Obamacare 2.0, a New Healthcare Shakeup, Is on Democrats' Agenda

From Left: Siri Stafford/Getty; Bryan Allen/Getty

Joe Biden campaigned on a promise to fix Obamacare rather than make sweeping changes like enacting Medicare for All. In his first major legislative proposal, the $1.9 trillion COVID-19 relief bill currently making its way through Congress, he's already included a key component of his plan: expanding subsidies to make health insurance more affordable for more people.

But it will take more than a few tweaks tucked into a budget bill to fix what's wrong with the U.S. health care system—failures that the coronavirus pandemic have exposed and underscored. America's public-health failure in the current crisis reflects the country's long, sorry record of neglect, poor organization, underfunding, and misplaced priorities when it comes to public health. Add to those woes the sky-high cost of health care, uneven access and relatively poor outcomes, it's clear the American public has been living for decades with a health system that is failing.

The 2010 Affordable Care Act (also known as Obamacare) was designed to start addressing these and other shortcomings. But four years of the Trump presidency, persistent resistance from both Republican-led states and entrenched health care interests and, finally, a devastating pandemic have conspired to undercut many of the hoped-for benefits. That leaves America in danger of emerging from the pandemic with worse prospects for health than ever before.

Can Joe Biden get American health back on track?

The steps Biden is already taking to shore up Obamacare could make a major dent in the ranks of uninsured Americans that have grown during the pandemic and subsequent economic downturn. In addition to expanding subsidies, he has issued an executive order to reopen the ACA's markets and advertise heavily to entice people to enroll. He has also promised to create a Medicare-like government-run health-insurance plan that people of any age can buy into—the so-called "public option" that will compete with private plans on the Obamacare insurance marketplace—and to lower drug prices and eliminate "surprise billing" from hospitals. But these are only first steps.

The U.S. currently ranks near the bottom among developed countries on major measures of health and healthcare. Bringing it up to standard would take a huge investment and require the political will for massive change. According to a KFF Health Tracking poll, 48 percent of U.S. adults want Biden and Congress to build on the ACA, including three in four Democrats, rather than scale it back or eliminate it.

If it's possible to fix American healthcare, now would be the time. Americans are more attuned to health and the nation's health system than they've been for at least a century. Biden may have a unique opportunity to repair and expand Obamacare and, in doing so, rescue public health—if he can overcome the inevitable resistance from Republicans and entrenched healthcare interests.

"This is the moment where we can address our health problems and make transformational changes," says Democratic Congresswoman Rosa DeLauro, who heads the House Appropriations Committee. "But in Washington when windows like this open, they close quickly."

Low Marks on All Counts

The pandemic cast an ugly light on America's health infrastructure. The country still does not have a good COVID-19 testing program and has yet to develop any sort of wide-ranging contact-tracing system; both are considered essential to successful efforts to combat the pandemic, as demonstrated in numerous other countries. Mask-wearing and social distancing, the two main tools of pandemic containment, have been spotty at best in the U.S., and shortages of protective equipment for healthcare workers and others still haven't fully eased. The U.S. played a big role in pushing the historically fast vaccine development, but then followed up with a disorganized, slow and uneven vaccine distribution effort.

The vaccines, though, are finally being rolled out. The nation may turn the corner on the pandemic by this summer, if variants of SARS-CoV-2 don't act as spoilers. But at that point it will be well worth pondering the possibility that the next pandemic is looming just down the road. In just the past 20 years the world has experienced five pandemics, including COVID-19, and experts are watching a range of viruses that have a strong potential to suddenly leap into dangerous prominence.

Will we be any better prepared for the next pandemic than we were for this one? The Trump administration's missteps in its response disguise the fact that our health infrastructures simply weren't up to this crisis—or any major health crisis, for that matter.

They were inadequate long before Trump took office, and they still are.

"In the postwar era, there is no point at which the U.S. has had a public-health commitment commensurate with the dangers we're now facing," says economist Robert Reich, the U.S. secretary of labor under Clinton and now a public-policy professor at the University of California Berkeley.

The price Americans pay for troubled public health and health care systems is written in grim statistics. U.S. life expectancy has fallen behind that of 35 countries, including Slovenia and Costa Rica. Americans lead almost all developed countries in the incidence of obesity, heart disease and diabetes, among other chronic diseases, with death rates to match. The U.S. maternal death rate is not only the worst among fully developed countries, it also ranks behind Kazakhstan, Bosnia and many other less-advanced countries. All of these problems disproportionately plague Black and Hispanic Americans, but that's not to say white Americans are faring well—they do worse by virtually all measures than their counterparts in the U.K., for example.

Not only are people sicker in the U.S. than elsewhere, they get financially punished for the privilege. Healthcare costs have ballooned by more than 50 percent since 2010, to levels that are, on average, more than twice that of other advanced countries. "We pay two times as much, and still get the worst outcomes," says Georges Benjamin, a physician and executive director of the American Public Health Association (APHA).

Meanwhile, about 30 million Americans have no health insurance to help with those soaring costs (up from 27 million when Trump took office four years ago). The insurance subsidies of the Affordable Care Act made health care more accessible and established penalties for those who weren't covered, which led to insuring 17 million of the 44 million people with no insurance before the law was enacted. But the efforts of the Trump administration to undermine Obamacare—by dropping the tax penalties for remaining uninsured (the "individual mandate") and eliminating funding for promoting the program, among other things—have pushed the number of uninsured up again.

A Lack of Prevention

Who to blame? There's no clear answer to that question, which points to a big part of the problem: The U.S. has no central government agency responsible for health, as most developed countries do. Instead, responsibility is scattered across a vast, little-organized conglomeration of federal, state and local government agencies, private healthcare providers and insurers. The Department of Health and Human Services (HHS) houses the CDC and the Centers for Medicare & Medicaid Services (CMS), but has little sway over the private insurance and healthcare most Americans rely on, or over the state agencies that make most health-related decisions.

What falls between the cracks of this system is preventive health. "Our fragmented, mostly commercial healthcare system largely ignores it," says Larry Levitt, executive vice president for health policy at the Henry J. Kaiser Family Foundation. U.S. hospitals, the great majority of which are essentially commercial operations, operate on a "fee-for-service" basis, which means they are paid to treat sick patients, not to keep them from getting sick in the first place. The Veterans Health Administration is the only major healthcare organization in America that does better financially when it keeps patients healthy, which creates a powerful incentive to stay in close contact with patients, to get them into programs to help them overcome unhealthy habits, and to be aggressive about treating problems when they first emerge. Perhaps as a result, studies have shown that VA patients tend to get better healthcare than other U.S. patients, are typically more satisfied with their care, and incur costs that average about 10 percent lower.

Almost everywhere else in the developed world, preventive health is supported by strong primary-care systems that most people have regular access to and that promote healthy habits such as quitting smoking, losing excess weight and staying physically active; they also look to nip potential health problems in the bud when they're easier to treat. In the U.S., primary-care visits are irregular, often perfunctory and simply neglected altogether by a big swath of the public to save the expense of doctor's visits and tests. In 2018, the CDC found, 50 million Americans didn't see any healthcare professional at all.

As a result, the U.S. is beset by a virtual epidemic of preventable hospitalizations and deaths from chronic disease. "Primary care is the poor relation of healthcare in America," says Tom Frieden, former director of the CDC in the Obama administration and now CEO of the non-profit preventive-health initiative Resolve to Save Lives. "We can't even get the most important things right in health, like controlling blood pressure, limiting sodium, and reducing tobacco addiction." As long as no one pays healthcare systems for pushing those measures, improvements are unlikely.

The neglect of preventive medicine isn't the only problem. Another big cause of unusually high rates of disease, with their resulting horrific costs and death rates, is the nation's miserable record in addressing what experts call the "social determinants of health"—meaning the links between poor health and poverty, inadequate housing and lack of access to good education, nutrition and other basic resources. These links have now been firmly established by numerous studies and have become a maxim in public-health circles.

To take one recent pre-pandemic study, an analysis of data transmitted from smart fever thermometers from Kinsa, a maker of medical devices, found that the rate of illness in the Los Angeles area was eight times higher in families with incomes below $20,000 than in those with incomes above $140,000. "Eighty percent of what makes you healthy has nothing to do with the doctor's office," says the APHA's Benjamin.
It has everything to do with who can afford routine health care.

The Road to Better Health

Beyond leading the country out of the COVID-19 crisis, Biden seems determined to push the government to make broader and longer-term improvements to both public health and healthcare in the U.S. For starters, he is already moving to bulk up the country's ability to respond more effectively to the next pandemic. Among his proposals are an epidemic forecasting center and new facilities for genetic testing of spreading viruses for the purpose of quickly identifying dangerous new variants. His administration is also looking into funding the development of prototype mRNA vaccines against known viruses considered especially likely to mutate into new threats, as well as ways of expanding manufacturing and distribution facilities for vaccines and protective gear.

Some of Biden's proposals for immediately improving the country's COVID-19 situation could have lasting benefit, notes Kaiser's Levitt. For instance, a plan to add 100,000 workers to the rolls of public-health agencies across the country would have benefits beyond pandemic preparedness. "That adds capacity that could translate into a stronger public-health infrastructure," Levitt says. "I would hope the pandemic has illustrated how ill-equipped our profit-driven healthcare system is for dealing with population health."

That added workforce would be part of a larger investment in public health. Only three percent of the money spent on health in the U.S. currently goes to public health and its emphasis on protecting against disease; the other 97 percent goes to paying to treat the disease that the health system failed to protect against. "The other rich countries of the world have public-health infrastructures that are much larger than ours in proportion to their populations and their economies," says Reich. Biden seems determined to narrow that gap both by expanding the CDC and directing more money to state and local public-health agencies.

Much of what Biden hopes to do to improve health can be accomplished by building on the Affordable Care Act. Its central selling point has always been making healthcare insurance more accessible and affordable to the currently uninsured. Obamacare has not come close to solving the problem of cost, however: by the end of 2019, about two-thirds of the 20 million people eligible for ACA-subsidized healthcare premiums still didn't buy insurance, most likely because the premiums, co-pays and deductibles remained too high. Millions of other Americans didn't take advantage of the ACA's extended eligibility for Medicaid, which often pays for nearly all healthcare costs. It hasn't helped that 12 Republican-dominated states have steadfastly refused to make those benefits available to their residents, even though it would cost the states little to do so.

To fix these problems, Biden has proposed increasing the subsidies by about 20 percent, reducing the out-of-pocket costs of care provided by subsidized plans, allowing the Medicaid-eligible to bypass state barriers to signing up, and even setting up automatic enrollment in Medicaid for eligible families when they enroll students in public school. His administration's stated goal is to get 97 percent of the U.S. public covered by private healthcare insurance, a government insurance plan—the so-called "public option"—or by Medicare and Medicaid, up from 91 percent today.

What might ultimately have an even greater impact on Americans' health is the way in which Obamacare could help push much of the healthcare system away from fee-for-service payments. The goal would be to move the system toward health-maintenance or "capitated" approaches that financially reward healthcare providers for preventing illness instead of treating it. That's usually accomplished by paying providers a set per-patient fee every month regardless of how much or how little treatment they have to provide. Private healthcare providers and insurance companies have long resisted this approach because they currently make so much money by charging heavily for the extensive care many patients need.

That move could be accomplished, says Freiden, by directing the CMS, the federal agency that administers the two programs, to expand pilot programs around capitated care, demonstrating that the approach saves the government money. At that point CMS could expand the approach to all of Medicare and Medicaid, forcing most hospitals to adapt. "It would become policy for the country," says Freiden. "And Biden could do it right now. It wouldn't even require congressional action." The result, he claims, would be a huge reduction in healthcare paperwork and other costs, and a big shift to prevention-focused, highly accessible primary care, with attendant improvements in healthcare outcomes.
Among other Biden policy proposals: Ending regulations that prohibit Medicare from negotiating lower prices from drug manufacturers, funding the expansion of community health centers, and fighting consolidation in the hospital industry that reduces competition and drives prices up.

Biden could also go a long way toward addressing the social determinants of health by expanding the child tax credit and enacting a proposed child allowance—essentially programs that give money to families. That's a fight that Congresswoman DeLauro is championing via the powerful Appropriations Committee. She says she's confident on both fronts. "I never thought we'd see this much momentum for the child allowance," she says. "This addresses the direct correlation between child poverty and health." The exact amounts and income phase-outs are still being debated, but the programs are almost certain to cost tens of billions of dollars annually, and possibly $100 billion or more. That's still a bargain, insists DeLauro. Research has shown that child-poverty programs pay for themselves eight times over in long-term healthcare and other savings, she says. Although most Republicans are fighting the proposals, Senator Mitt Romney has proposed modest child-allowance payments to non-wealthy families, though it would replace the child tax credit and some other existing aid to poor families.

The Coming Pushback

Some of these initiatives are certain to face stiff resistance. Republicans will fight the measures because they are expensive, as they're currently fighting Biden's proposed COVID-19 relief bill. Healthcare providers and insurers will howl at being pushed into capitated payments because they're doing just fine under the fee-for-service approach. Even if Biden succeeds in pushing most of the programs through, sustaining them once the pandemic has faded will be an ongoing fight. "We have to make sure this isn't a one-term, crisis-driven response," says Laudan Aron, a senior fellow in the Health Policy Center at the Urban Institute, a policy think-tank.

On the other hand, the public tends to broadly support health-improvement spending—especially now, of course, but they did even before the pandemic. A Hill-HarrisX poll in October 2018 found that 70 percent of registered voters supported Medicare for all Americans. Biden and the Democrats can leverage that support, along with the current momentum from COVID-19-related efforts. Sustaining the programs after the pandemic ends may be a challenge, but history shows that programs such as Social Security and the ACA that provide clear benefits felt by the public are difficult to claw back.

The public would almost certainly feel the benefits of bringing the nation's health systems up to par with the rest of the world. "Improvements in the health infrastructure will improve the quality of life," says William Riley, director of the National Institutes of Health's Office of Behavioral and Social Sciences Research. "And they'd probably cost less than healthcare does now. That makes them a good deal."

It's a good deal, if Biden can close it.

Siri Stafford/Getty

About the writer

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