The Suit Magazine

As the clock ticked towards 10:48 P.M., many of the lawmakers raised their voices rose in unison to count down from ten as if it were New Years Eve. But this was an historic event far more sginificant than the yearly ball-drop in Times Sqaure-- this was the voting deadline for the sweeping Patient Protection and Affordable Care Act (PPACA), which passed by a narrow margin of 219-212.

But this was only a qualified victory. As John E. McDonough, Ph.D, a leading architect of the new health care reform law, admitted, “[the PPACA] does not do enough to fix health care, for access, for cost, and for quality. Much more could have been done,” he said in an interview with The Suit Magazine.  But, as a seasoned health policy expert and CUNY’s Distinguished Fellow in Public Health, Dr. McDonough recognizes that the PPACA “was probably close to the best law that could have gotten through Congress in the period of time that Congress was considering it.”  The political climate has since changed.

After the 2008 election, Democrats enjoyed a super-majority in the Senate, and a sweeping reform bill was in the works—but the window of opportunity slammed shut in 2009. The blow struck at an idyllic seaside compound in Hyannis Port, Mass., when a fatal brain tumor laid to rest one of health care reform’s ardent champions, Ted Kennedy.  The special election for Kennedy’s replacement as Mass. Senator resulted in a win for Republican Scott Brown, ending the democratic super-majority in the Senate.  Anticipating a November slaughter, democrats then felt compelled to take advantage of their short opportunity to pass the PPACA.

As McDonough explains, Democrats were smart to pass the bill while they still could.  “You couldn’t do it again if your life depended on it,” he told The Suit.  “The values of the people in Congress [today] sharply differ from the people that were running the House and the Senate back in 2009 [and early] 2010.” He paused and then continued, “It comes down to the question of, ‘Do you think that the United States has the best health care system in the world—and that the only issue is making sure that we keep it as is—or do you believe that the US healthcare system is in dire need of some serious repair?’ Republicans tend to believe very much the former, and Democrats very much believe the latter.” He cites a precedent in Republican opposition to the creation of Medicare and Medicaid in 1965.   

Of course Republicans cite the extensive costs, as well as the role of government in the whole health care process. The projected price of the reform is still being hotly disputed. The Congressional Budget Office—a non-partisan third-party cost estimation organization—originally projected a cost of $950 billion, which would be offset by a $138 billion reduction in the federal deficit. But those figures did not include additional discretionary spending, and so California House Representative Jerry Lewis asked for a revised estimate before the bill passed before Congress. The CBO responded on May 11 with a projected additional cost of $115 billion in discretionary spending over 10 years, bringing the total cost of the reform to over $1 trillion—and some experts think that even this is a conservative estimate.

Proponents have noted the need for reform because of the estimated 50 million sick and impoverished Americans currently lacking health insurance.  The PPACA is expected to facilitate access to coverage for 31 million. And even though the U.S. currently has the highest per-capita health care expenditures in the developed world, we are below average in several measures, including life expectancy and infant mortality.  McDonough attributes Republican opposition to health care reform to core ideas: “Conservatives value expanding coverage less than keeping taxes as low as possible and protecting individual freedoms against government mandates.”

And that means the fight over health care reform is not over.  Republicans and their affiliates are vigorously challenging the new act in the media, in federal and state legislatures, and in the courts.  McDonough feels it is likely that the newly elected House Republican majority, “will seek to put sand in the gears of the reforms, by choking off funding for the federal agencies charged with setting up and enforcing the new law’s provisions.”

If new programs set up under the PPACA are not adequately funded, then the remaining provisions likely would not function as intended, handicapping the reform as a whole.  For example, the government-regulated private health insurance exchanges—where employers and individuals will be able to collectively negotiate with insurance companies for better rates and coverage—require federal funding to cover setup costs.  And non-funding would be a double whammy, because the exchanges are also the venue where citizens will be able to apply for financial subsidies to help with their private premiums and co-payments. 

If the high price tag motivates enough opposition, the administrative efforts required to put the bill into effect may have to be curtailed, and the goal of enrolling 31 million in health care will be in jeopardy.  That would ultimately put a strain on insurance firms, making it difficult for them to comply with the new ban on discriminating against applicants on the basis of pre-existing conditions.

Before the act, insurance companies controlled their risk portfolios by refusing to cover certain kinds of care and by rejecting applicants with pre-existing conditions.  The reform will ban these practices in 2014, and in the meantime create a temporary program to help sick citizens enroll in state-run high-risk insurance pools.  To balance that increased expenditure, PPACA mandates that 31 million Americans, including young and healthy people, get coverage.  That will add a population to the insurance companies’ risk-pool which does not utilize a great deal of health resources, and will lower the overall average cost-per-customer to the insurance company.

However, this individual mandate provision is the most contentious piece of the new bill. PPACA opponents argue that the mandate exceeds the Constitution’s limits on congressional authority; claiming the government has no right to force people to buy a product.  They have filed over 20 lawsuits in the federal courts challenging the law’s constitutionality. 

On December 13, U.S. District Court Judge Henry E. Hudson of Va. decided against the mandate in the first federal ruling of its kind. The lawsuit, brought by Va. Governor Ken Cuccinelli, argued that the mandate violates a constitutional clause limiting the government’s power to regulate commerce.

The argument for a federal mandate’s constitutionality defines a purchase of insurance as a commercial activity, subject to federal interstate commerce laws.  A brief filed by top economists argued that the choice to refrain from buying health insurance is indeed an activity: it is a decision as to how one’s health care will be provided for, since the use of health services is almost inevitable at some point in a person’s life.  Those who elect to remain uninsured, theoretically, affect the interstate health care market by shifting the costs for their care upon others and by lowering the demand for private insurance, depriving insurance firms of an important source of revenue. 

Two other federal judges disagreed with Hudson—one from Hudson’s state of Va. and the other from Mich.— and said, “far from ‘inactivity,’ by choosing to forgo insurance, plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance.”

Hudson’s decision was a victory in spirit for Republicans nationwide, but in terms of the political reality the ruling will have little impact. Since the judge did not grant an injunction in this case, the reform is still en route to implementation as is. An appeal is expected, and the issue may go all the way to the Supreme Court. Whether Hudson’s decision results in major changes or not, a line in the sand has been drawn; the fight over the controversial mandate provision has only just begun.

So, we have a momentous bill, the first to seriously address the problems posed by private provision of health care, along with payment by private insurance companies.  Yet it is a bill which is seriously flawed and may be more an insurance reform than true health care reform.  But it has economic consequences, so we’re even fighting over the compromise.  It all begs the question: How is it that the richest nation on earth has placed itself in a position in which the government has to force its own citizens to purchase health coverage? Strange. And uniquely American.

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