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date: 04 August 2020

(p. xiii) Foreword: U.S. Healthcare Law Enters A New Age

(p. xiii) Foreword

U.S. Healthcare Law Enters A New Age

This Handbook offers a comprehensive analysis of the changing landscape of American healthcare. While the passage of the Affordable Care Act (ACA) in 2010 created a national legal framework for healthcare in America, many other laws have shaped the healthcare system over the last fifty years. The chapter authors capably describe and explain the new legal dynamics of healthcare in both the public and private sectors, and the editors pull together in one volume a range of informed viewpoints on what has changed in health law and what changes to look for in the future. Our understanding of American healthcare, a unique social sector with a huge impact on our population and economy as well as significant global ramifications, is greatly advanced by this Handbook.

I think we Americans share several fundamental healthcare values, even if we disagree about the best plan to accomplish the goals. We believe that everyone should have access to healthcare when they need it. We want our doctor’s advice to be based on the most current medical information and to be aimed at keeping us healthy and well and, if at all possible, out of the hospital. When faced with a health situation that requires hospitalization, we want to receive the best care possible and the data and information we need to make informed health decisions for our loved ones and ourselves.

For decades, Republican and Democratic presidents talked about healthcare and how the United States could make progress toward universal coverage, joining the rest of the developed world. The battles were contentious, but progress was made for various populations—older Americans, low-income pregnant women and children, disabled individuals, and workers in large companies.

But huge gaps persisted. While the United States had the best healthcare for some people some of the time, as a nation Americans paid more for healthcare than any country on earth. Compared to other developed countries, we had the highest percentage of our population uninsured, and our citizens lived sicker and died younger than most of their peers across the globe. Changing that snapshot was essential for our global competitiveness and for our economy.

Passing Health Reform

When Illinois Senator Barack Obama announced his candidacy for president in February 2007, he committed to passing comprehensive health reform in his first term. His Democratic (p. xiv) challenger and even the Republican candidates also had plans for expanded healthcare and proposed various ways to lower medical costs.

So it shouldn’t have come as a big surprise to anyone in Congress or the public that health reform was on the new president’s must-do agenda. The big surprise, given decades of promises from both Republican and Democratic presidents to reform healthcare, was that President Obama accomplished his goal. Within fourteen months of taking office, on March 23, 2010, he signed into law the Patient Protection and Affordable Care Act (ACA). That same day, the first of many legal challenges was filed, with twenty-seven attorneys general asserting that the law was unconstitutional.

The ACA, often called “Obamacare” by its critics and some of its fans, focused on three primary goals: access to health insurance for those Americans whose jobs, income levels, or health status didn’t allow them to qualify for affordable coverage; better health and better care for all Americans; and lower health inflation through improvements to the healthcare delivery system. Most important, Congress created a new national insurance framework, in which individuals would be expected to have coverage but would not be screened or penalized by private insurers for health conditions, premiums would not differ based on gender, and lower-income individuals would be eligible for federal financial subsidies or public coverage. Most of the focus and attention since the passage of the law has been on the new private insurance markets and the expansion of Medicaid, both of which were designed to address access to affordable healthcare for uninsured Americans. The other major elements of the law—with provisions aimed at improving healthcare and underlying health—are just beginning to be well understood.

An even earlier bill signed by President Obama set the stage for this new healthcare system. When President Obama was elected in 2008, most health information was still being exchanged in a paper format. Even though the healthcare industry accounted for approximately a sixth of the nation’s GDP, less than 20% of doctors and 10% of hospitals used electronic health records. Tracking payments and outcomes to compare costs of health treatments, provider successes, and drug impacts was often impossible. The 2009 American Recovery and Reinvestment Act (ARRA) included authorization for the Department of Health and Human Services to develop a national strategy for expanding the use of electronic health records and funded financial incentives to hospitals and doctors to adopt new information technology, creating a critical platform for healthcare innovation.

The job of implementing comprehensive health reform was enormous and had to begin immediately after the ACA was passed, even without the recommended congressional funding, with the overhang of a constitutional challenge, and with many states declaring that they would not participate in what was designed as a federal-state partnership. The ACA had a very aggressive timetable, and while the process of putting any detailed statute into effect is complicated, this was particularly difficult.

While legislative language provides the skeleton for any major law, rules and regulations bring it to life, creating the operational roadmap for how the statute will work in the real world. Three major U.S. cabinet-level administrative agencies—the Department of Health and Human Services (which I had the privilege of leading as Secretary), the Department of the Treasury, and the Department of Labor—needed to partner to write all the rules and regulations, because each had key areas of jurisdiction. Meanwhile, Republicans in the House, who had voted against the final passage of the law and then gained a majority in the 2010 (p. xv) elections, opposed funding for implementation and initiated a series of hearings and oversight requests that demanded enormous amounts of time and effort to fulfill.

One can find an historical parallel for the initial opposition to the ACA. There was much furor in the five years after the Social Security law passed in 1935, when taxes were being collected but benefits were not yet in place. The lesson was clear: It is hard to defend against claims about what might happen before a program is fully implemented and benefits are available. Given that the final version of the ACA passed in the House and Senate without any Republican support and was challenged immediately as unconstitutional by state attorneys general, no one should be surprised that the earliest years were very acrimonious. By the time the ACA was fully implemented and benefits became available in January 2014, opponents had spent millions of dollars to discredit the law and discourage people from participating. Unfortunately, attempts to obstruct or reverse the ACA have not yet abated. By contrast, once Americans began collecting retirement benefits in 1940, Social Security was quickly accepted as essential support for older and disabled Americans.

The skill and effort of my department’s legal teams to defend against court challenges and respond to a huge volume of adversarial congressional requests, while at the same time collaborating with peers from other federal agencies and states to design a new marketplace for health insurance and to write rules for an historic Medicaid expansion, were extraordinary. The teams also had to work in an uncertain environment for implementation. We were optimistic about a positive outcome from the Supreme Court in the initial constitutional challenges, but no one could (or, as it turned out, did) predict what the Court would decide, and the law’s framework had to be designed to work nationally, in spite of major differences in circumstances and politics across the country. I was enormously grateful to work with talented, dedicated lawyers at every step in this process, who made sure that every time a new roadblock was created by the ACA’s opponents, we had a plan to advance the ACA’s mission within the boundaries of the law. Even so, it remained a great unknown how many of the states opposing the ACA would engage as partners with the federal government in the event that the law was ruled constitutional.

One essential element of the ACA was to create a new virtual marketplace where consumers can compare insurance plans available in their state on price and benefits, and then apply their individualized federal subsidy reflecting on their personal income and family size. Each marketplace was designed to offer products based on state law and premiums based on state competition and oversight, but that also complied with new national insurance rules. And this needed to be in place with or without state cooperation. At the same time, we worked to convince insurers to offer products in marketplaces throughout the country, because we knew that more competition would result in lower prices.

Another complicating factor in implementing the new marketplace framework was that the federal government did not have regulatory authority over the plans sold in the marketplaces because insurance products are regulated at the state level. That was true both before and after the ACA. While the Labor Department had oversight of various “self-insured” plans, no other federal agency was involved in health insurance regulation before the ACA’s passage.

This presented two immediate challenges: figuring out what would happen if some states did not fulfill their marketplace oversight role, and quickly adding expertise at the federal level both to partner with states and to administer marketplaces in states that refused to assume or share responsibility. It was unclear how many states would fall into each category, (p. xvi) but our job was to ensure that all citizens, regardless of where they lived, had access to the benefits authorized by federal law.

With the help of knowledgeable and creative legal minds, we worked to fashion a flexible approach to marketplace governance: States could choose to be a full partner, could assume some but not all of the oversight functions, or could entirely opt out without jeopardizing their residents’ access to the health coverage promised in the ACA.

Coming Online

By the time the Supreme Court issued its favorable decision on the constitutional challenge in June 2012, a presidential election was looming. The future of the Affordable Care Act was one of the major differences between President Obama and his Republican challenger, former Massachusetts governor Mitt Romney. Although Governor Romney only five years earlier had signed into Massachusetts law a bill that provided the template for the ACA, he pledged to repeal federal health reform if elected president. The program therefore continued under a cloud of uncertainty throughout 2012.

Even after President Obama was re-elected, Republicans in the House and Senate continued to attempt to de-fund implementation, to block rule-making, and to pledge to stop the ACA from taking full effect. Because the first open insurance enrollment was scheduled for 2013, it was too late for a nonparticipating state to establish the systems needed to run its own insurance market when the ACA survived the 2012 elections. And on October 1, 2013, the day open enrollment began across the country, the entire federal government was shut down by opponents of the ACA who refused to pass a budget, wreaking billions of dollars of damage on the economy and halting most federal programs from child care to clinical trials. Making things worse, there was also a major technical failure in the online federal marketplace, so millions of people had to wait to select and enroll in health plans.

The federal government was finally reopened fifteen days later, and after eight weeks of round-the-clock efforts to fix the website, the new marketplace was relaunched on December 1 and worked! By the time open enrollment ended in March 2014, 8 million individuals had chosen a new health plan, and millions more had qualified for Medicaid benefits in the states where expansion occurred.

To date, there has been measurable progress on the coverage goals of the ACA, and some positive trends are beginning to develop in areas that will take a longer time to assess definitively. In spite of the Republicans’ gaining control of the U.S. Senate in the 2014 election, marketplaces continue to function and more states have decided to expand Medicaid. Over 18 million Americans have new health insurance coverage, representing the largest decrease in the number of uninsured in U.S. history. Insurance rules and selling practices have been thoroughly disrupted, and it seems unlikely that individuals will ever return to an era of being locked out of the market due to preexisting health conditions or being unable to shop online to compare prices and benefits for a variety of insurance products.

While the goals of higher quality care, better population health, and lower costs through improved efficiency will take longer to measure, there are encouraging signs of progress. Annual healthcare inflation has remained well below pre-ACA levels, with some years seeing the smallest increases in half a century. The federal government has committed to using (p. xvii) its $1 trillion healthcare buying power to shift as quickly as possible from fee-for-service payments to smarter, value-based purchasing, in which payment is tied to health outcomes rather than the number of services provided. Preliminary results indicate that patient care is improving in hospitals. The occurrence of hospital-acquired conditions—infections and errors—has decreased in the last two years. And preventable readmissions have declined, the result of more attentive follow-up post discharge.

The ACA included a first-ever multiyear investment in prevention strategies, aimed at avoiding many diseases and better managing care for those already struggling with chronic illness. The focus of this investment is on obesity and smoking, the two underlying causes for the vast majority of diseases that cripple and kill people in the United States. Partners in these efforts include many federal government agencies as well as cities, schools, healthcare providers, parents, employers, and health advocates.

With over 80% of healthcare providers now using electronic data measures, aligning payment with desired outcomes, establishing and measuring health goals for patient populations, and rewarding providers who improve health and wellness are finally feasible. In addition, making the government’s health data publicly accessible has unlocked private sector investment in new companies and systems aimed at improving care and lowering costs. There have been more health start-ups in the past five years than in the previous twenty. And there is a significant learning collaboration underway between the public and private sectors aimed at improving health and healthcare.

What Comes Next?

Once again, a key issue in the upcoming 2016 presidential election is the survival of the ACA. While critics still demand its repeal if a president is elected who is willing to sign a repeal into law, nobody has proposed a viable alternative approach that could move the United States toward universal healthcare, improve population health, and lower costs in the system. And it seems less and less likely that any elected official could strip millions of American families of the healthcare benefits that they now enjoy.

While there has been significant early progress on the ACA implementation, there are still areas needing legal or legislative attention, where uncertainty or persistent gaps in coverage and cost create real inequities for Americans. The Supreme Court decision in 2012 to make the expansion of Medicaid a voluntary state decision damaged the congressional design of a continuum of coverage for low-income Americans. Politics permitting, new laws could mandate national expansion or give local jurisdictions within a state the authority to partner with the federal government. Another major coverage gap for many Americans derives from the definition of “unaffordable coverage” in a workplace, which triggers a tax subsidy for individuals to purchase coverage in the marketplace. Current regulations consider only the worker’s income and individual policy costs, and not the family income and policy costs for a spouse and dependents. This so-called “family glitch” leaves many Americans unable to afford family coverage in the workplace—yet ineligible for the tax subsidy.

Several laws passed by Congress, including the ACA, clearly require parity in care and coverage between those who suffer physical ailments and those patients who experience behavioral health problems. However, this is still not occurring in much of the health system (p. xviii) and is not being enforced by insurers. True parity is likely to take sustained effort through regulation and focused litigation to change the status quo.

There is growing concern about the pricing of new drugs and the current ban on Medicare, the largest government purchaser, negotiating lower drug prices for its beneficiaries. In addition to important legal issues regarding incentives for innovation and cost to society, drug pricing raises serious ethical questions about fairness to poorer and sicker Americans that should be debated and hopefully resolved.

As baby boomers age, end-of-life costs and concerns loom large. Who can make decisions for a critically ill patient, when an advance care directive must be followed or can be overridden, and what other legal and ethical issues need to be addressed in a hospital or nursing home setting are being discussed in state legislatures and in the halls of Congress.

With medical science continually offering new ways to extend life and treat disease but at considerable expense, issues of rationing care given finite resources will continue to be debated. And it is almost impossible to predict what opportunities and challenges will result from the next series of advancements.

These difficult issues are made more complicated by our varying religious beliefs and cultural differences. In a nation founded on the separation of church and state, we have already seen faith-based litigation contesting mandatory contraceptive coverage for employees. It is likely that treatment issues such as organ transplantation and various other life-prolonging drugs and procedures will give rise to more religiously motivated lawsuits and legislative battles.

Summing Up

Since 2010, the Affordable Care Act has put this country on a path to expanded access to affordable coverage, better health and better care for our entire population, and reduced costs through improvements to the care delivery system. Hopefully our elected leaders will focus their attention on ways to fully achieve our shared goals and to remedy the health and cost disparities that threaten to make us a less productive and prosperous country. This Handbook provides a comprehensive view of the laws that underpin the post-ACA reality of healthcare in America, and offers insights that will help us move forward.