8-14 among a nationally representative random digit dial telephone sample of 1,296 adults. Highlights:

  • 89% of adults say they left their home to shop for food, medicine, or essential household items in the past week, including 61% who say they did this multiple times – up from 44% in April.

  • 48% of those who went shopping and 44% who went to work say they are worried about exposure to the virus.

  • 52% say they or someone in their family has skipped or delayed getting medical or dental care because of coronavirus this month – similar to the share who said so last month (48%).The types of care most often put off include dental check-ups and procedures (37% of all adults) and regular check-ups or physical exams (30% of all adults). Fewer report skipping or postponing doctor visits for symptoms they were experiencing (15% of all adults), doctor visits for chronic conditions (13%) or preventive screenings (12%).

  • More than a quarter of those who say they or a family member skipped or postponed care because of coronavirus (27%, or 14% of all adults) say their or their family member’s condition worsened as a result.

“Poll: Americans are Leaving Home More Often Now Than in April as States Ease Social Distancing Restrictions, though Coronavirus Fears Remain” Kaiser Family Foundation June 26,2020

Democracy Fund Survey: Young Adults Resist Social Distancing

Per the Democracy Fund + UCLA Nationscape Project survey of 6,914 adults conducted June 11-17:

  • Among Americans ages 18 to 29, 45% of Americans 18-29 said in the past week they have socialized with people they do not live with while not maintaining social distancing vs. 42% for ages 30-44, 28% for those 45-64 and 21% for those 65+.

  • More than half of Republicans ages 18 to 29 (55%) and 30 to 44 (56%) said they did not practice social distancing when hanging out with people they do not live with vs. Democrats at 40% for those ages 18 to 29 and 34% for those ages 30 to 44.

“Young Americans less likely to social distance as coronavirus cases continue to rise” Democracy Fund June 26, 2020;

KFF: Impact of Pandemic on Employer Sponsored Health Coverage

  • If the 14 states that have not adopted the Medicaid expansion to date do so, 4.9 million would gain coverage: 2.8 million through Medicaid and 2.1 million through marketplace subsidies.

  • The total reach of Medicaid among uninsured nonelderly adults in non-expansion states could reach 10 million.

“How Many Uninsured Adults Could Be Reached If All States Expanded Medicaid?” Kaiser Family Foundation June 25, 2020

CDC: Coronavirus Incidence Higher than Early Estimates

The Centers for Disease Control and Prevention estimates that only about 1 in every 10 Covid-19 cases in the U.S. has been identified, Director Robert Redfield told reporters Thursday. He also noted that most Americans are still susceptible to the virus.

The CDC now estimates that more than 20 million Americans may have had the coronavirus reflects the large number of individuals who either exhibit mild or no symptoms or previously couldn’t get tested. Overall, the U.S. accounts for more than 25% of the more than 9.45 million cases world-wide, according to data from Johns Hopkins. The World Health Organization says it expects total global cases to pass 10 million next week.

Transcript for the CDC Telebriefing Update on COVID-19 June 15, 2020;

Bipartisan Legislation to Prevent Drug Price Gauging Introduced

A bipartisan group of lawmakers introduced a pair of bills last week that would prohibit drug makers from price gouging and require all taxpayer-funded Covid-19 research to be recorded in a federal database. One bill would prohibit drug makers from gaining monopolies on new, taxpayer-funded Covid-19 drugs along with other constraints against profiteering.  The other bill would allow Americans to monitor tax dollars used by federal agencies to research Covid-19 medical products by creating a single database.

Ed Silverman “Lawmakers push Covid-19 bills to prevent price gouging, track federal funds used to discover drugs” Stat June 22, 2020


Hospitals Lose Lawsuit Against HHS Over Price Disclosure Rule

Industry groups representing hospitals and health systems across the nation sued HHS last year, challenging a November 15, 2019 executive order that requires hospitals to disclose the rates they negotiate with insurers beginning in 2021 for 300 shoppable services. Under the rule, hospitals must report the rates they strike with individual insurers for all services, including drugs, supplies, facility fees and care by doctors who work for the facility or pay a $300 per-day fine.

Last Tuesday, U.S. District Judge Carl Nichols granted HHS’ motion for summary judgement essentially denying the industry group complaint. The AHA said it will appeal the decision and seek expedited review.

“Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First” June 24, 2019

Brady “Hospitals must prepare for price transparency, experts say” Modern Healthcare June 27, 2020

Nurses Strike at LA Area HCA Hospitals
1,000 nurses represented by SEIU Local 121RN in California planning to strike from June 26 through July 6 in protest of hospital understaffing during the pandemic, which they say violates California’s nurse-to-patient ratio laws. In response, HCA has created a unit focused on strike-related labor shortages, offering nurses who appear for shifts during strikes higher pay than they currently receive and free continental breakfast. The company is also seeking to hire labor relations directors in Denver, Dallas, Kansas City and Nashville, Tennessee, and has continued retaining union avoidance consultants in Asheville, North Carolina, amid a union organizing drive at Mission Hospital
Michael Sainato “US Nurses At For-Profit Hospital Chain To Strike Over Cuts And PPE Shortages” The Guardian June 23, 2020

1.5% of Drugs Purchased by Importation

In this cross-sectional study of 61 238 US adults taking prescription medication, 1.5% reported medication purchases from countries outside the US. Use of the internet for health information and online pharmacy purchases was associated with medication purchases outside the US. “The findings suggest that patients are not using prescription purchases outside the US to meet their medication needs.”

Hong et al “Socioeconomic and Demographic Characteristics of US Adults Who Purchase Prescription Drugs From Other Countries “JAMA Netw Open. 2020;3(6): e208968.

Update: Medicare Advantage Network Adequacy Requirement

On June 17, 2020, CMS released updated Medicare Advantage and 1876 Cost Plan Network Adequacy Guidance for Medicare Advantage (MA) health plans for Contract Year 2021. CMS requires MA health plans to submit their networks through Health Service Delivery (HSD tables) on 13 facility types and 27 provider specialty types. Changes were made in four areas:

  • Outpatient dialysis was removed from the list of provider types subject to network adequacy reviews because members may receive dialysis services including in home, inpatient and outpatient settings

  • County type designations and ratios: The time and distance standard were reduced from 90% to 85 % in Micro, Rural, and Counties with Extreme Access Considerations (CEAC) counties

  • Telehealth Credit. Organizations will receive a 10% credit towards the percentage of the time and distance standards calculation to determine if beneficiaries are residing within designated areas

  • Certificate of Need (CON) credit. Some states developed CON laws and similar restrictions that require government approvals before health care facilities may expand to promote resource savings and prevent investments that could raise hospital costs.

“Medicare Advantage and Section 1876 Cost Plan Network Adequacy Guidance” June 17, 2020;

Blue Cross of NC Offers Sticks and Carrot to Independent Primary Care Practitioners

Last week, Blue Cross and Blue Shield of North Carolina announced its plan provide financial support to independent primary-care practices in the state provided they agree to remain independent and join an existing accountable care organization in the insurer’s value-based care program, Blue Premier, or join one run by Aledade, a company that assists with running ACOs. Under the initiative, Accelerate to Value, Blue Cross NC will compare primary-care practices’ revenue in 2020 with their average revenue in 2019 and make a lump-sum payment to fill the gap and again in 2021.

Shelby Livingston “N.C. Blues will pay primary-care docs to stay open, adopt value-based care” Modern Healthcare June 29, 2020;