tag:theconversation.com,2011:/fr/topics/aca-checkup-17866/articlesACA checkup – The Conversation2015-07-16T10:15:12Ztag:theconversation.com,2011:article/439022015-07-16T10:15:12Z2015-07-16T10:15:12ZThe ACA is here to stay, but that doesn’t mean the fight for health care reform is over<p>One of the biggest cases the Supreme Court decided this term upheld a key provision of the Affordable Care Act (ACA). The King v Burwell ruling averted the possibility that Obamacare would be torpedoed by restrictions on insurance subsidies in states that had not established their own health insurance exchange.</p>
<p>When the opinion was released, ACA supporters outside the court chanted with jubilation that “The ACA is here to stay.” </p>
<p>They are probably right, but there is still a lot of work to be done to maintain recent gains and make further progress. The fight for health care reform is not over with the ruling in King v Burwell – nor should it be.</p>
<p>We have avoided a crisis, but issues about meaningful insurance coverage, access to health care and costs were problems before the ruling and are still problems today.</p>
<h2>The fight over the ACA is not over</h2>
<p>King v Burwell isn’t the first existential threat that the ACA has survived. Since the ACA was enacted in 2010, I have conducted nearly 200 interviews with policymakers about the politics of health reform. This has given me a view of the ACA’s implementation from the trenches. </p>
<p>In late 2012, after President Obama had just won reelection and the <a href="http://www.scotusblog.com/case-files/cases/national-federation-of-independent-business-v-sebelius/">Supreme Court had upheld</a> the individual mandate, a critical part of the ACA requiring individuals to have insurance, I <a href="https://www.statereforum.org/weekly-insight/state-election-results-and-the-aca">wrote that</a> “We can finally say with some certainty that the ACA is here to stay.” </p>
<p>But this time I am more cautious about predicting an end to the fighting over the ACA. </p>
<p>The Republican-controlled Congress will never successfully repeal the ACA as long as President Obama wields the veto pen. But what if a Republican occupies the White House in 2017? </p>
<p>Right now, it seems implausible that enough lawmakers would be willing to remove insurance from millions of Americans and reinstate health insurance policies that made it very difficult for people with preexisting conditions to obtain coverage. </p>
<p>But Republicans will continue to push for a full repeal over the next two years, including many of the two dozen candidates for the party’s presidential nomination. Most <a href="http://townhall.com/tipsheet/christinerousselle/2015/06/25/roundup-2016-candidate-reactions-to-king-v-burwell-decision-n2017372">had press releases or tweets</a> calling for repeal almost immediately after the Supreme Court decision was announced. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"614085054227214338"}"></div></p>
<p>One contender, Senator Ted Cruz of Texas, <a href="https://www.tedcruz.org/news/cruz-any-candidate-not-willing-to-make-2016-a-referendum-on-repealing-obamacare-should-step-aside/">responded</a> that:</p>
<blockquote>
<p>Every GOP candidate for the Republican nomination should know that this decision makes the 2016 election a referendum on the full repeal of Obamacare.</p>
</blockquote>
<h2>Keep working on Medicaid expansion</h2>
<p>Right now, policymakers, scholars and advocates should continue focusing on expanding Medicaid. The program provides health care to people with low incomes. </p>
<p>Before the ACA was implemented, eligibility for this program had been historically limited to certain categories of people. How poor you had to be to qualify depended on whether you were a child, a pregnant woman or a parent. Childless adults generally could not qualify.</p>
<p>The ACA tried to change this by expanding Medicaid eligibility to everyone whose income is less than 138% of the federal poverty level. States technically were given the choice of whether or not to participate, but would lose all their Medicaid money if they refused. But in 2012, the Supreme Court decided that this was unconstitutionally coercive. That meant states could maintain their existing Medicaid program even if they refused to participate in the expansion.</p>
<p>To date, about 20 states still have not cooperated with this part of the law, preventing millions from receiving coverage and causing hospitals to swallow large costs from uncompensated care. This includes most of the South and states with large uninsured populations such as Florida and Texas. </p>
<p>An estimated <a href="http://kff.org/medicaid/issue-brief/medicaid-expansion-health-coverage-and-spending-an-update-for-the-21-states-that-have-not-expanded-eligibility/">4.3 million more people</a> would be insured if the remaining states expanded Medicaid.</p>
<p>With King v Burwell in the rear-view mirror, it looks like some states are considering expanding Medicaid. Utah is negotiating with the Obama administration about expansion. Alaska Governor Bill Walker is set to announce plans to expand Medicaid on <a href="https://www.adn.com/article/20150713/alaska-gov-walker-announce-plans-medicaid-expansion-thursday">July 15</a>. Other states are developing <a href="http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/07/08/on-medicaid-expansion-a-question-of-math-and-politics">plans for expansion</a>.</p>
<p>Refusing to expand Medicaid is a missed opportunity for states and their hospitals. The federal government is initially paying 100% of the expansion costs (which will drop to 90% in 2020). This is substantially more than the average 57% it pays for the pre-ACA version of the program. </p>
<p>More people having coverage results in hospitals giving care to fewer people who will never be able to pay. In the places Medicaid has been expanded, uncompensated care costs in 2014 are estimated to be <a href="http://aspe.hhs.gov/health/reports/2015/MedicaidExpansion/ib_MedicaidExpansion.pdf">US$7.4 billion</a> (21%) lower than they otherwise would have been.</p>
<h2>The ongoing fight for health reform</h2>
<p>On July 1, less than a week after the recent Supreme Court decision, President Obama was in Tennessee to talk about what is next for health care reform in the United States. The president <a href="http://www.knoxnews.com/news/state/full-transcript-president-obamas-remarks-in-a-discussion-on-the-affordable-care-act_">said</a>:</p>
<blockquote>
<p>I’m hoping that what we can do is now focus on how we can make it even better. Because it’s not as if we’ve solved all the problems in our health care system. </p>
</blockquote>
<p>When the ACA passed in 2010, many progressives were severely disappointed. They felt that it did not do enough. The law introduces some delivery and payment reforms, but did little to directly tackle rising health care costs. Instead, the major focus was on expanding insurance coverage.</p>
<p>Future health reform efforts need to more fully address the fact that access to health insurance does not equal access to care. Not all doctors accept Medicaid, and large parts of the country have severe shortages of medical providers.</p>
<p>And for people who earn too much to qualify for Medicaid, high deductible plans might seem like an attractive option because their monthly premiums are low. However, high costs for care can make it harder for people to actually use their insurance.</p>
<p>We need to maintain the progress that has been made, with the uninsured rate dropping from 18% in mid-2013 to <a href="http://www.gallup.com/poll/184064/uninsured-rate-second-quarter.aspx">11.4% in mid-2015</a>. But it is also time to more fully confront that increasing access to care is not the only, or even the best, way to improve population health. When a major ACA program has faced financial challenges, the answer has been to take money from the part of the ACA that was intended to devote resources to preventative care.</p>
<p>Policymakers, scholars, and advocates need to focus more on public health, urban planning and initiatives that improve the conditions that people live, work and grow in (often called the social determinants of health). The ongoing fights over reform are an opportunity to move beyond thinking about health in terms of access to insurance and more toward finding ways to improve health overall.</p><img src="https://counter.theconversation.com/content/43902/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David K Jones received funding from the Commonwealth Fund to conduct research about King v. Burwell.</span></em></p>Meaningful insurance coverage, access to health care and costs were problems before King v Burwell and are still problems today.David K Jones, Assistant Professor of Health Policy and Management, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/438892015-06-27T02:16:52Z2015-06-27T02:16:52ZHappy about the Supreme Court’s ACA decision? Thank a law professor<p>The core of the Affordable Care Act (ACA) has now survived its second trip to the Supreme Court. </p>
<p>Chief Justice John Roberts wrote for the majority in <a href="http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf">King v Burwell</a>, holding that the federal government may provide subsidies for citizens to purchase health insurance on exchanges that were established by the federal government, rather than by their own state. </p>
<p>A ruling for the challengers (the “King” in King v Burwell) would not only have stopped the flow of subsidies to <a href="http://kff.org/interactive/king-v-burwell-effects/">6.4 million people</a> currently receiving them, but it would also have disrupted the functioning of the individual insurance markets in the 34 states that have not established their own exchanges. </p>
<p>Last week, I <a href="https://theconversation.com/how-law-professors-helped-the-supreme-court-understand-the-affordable-care-act-39982">wrote</a> about whether the justices’ understanding of the ACA had improved since its last trip to the Supreme Court in 2012, in <a href="https://www.law.cornell.edu/supremecourt/text/11-393">NFIB v Sebelius</a>. </p>
<p>And it looks like it has. Three years ago, it was clear from both the oral argument and opinions that the justices did not fully appreciate the health policy consequences of their ruling. </p>
<p>But in the oral argument in King v Burwell, the justices displayed a much more sophisticated understanding of the law. And, happily, that understanding is reflected in Chief Justice Roberts’ majority opinion – in part thanks to law professors.</p>
<h2>The court has a much stronger understanding of the ACA</h2>
<p>Not only is his opinion clear and persuasive, it also displays an appreciation of the health policy history behind the ACA and the relationships between its many moving parts. </p>
<p>The first five pages of the majority’s opinion explain simply and succinctly that the ACA has three interrelated and interdependent pieces – the individual mandate, the subsidies, and the guaranteed issue and community rating requirements. The guaranteed issue rule requires insurers to accept anyone, even those with preexisting conditions. The community rating requirement prevents insurers from charging sicker or older individuals premiums that are many times higher than what healthy individuals are charged. </p>
<p>These components depend on each other to ensure the stability of the act. You can’t remove one of these pieces without threatening the entire law. You need all three components to ensure a stable insurance marketplace. </p>
<p>And it is this understanding that underpins the majority opinion in King v Burwell. The court went so far as to detail the experiences of several states that had adopted only the guaranteed issue and community rating requirements but not the subsidies or individual mandate, explaining that they experienced economic “death spirals” in their insurance markets as a result. The opinion even held out Massachusetts as a poster child for a healthy insurance market, because in 2006 the state added an individual mandate and a tax subsidy to its already-enacted guaranteed issue and community rating requirements.</p>
<p>But Chief Justice Roberts didn’t stop there. His opinion details not only the way in which the main portions of the ACA interact broadly, but also the way in which interpretations of just four words of the act (an exchange “established by the state”) can reverberate throughout the entire law. </p>
<p>He emphasized and reiterated the importance of reading those four words of the statute in the context of the law as a whole. In his opinion, Roberts follows the ACA’s myriad definitions, cross-references and subsections to their logical conclusion. </p>
<p>And that diligent effort reveals something interesting about the challengers’ interpretation of the ACA. Under their strict interpretation of those four words, the rest of the act’s rules regarding federal exchanges become illogical. </p>
<p>Under the challengers’ reading of the law, few of the ACA’s finely specified requirements for how exchanges must operate would apply to federal exchanges at all. We would have federal exchanges, but no one could buy insurance on them – the exchanges would have no eligible customers. Chief Justice Roberts details many of these absurdities, which together render the statute ambiguous as written and amenable to the government’s saving construction.</p>
<p>The justices’ improved understanding of the ACA enabled the court to reach the result it did, upholding the subsidies on the federal insurance exchanges. It is precisely the court’s appreciation of the relationships between the various legal and economic parts of the act that led to its ruling for the government. </p>
<h2>Did law professors help educate the court?</h2>
<p>I had also <a href="https://theconversation.com/how-law-professors-helped-the-supreme-court-understand-the-affordable-care-act-39982">previously written</a> that one contributing factor to this improved understanding was the role of law professors, and particularly health law professors, as they wrote <a href="http://jhppl.dukejournals.org/content/40/3/589.full.pdf+html">law review</a> <a href="http://www.pennlawreview.com/debates/index.php?id=51">articles</a>, <a href="http://www.politico.com/magazine/story/2015/02/king-v-burwell-states-rights-115550.html#.VYxWEdLBwXB">op-eds</a>, <a href="http://www.scotusblog.com/2014/11/symposium-the-grant-in-king-obamacare-subsidies-as-textualisms-big-test/">blog</a> <a href="http://theincidentaleconomist.com/wordpress/respecting-the-states/">posts</a> and <a href="http://www.law.yale.edu/images/News_And_Events/14-114_bsac_Merrill.pdf">amicus</a> <a href="http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/14-114_amicus_resp_jalsa.authcheckdam.pdf">briefs</a> articulating the various health law implications of a ruling against the government. </p>
<p>In the oral argument it was clear that the justices were influenced by at least some of these arguments. Most notably, Justice Anthony Kennedy appeared very interested in the <a href="http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/14-114_amicus_resp_jalsa.authcheckdam.pdf">brief</a> arising out of arguments first made by Boston University Law School Professor Abigail Moncrieff, even posing a hypothetical question from that brief to the challengers.</p>
<p>Looking at Chief Justice Roberts’ majority opinion or Justice Antonin Scalia’s dissent, though, it is more difficult to say that either draws directly from any single law professor’s efforts. </p>
<p>That is partly because the opinion and dissents in King v Burwell simply cited directly the parts of the Affordable Care Act that are relevant to the case. The court also cited other cases that were referred to throughout the litigation.</p>
<h2>Justices read newspapers and blogs</h2>
<p>But it is difficult to escape the conclusion that health law professors’ efforts played a role in educating the justices about the deep relationships between the various provisions of the act. </p>
<p>As one example, Washington & Lee law Professor Tim Jost has been <a href="http://healthaffairs.org/blog/2012/07/18/tax-credits-in-federally-facilitated-exchanges-are-consistent-with-the-affordable-care-acts-language-and-history/">blogging</a> about this case since at least the summer of 2012. His recent <a href="http://business-law-review.law.miami.edu/wp-content/uploads/2015/02/Jost-Engstrand-Anomalies-in-the-ACA.pdf">article</a> listing “at least 50 provisions of the ACA [that] would be made anomalous, if not absurd” if the challengers had won is likely the most thorough treatment on the subject. </p>
<p>Lawyers, the justices and their clerks read blogs, newspapers and law reviews, but they rarely cite them directly. Still there are a few examples of this happening. </p>
<p>In an earlier decision in King v Burwell (before the Supreme Court decided to hear the case), a <a href="http://www.ca4.uscourts.gov/opinions/published/141158.p.pdf">concurring opinion</a> from a judge on the Fourth Circuit Court of Appeals cited two law review articles by Yale Law School Professor Abbe Gluck. Gluck went on to coauthor an amicus brief with University of Michigan Law School Professor Nicholas Bagley and others before the Supreme Court. Even if the final opinion doesn’t cite them, the work of scholars like these undoubtedly influenced the lawyers, Justices and clerks involved.</p>
<p>Chief Justice Roberts also looked to the work of economic scholars, citing an <a href="http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV5/14-114_amicus_resp_bes.authcheckdam.pdf">amicus brief</a> filed by a bipartisan group of 52 economists no less than three times. And he went on to cite additional papers by economists and analysts from the <a href="http://www.rand.org/pubs/research_reports/RR980.html">RAND Corporation</a> and <a href="http://www.urban.org/research/publication/implications-supreme-court-finding-plaintiff-king-vs-burwell-82-million-more-uninsured-and-35-higher-premiums">Urban Institute</a>, well-known organizations who have done important work in health policy for many years. He drew facts and statistics from these sources to support his argument that the consequences of a ruling for the challengers would be “calamitous.” </p>
<p>These “anomalous,” “absurd” and “calamitous” results that would have occurred if the challengers prevailed are precisely what render the statute amenable to the interpretation advanced by the government. </p>
<p>The result in King v Burwell is, in my view, something to celebrate. In the chief justice’s words: </p>
<blockquote>
<p>Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. </p>
</blockquote>
<p>And so, too, we should celebrate the deep understanding of the ACA that enabled the court to reach the right conclusion.</p><img src="https://counter.theconversation.com/content/43889/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Sachs does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Law professors were vocal in explaining how the different parts of the ACA worked together. It looks like the court was paying attention.Rachel Sachs, Academic Fellow, Petrie-Flom Center at Harvard Law School, Harvard UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/438902015-06-25T18:09:16Z2015-06-25T18:09:16ZObamacare victory shows failure of Scalia’s conservative revolution<p>By upholding a key provision of the Affordable Care Act (ACA) in King v Burwell, a majority of the US Supreme Court demonstrated that while the conservative revolution led by Justice Antonin Scalia may have had a strong impact on the court (and on the nation) it has not succeeded in winning over Justice Anthony Kennedy or Chief Justice John Roberts. Thus, while Justice Scalia has won many battles, he has not won the war. And in today’s King v Burwell decision he lost a major battle.</p>
<p>Justice Scalia has fought tirelessly both to limit the court’s focus in interpreting statutes (in other words, to look only at the letter of the law and not at the broader purpose of the legislation) and to limit the power of the national government. </p>
<p>King v Burwell seemed tailor-made to vindicate both goals. </p>
<p>The basic question in King v Burwell was whether the phrase an “exchange established by the state” included health care exchanges established by the federal government in states that refused to create their own. The plaintiffs in King v Burwell argued that “established by the State” means that health insurance subsidies could not be offered in states that had chosen to use the federal health insurance market instead of their own. This is, indeed, a very strict interpretation. </p>
<p>For Justice Scalia, the answer was easy: “established by the state” could not possibly mean “established by the state or the federal government.” Had Justice Scalia’s textualism prevailed, the decision would have gutted the ACA. Six million people in the 34 states where the federal government runs the insurance marketplace could have lost subsidies, and premiums could have skyrocketed.</p>
<p>But that didn’t happen. Instead, Chief Justice Roberts wrote an otherwise unremarkable opinion that invoked traditional principles of statutory interpretation and examined the meaning of the phrase “established by the state” in context.</p>
<p>The chief justice looked beyond the plain language of the clause at issue. He insisted that a court should interpret the language of the law in light of the overall legislative purpose. As the chief justice <a href="http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf">wrote</a>:</p>
<blockquote>
<p>Congress passed the Affordable Care Act to improve
health insurance markets, not to destroy them. If at all
possible, we must interpret the Act in a way that is consistent
with the former, and avoids the latter.</p>
</blockquote>
<p>And a contrary interpretation would have defeated the central purpose of the statute. In this approach, the court acts as Congress’s partner, not its censor.</p>
<p>In <a href="http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf">his dissent</a>, Justice Scalia was clearly furious that Chief Justice Roberts refused to endorse his revolutionary approach to statutory interpretation.</p>
<p>From Justice Scalia’s perspective, Chief Justice Roberts’ heresy was magnified by the fact that the chief justice cast the deciding vote to validate the Affordable Care Act in <a href="http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf">NFIB v Sebelius</a> in 2012, in which the legality of the individual mandate was upheld.</p>
<p>When Justice Scalia gets mad, he does not hold back. He has often adopted fairly sharp language in his dissents, but even by that standard, his dissent in King v Burwell is extraordinary in tone:</p>
<blockquote>
<p>normal rules of interpretation seem always to yield to the overriding principle of the present court: the Affordable Care Act must be saved. </p>
</blockquote>
<p>His vituperation reaches a crescendo in the conclusion where he snipes, “We should start calling this law SCOTUScare.”</p>
<p>One can debate the appropriate moniker for the ACA, and one can debate whether we should call this the Roberts Court or the Kennedy Court, but what is beyond debate is that this is not the Scalia Court.</p><img src="https://counter.theconversation.com/content/43890/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Schapiro does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Justice Scalia once again failed to win over either Justice Kennedy or Chief Justice Roberts, revealing he is losing the war over the Supreme Court’s heart.Robert Schapiro, Dean and Professor of Law , Emory UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/419422015-06-24T10:07:44Z2015-06-24T10:07:44ZWill states have time to react if the Supreme Court rules against the government in ACA case?<p>The United States Supreme Court is expected to issue an opinion by the end of this month in King v Burwell. At question is whether people using <a href="https://www.healthcare.gov/">the federal health insurance market</a> are eligible to receive health insurance subsidies.</p>
<p>Right now, people in the <a href="http://kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/">34 states</a> that use the federal health insurance exchange are eligible for subsidies to help make plans more affordable. But if the court rules against the government, over six million people could lose subsidies. That would make health insurance premiums <a href="http://kff.org/health-reform/press-release/new-analysis-details-impact-on-residents-in-different-states-if-the-u-s-supreme-court-rules-for-challengers-in-king-v-burwell/">for middle- and low-income people in states using HealthCare.gov much more expensive</a>. It could even push up premiums for people who do not use the subsidies. </p>
<p>President Obama has pointed out that Congress can fix the situation with a one-sentence bill, <a href="http://www.huffingtonpost.com/2015/01/30/republicans-obamacare-fix_n_6580716.html">which Republicans in Congress have said they will not do</a>. Republicans in Congress are <a href="http://www.politico.com/story/2015/06/house-gop-obamacare-ruling-response-meeting-119103.html">working on a number of plans</a> to temporarily extend subsidies should the court void those that currently exist. And Health and Human Services (HHS) Secretary Sylvia Mathews Burwell has publicly declared that the federal government has <a href="http://thehill.com/policy/healthcare/233677-no-back-up-plan-if-court-rules-against-obamacare-burwell-says">no contingency plan in place</a> should it lose the case. </p>
<p>While subsidies for plans offered through the federal exchange, HealthCare.gov, are at stake, subsidies for state-run exchanges are not. So one solution is for states using the federal exchange to simply create their own. </p>
<p>It might sound like a simple fix, but setting up an exchange takes much more than simply establishing a website with insurance plans on it. The process is politically and logistically complex, not to mention expensive. It took the states that already have their own exchanges years to contract with insurance companies, establish call centers and set up websites. And they were able to do so only with the financial assistance of hundreds of millions of federal grant dollars, which are no longer available. </p>
<p>So how are states preparing for the King v Burwell opinion and how quickly can they react if the Supreme Court ends subsidies for the federal exchange? </p>
<h2>Some states are going their own way</h2>
<p>Right now, 16 states and the District of Columbia have their own exchanges. The other 34 states use HealthCare.gov. </p>
<p>At least 11 states of the 34 that opted to use the federal exchange in lieu of creating a state marketplace have introduced legislation to <a href="http://www.ncsl.org/Documents/Health/Changes_in_Health_Exchange_Structure-2015-_Final2.pdf">establish their own insurance exchanges</a>. With a state exchange in place, eligible residents would continue to qualify for financial assistance to purchase Affordable Care Act (ACA)-mandated health insurance even if the Supreme Court rules against the government in King v Burwell. The federal government has approved draft contingency plans to create state-run exchanges for three states – Pennsylvania, Delaware and Arkansas – should the court invalidate the subsidies. </p>
<p>But some of these states are moving in the opposite direction. According to the National Association of State Legislatures, <a href="http://www.ncsl.org/Documents/Health/Changes_in_Health_Exchange_Structure-2015-_Final2.pdf">at least 11 other states</a> have introduced bills this session proposing to either eliminate their state marketplace or prohibit establishing a state exchange. In Arizona, for instance, Governor Doug Doucey signed a bill that forbids the state from setting up its own health insurance exchange. </p>
<h2>Just how bad is the timing of King v Burwell?</h2>
<p>But the states without exchanges today will not have years to come up with a fix. A court decision invalidating the federal subsidies would be effective within 25 days of being issued. </p>
<p>The court could issue a stay, which would delay when the ruling takes effect, but it is not clear how long that would need to be to give states adequate time to react. This is not a question of a few extra days or weeks.</p>
<p>Unfortunately, that is not the only timing problem for states. A decision is expected at the end of June, but the 2015 legislative session closes on or before June 30 2015 in the majority of states. Only eight of the legislatures in the states using the federal exchange have the authority to continue to meet <a href="http://acasignups.net/15/01/30/king-v-burwell-time-not-states-side">after June 30</a>, let alone to introduce and enact new legislation and put it into operation before the start of the next open enrollment period on November 1 2015. </p>
<p>In the <a href="http://www.ncsl.org/research/about-state-legislatures/special-sessions472.aspx">other 26 states</a>, calling a special session – a rare event in any context – is fraught with political complication.</p>
<p>Worse yet, the legislatures in at least four states – Texas, Nevada, Montana and North Dakota – <a href="http://www.ncsl.org/research/about-state-legislatures/legislative-session-length.aspx">only sit in odd-numbered years</a>. So any legislation creating exchanges in response to Burwell in those states is unlikely to move forward until at least 2017. </p>
<h2>Can the governor do it?</h2>
<p>If legislatures are out of session, is there any other path forward to create a state exchange? It may be possible for at least some of these states to create an exchange by an executive order from the governor. That means state exchanges could be established promptly and unilaterally, regardless of whether the state legislative session has closed. </p>
<p><a href="http://www.yalelawjournal.org/forum/no-good-options-picking-up-the-pieces-after-king-v-burwell">Three states</a> – Kentucky, New York and Rhode Island – established their state marketplaces by executive order. But they did so years ago. Using an executive order to create a state exchange might sidestep political or scheduling impediments, but it will not make the actual work of getting an exchange into working order easier.</p>
<h2>Can the insurance commissioner do it?</h2>
<p>Some states have insurance commissioners with sufficient constitutional and statutory authority to try to establish a state exchange. Indeed, Mississippi insurance commissioner Mike Chaney <a href="http://deepblue.lib.umich.edu/bitstream/handle/2027.42/108945/davidkj_1.pdf">tried to do exactly that</a> in 2013. Although HHS ultimately rejected Chaney’s exchange application, it was not because he lacked authority to establish a state marketplace. At least <a href="http://www.naic.org/documents/members_state_commissioners_elected_appointed.pdf">nine of the states</a> potentially affected in King v Burwell have independently elected insurance commissioners with this kind of authority. </p>
<p>If the end of June brings a decision to end subsidies on the federal health insurance exchange, state policymakers will be under incredible pressure to respond. Millions of Americans will lose their health insurance, and the market for individual insurance in many states is likely to collapse. </p>
<p>If the federal government cannot or will not step in, it is up the states to find a solution. But that is easier said than done.</p><img src="https://counter.theconversation.com/content/41942/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jennifer Oliva does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If the Supreme Court ends subsidies for the federal exchange, affected states could just establish their own exchanges, right? It’s a little more complicated than that.Jennifer Oliva, Clinical Professor of Law and Director, Legislative Advocacy Clinic , Penn StateLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/430442015-06-19T10:18:49Z2015-06-19T10:18:49ZCould the GOP face a backlash if they get their wish in Supreme Court ACA decision?<figure><img src="https://images.theconversation.com/files/85449/original/image-20150617-23232-1b2jgvl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Could a decision against the government in King v Burwell lead to a backlash against the GOP?</span> <span class="attribution"><span class="source">Gary Cameron/Reuters</span></span></figcaption></figure><p>Republicans have been fighting against the Affordable Care Act (ACA) ever since it became law. Now they may have problems if they see their long-elusive goal achieved. </p>
<p>Most Republicans are eagerly hoping that the US Supreme Court will put a nail in the coffin of the ACA. The court is due to issue its decision in King v Burwell on whether people living in the over 30 states using the federal insurance marketplace, HealthCare.gov (as opposed to state created exchanges), are eligible for health insurance subsidies.</p>
<p>The Republican Party wants the court to say the US Department of Treasury is wrong in allowing the subsidies. But the Republican Party has a problem: a presidential election is approaching, and a ruling against the government in King v Burwell could remove coverage from over <a href="http://www.nytimes.com/roomfordebate/2015/06/11/has-the-affordable-care-act-proved-its-worth/obamacare-expanded-coverage-but-costs-are-great">six million Americans</a> based largely on a <a href="http://www.nytimes.com/2015/05/26/us/politics/contested-words-in-affordable-care-act-may-have-been-left-by-mistake.html">mistaken legal technicality</a> in the law’s drafting.</p>
<p>If the Republicans get what they wish for in King v Burwell and millions of people lose health insurance subsidies, the GOP could face a backlash in the 2016 election, especially if it’s a close race.</p>
<h2>What happens if the subsidies go?</h2>
<p>The subsidies are a central element of the ACA, making it easier for middle-class and low-income people to afford the health insurance. Indeed, 85% of 2015 enrollees <a href="http://www.pressreader.com/usa/los-angeles-times/20150603/281599534108399/TextView">are receiving financial assistance</a> for the program. A ruling that voids the subsidies for people in states using the federal exchange could cause the premiums of other Americans to increase dramatically, given the <a href="http://www.nytimes.com/2015/06/18/us/politics/gop-is-wary-that-health-care-win-could-have-its-own-risks.html?_r=0">loss of these subsidies</a>. And a lot of these people vote. </p>
<p>Supporting a decision that leaves six million people without coverage and raises premiums for others could further the image of the Republican Party as an uncaring party of the wealthy.</p>
<p>It could even benefit Hillary Clinton, who has long supported federal health care. It could also cost the GOP female votes, since some of the most controversial components of the ACA are aimed at women, such as contraception. </p>
<h2>Energizing one side</h2>
<p>There is precedent for a US Supreme Court decision creating a backlash that helped one of our political parties. Most experts agree that the US Supreme Court’s endorsement of a right to abortion in Roe v Wade <a href="http://www.yalelawjournal.org/feature/before-and-after-roe-v-wade-new-questions-about-backlash">catalyzed a pro-life movement</a> that in turn energized a Republican Party base on social issues, and indeed caused some Independents to become Republicans. Certainly, the presidencies of Nixon, Reagan and both Bushes owe much to this effect, which is still ongoing as states are now passing numerous laws restricting abortions.</p>
<p>It is reasonable to suggest that the nation’s growing inequality and weakened middle class will be a <a href="http://www.latimes.com/nation/la-na-campaign-income-20150205-story.html#page=1">focus of the 2016 election</a>. </p>
<p>Though Obamacare’s rollout was imperfect and its poll ratings could be higher, those concerns could easily change if many Americans either lose their newly found health care or see their premiums skyrocket, should the Supreme Court rule against the government in King v Burwell. It is striking that Congress could fix the language issue in Obamacare quickly but for the <a href="http://www.bloomberg.com/politics/articles/2015-06-08/gop-swiftly-rejects-obama-s-one-sentence-fix-to-obamacare-if-supreme-court-voids-subsidies">GOP political opposition</a> and showmanship. </p>
<p>A pro-health care backlash isn’t an outlandish or unlikely result. Over <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/06/has-obamacare-really-signed-up-10-million-people/">10 million people</a>, for example, have signed up for Obamacare. And the Occupy movement certainly showed a grassroots concern about wealth issues. A Supreme Court ruling against the Obamacare subsidies could mobilize these vulnerable groups in ways that could be a nightmare for the GOP presidential candidate. </p>
<p>Now, abortion and Obamacare are very different issues. The vulnerable fetus is a strong political image. But a powerful narrative for the Democratic Party is that a great country does not abandon its own sick children and adults. Indeed, there seems little question that some who lose this health care <a href="http://www.nytimes.com/2015/03/08/opinion/sunday/what-ending-health-subsidies-means.html">will die</a>. </p>
<p>Even the Congressional Republicans have acknowledged that if they prevail in the case (and, by the way, this is the third challenge to the ACA to reach the US Supreme Court, in addition to <a href="http://www.washingtonpost.com/blogs/the-fix/wp/2014/03/21/the-house-has-voted-54-times-in-four-years-on-obamacare-heres-the-full-list/">over 50 votes</a> against the law in the House), they will have to figure out a <a href="http://www.vox.com/2015/6/8/8737595/gop-supreme-court-obamacare">substitute of some type</a> or face political repercussions. So far, the divided Republicans have not agreed on any <a href="http://www.nytimes.com/2015/02/08/us/health-law-case-poses-conundrum-for-republicans.html">alternative</a> that would last beyond the presidential election.</p>
<p>Thus, ironically, they are vulnerable to the same kind of backlash that they profited from because of Roe v Wade. Given recent poll results showing that the public does not trust the court much on such politicized issues, and since the Supreme Court is mostly Republican-appointed, this <a href="http://www.politico.com/story/2015/06/poll-supreme-court-obamacare-gay-marriage-118729.html">may also not bode well for the court</a> if they strike down this crucial part of Obamacare. It could add to a perception among the public that the court is acting for political rather than legal reasons.</p><img src="https://counter.theconversation.com/content/43044/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Kende is a member of the Democratic Party. </span></em></p>Supporting a decision that leaves six million people without coverage and raises premiums for others could further the image of the Republican Party as an uncaring party of the wealthy.Mark Kende, Professor of Law, Drake UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/412022015-06-18T10:04:46Z2015-06-18T10:04:46ZTime for an Obamacare checkup: how has it affected businesses so far?<figure><img src="https://images.theconversation.com/files/85414/original/image-20150617-23223-1snfur5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Does the ACA deserve a clean bill of health? </span> <span class="attribution"><span class="source">Flag stethoscope via www.shutterstock.com</span></span></figcaption></figure><p><em>This article is part of a series examining the Affordable Care Act as the Supreme Court considers a challenge that could imperil the law. You can read the rest of the series <a href="https://theconversation.com/us/topics/aca-checkup">here</a>.</em></p>
<p>The Affordable Care Act (ACA) was a significant bill, enacted into law in March 2010 with the goal of providing accessible and affordable health care for all Americans. Rising health care costs and insurance premiums – along with the significant number of uninsured individuals – created the <a href="http://www.usatoday.com/story/news/nation/2015/03/16/uninsured-rates-drop-sharply-under-obamacare/24852325/">impetus</a> for Congress to change the national health care system. </p>
<p><a href="http://www.heritage.org/research/projects/the-case-against-obamacare#ref4">Opponents</a> of the law argued that it – and specifically the employee mandate – would be very expensive for businesses by increasing their insurance costs and harm jobs growth.</p>
<p>Five years into the ACA’s existence, who’s right? How has the act affected businesses’ hiring practices and employee benefit packages? Have their costs increased significantly?</p>
<p>The Affordable Care Act has had some negative impact on businesses, but perhaps not as bad as some had feared, according to a survey I conducted among about 150 organizations earlier this year.</p>
<p>The vast majority of respondents complained of higher costs, but fewer than 40% reported it affected their hiring plans. About one-quarter indicated the law prompted them to change their benefit plans, for example by increasing cost-sharing with employees. </p>
<h2>ACA frustrations</h2>
<p>I’ve been responsible for employer-sponsored benefit plans for most of my career, most recently as chief financial officer of a small private higher education institution in New Hampshire. My interest in better understanding the impact of the ACA was generated by how it was affecting my organization as well as small companies for which I consult. </p>
<p>Unable to find research that analyzed the influence the ACA has had on benefit plans and hiring practices, I decided to conduct my own survey to collect these data while pursuing a doctorate in law and policy at Northeastern University. </p>
<p>Since the ACA’s enactment, I have noticed that many businesses were frustrated by the law. During informal discussions with employers, the many changes, clarifications and delays only solidified these frustrations. </p>
<p>One of the main ways the law affected organizations was that businesses with more than 50 full-time equivalent employees must offer health care benefits or face a fine, a provision that was supposed to take hold in 2014 but <a href="http://obamacarefacts.com/obamacare-employer-mandate/">was delayed</a> until finally taking effect on January 1 of this year. </p>
<p>Thus far, it hasn’t been clear what companies were actually doing in response to the law’s requirements. </p>
<h2>Examining the impact</h2>
<p>For more than 20 years, I have witnessed many changes to employee benefit programs, from shared responsibility to managed care through preferred provider organizations (PPOs) and health management organizations (HMOs). The ACA, in terms of its reach, far exceeded any of these. </p>
<p>The purpose of my study was to examine the impact of the ACA in terms of costs, health care benefits and hiring decisions. I conducted the survey in January and February – the first two months of the employer mandate. I distributed the survey to decision-makers (primarily chief financial officers and chief human resource officers) at universities, nonprofit groups and private companies who were responsible for the hiring practices, costs and benefit plans within each organization. </p>
<p>I collected data from 147 respondents, 61% of whom represented higher education, 25% were nonprofits, and the remaining 14% were private businesses in the construction, health care and government industries. Future studies will need to be completed to see if the results from this survey extend to other industries. Respondents were located throughout the US, but were mostly from the Midwest, East, and South. </p>
<h2>Complaints of higher costs</h2>
<p>Many employers have said they were worried about the ACA’s new fees and anticipated health care premium increases and the impact they would have on their businesses, even before the employer mandate took effect. To determine the true impact, I asked individuals I surveyed to describe how they have been affected. </p>
<p>About 70% of respondents said that they experienced higher costs directly related to the act, while 15% saw no increase. The rest said they weren’t sure. </p>
<p>Further analysis showed that 76% of nonprofit organizations and 67% of higher education organizations reported increased costs due to the mandate.</p>
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<a href="https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=506&fit=crop&dpr=1 754w, https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=506&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/85418/original/image-20150617-23259-14qq2vw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=506&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Paula Amato</span>, <span class="license">Author provided</span></span>
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<p>About 39% of respondents who said they experienced higher costs pointed to the Patient-Centered Outcomes Research Trust Fund fee – used to <a href="http://www.pcori.org">fund</a> comparative clinical effectiveness research – and the same share named a temporary reinsurance fee – <a href="http://www.imglobal.com/Libraries/ACA_PDFs/ACA-ReinsuranceFee-SelfFunded.sflb.ashx">intended</a> to stabilize insurers – as the main sources of the increase. About 29% blamed higher health care premiums, while about 9% cited other costs and fees, such as tax payments. Respondents were able to tick more than one box. </p>
<p>Survey participants weren’t asked to describe the extent of the impact, so further study will be needed in this area.</p>
<h2>Some reductions in hiring</h2>
<p>While most businesses reported higher costs as a result of the ACA, the impact on hiring was more mixed. About 37% of survey respondents said the law has affected their employment practices, either in terms of hiring or the balance between full-time and part-time. </p>
<p>About 12% chose to convert more full-time employees to part-time so that a majority were working 25 to 29 hours per week – 30 hours per week is the cutoff for full-time employees under the ACA. </p>
<p>While 71% of respondents reported hiring employees during the previous year, just 53% said they planned to add workers over the coming 12 months. It’s not clear from the survey, however, how much that reduction in planned hiring was due to the ACA versus other factors, such as the economy or industry-specific concerns.</p>
<p>Among those organizations that indicated the Affordable Care Act had influenced their hiring practices, 75% planned to cut back on hiring over the next 12 months compared with the prior year – 46% by reducing the number of new full-time employees and 39% by paring part-time hires.</p>
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<a href="https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=532&fit=crop&dpr=1 754w, https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=532&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/85466/original/image-20150618-23217-1cew0v5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=532&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Paula Amato</span>, <span class="license">Author provided</span></span>
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<h2>Changes to benefit plans</h2>
<p>Many opponents of the ACA have also argued that it would lead businesses to change the health insurance benefit plans they offer employees. Namely, companies would reduce the level of benefits they offer and require workers to share more of the cost. </p>
<p>According to my survey, 29% of respondents indicated that they had recently altered the level of benefits offered employees. Among those who changed their plans, 82% said they had done so because of the Affordable Care Act or the employee mandate specifically. The rest, however, said the decision was influenced by other factors. </p>
<p>Two alterations were cited most frequently by those who made changes: 29% increased the deductibles and 26% demanded higher employee co-pays. </p>
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<a href="https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/85471/original/image-20150618-23252-14ycrov.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Paula Amato</span>, <span class="license">Author provided</span></span>
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<p>Only 4% reported adding a health reimbursement account, and 16% reported other changes in benefits, such as adjusting other types of cost-sharing and increasing out-of-pocket expenses. </p>
<h2>A need for more analysis</h2>
<p>This survey offers an early look at how the ACA – the most significant change to US health care since Medicare – is affecting companies and other organizations. Analyzing and understanding that impact is important to provide guidance to regulators and lawmakers as they consider making changes to the ACA or pursue other avenues toward health care reform in the future. </p>
<p>More studies will be needed to better understand the impact and how it differs from industry to industry. Some businesses indicated that they were in the middle of discussions with unions regarding benefit and hiring changes, so it’ll be some time before the full impact can be known. In addition, the sample size in my study was fairly small. Larger surveys are needed to determine how pervasive these views are.</p>
<p>Still, these effects are notable, demonstrating that the ACA has hurt some companies and employees. The goal of the law was to <a href="http://www.dpc.senate.gov/healthreformbill/healthbill04.pdf">increase</a> insurance affordability and access, but the data collected in this study suggest it has not been fully achieved. </p>
<p>Further analysis, particularly after the mandate reaches the one-year mark next January, is needed to shine more light on these results and better determine the impact of the ACA – assuming the law is still in effect.</p><img src="https://counter.theconversation.com/content/41202/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paula A Amato is affiliated with New England College as the Senior Vice President and Chief Financial Officer. Mrs. Amato also does consulting for small businesses in NH relating to financial statements, budgets, strategic planning, legal review of contracts and leases. She does consulting under her own name.
Amato is a member of the IMA, NACUBO, EACUBO, and is a member of the Economic Development Committee in Henniker NH. </span></em></p>The Affordable Care Act was the most significant health care reform since Medicare. Have concerns that it would hurt businesses panned out?Paula A Amato, Doctorate Student, Northeastern UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/432942015-06-16T18:08:10Z2015-06-16T18:08:10ZYoung adults don’t understand health insurance basics – and that makes it hard to shop for a plan<figure><img src="https://images.theconversation.com/files/85103/original/image-20150615-5842-1g3b5ki.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">10% co-insurance? Huh?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-166600271/stock-photo-high-angle-view-of-an-young-brunette-working-at-her-office-desk-with-documents-and-laptop.html?src=xiNqFmnM_Va-h7Epd0uaXA-2-21">Young woman and laptop via www.shutterstock.com. </a></span></figcaption></figure><p>The health and success of the Affordable Care Act (ACA) depends on a lot of factors, and enrolling enough “<a href="http://younginvincibles.org/issues/health-care/">young invincibles</a>” in health insurance is one of them. </p>
<p>Under the ACA, insurers in the individual market have to cover everyone who wants to enroll. Insurers are also restricted in how much they can vary premiums based on age. That means that older people who have higher medical costs (on average) pay premiums lower than what might cover their care, and young people with lower medical costs (on average) pay premiums sometimes above their expected medical costs. So enrolling young people in health insurance helps keep costs stable. In addition, young adults have historically been highly represented when looking at the uninsured population.</p>
<p>And so millions of young adults were targeted for enrollment in the ACA’s health insurance marketplaces during the first open enrollment period in early 2014.</p>
<p>Enrolling in health insurance can be hard; choosing a health insurance plan that provides the amount of coverage you’ll likely need at the right cost is a difficult task. It’s challenging for consumers who have been through the process several times before, and likely even more so for young people who may be selecting from plan options for the first time. </p>
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<img alt="" src="https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=446&fit=crop&dpr=1 600w, https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=446&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=446&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=560&fit=crop&dpr=1 754w, https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=560&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/85137/original/image-20150616-5842-qlajdi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=560&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Choosing the right insurance can be tough.</span>
<span class="attribution"><span class="source">Mike Segar/Reuters</span></span>
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</figure>
<h2>What young adults want in a health insurance plan</h2>
<p>I led a research team at the University of Pennsylvania that examined the experience of young people when they enroll in health insurance on <a href="https://www.healthcare.gov/">HealthCare.gov</a>, the federal insurance marketplace. At the time of our study, Pennsylvania was one of 34 states that did not have a state-run health insurance exchange. If you don’t have employer-sponsored health insurance, or are too old to remain on a parent’s health insurance, in states like Pennsylvania you have the opportunity to go on HealthCare.gov to choose a plan. </p>
<p>We <a href="http://dx.doi.org/10.1016/j.jadohealth.2015.04.017">studied</a> 33 highly educated young adults aged 19-30 in Philadelphia during the first year of HealthCare.gov. Some of the people we followed had health insurance at the beginning of the study, but wanted to look at insurance options on HealthCare.gov because they’d heard from friends that they might get better, cheaper coverage on the marketplace. In fact, one of the findings of our study is that young adults were often not only shopping for coverage on HealthCare.gov, but also comparing those plans to options outside the marketplace, like plans offered by schools, employers or their parents’ health insurance. </p>
<p>From January to March of 2014, we observed the young adults as they shopped for insurance plans on HealthCare.gov, asking them to “think aloud” to capture their reactions in real time. We then interviewed participants about their thoughts on health insurance in general and what they saw on HealthCare.gov.</p>
<p>One said:</p>
<blockquote>
<p>I just wasn’t able to comprehend all of the things on the Healthcare.gov – I got confused. I’m not a person to give up, not at all – but with the system, I just wanted to quit.</p>
</blockquote>
<p>The young adults we followed were looking for an affordable health insurance option. They placed a lot of emphasis on the monthly premium cost and the amount of plan deductible (though see below on their confusion about what deductible actually means). </p>
<p>Most considered a monthly premium of over US$100 unaffordable, yet the least expensive plan without tax credits in Philadelphia was closer to $200 per month. Luckily several of the participants qualified for tax credits, which brought their premiums as low as $0.13 per month. Others, however, did not qualify for any discounts and chose to remain uninsured, stating that they could not afford any of the options, even though they may have to pay a <a href="https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/">penalty</a> for not having insurance. </p>
<p>One said:</p>
<blockquote>
<p>I will just pay whatever that tax consequence is, $95 or something, right?, because $200 a month right now is way too much. I don’t know how my friends with student loans do it.</p>
</blockquote>
<p>Topping the list of coverage benefits they wanted was access to affordable primary and preventative care. One participant said:</p>
<blockquote>
<p>I would really like to get a physical to just see where I’m at. I haven’t been to a doctor in a long time, but I wanna see if there’s anything I should be concerned about – blood pressure, cholesterol… </p>
</blockquote>
<p>Interestingly, however, many participants in the study did not realize that preventive care was included in all plans at no additional cost under the ACA. Hence, one of the <a href="http://dx.doi.org/0.7326/L14-0287">recommendations</a> coming out of this study was that plans should emphasize the availability of no-cost preventive care, like birth control and routine visits, especially in efforts targeting enrollment of young adults.</p>
<h2>‘What’s a deductible?’ - young adults aren’t familiar with insurance terms</h2>
<p>As one of the young adults was looking at his plan options, he said:</p>
<blockquote>
<p>This plan is $20 to see a primary doctor, and this one is 10% coinsurance after deductible – and I just don’t understand that. What is the deductible to see my primary doctor? </p>
</blockquote>
<p>It became clear early in the study that one of the biggest challenges the young people faced in choosing a plan was their lack of familiarity with basic health insurance terms like “<a href="https://www.healthcare.gov/glossary/deductible/">deductible</a>” or “<a href="https://www.healthcare.gov/glossary/co-insurance/">coinsurance</a>.” </p>
<p>Only half of the participants could correctly define “deductible,” while less than one in five could define “coinsurance.” These concepts are fundamental to understand for anyone who hopes to make an informed health insurance choice. And misunderstanding these terms can lead to a rude awakening after purchasing and trying to use the insurance. This happened to one participant who said:</p>
<blockquote>
<p>Before I signed up for it, I didn’t really know what deductible meant. I thought it was saying it would cover $6,000 worth of stuff, and anything over that, then I would have to pay the rest. But I found out it was the other way around.</p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/85140/original/image-20150616-5854-1h53um8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Preventative care is included.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-189550076/stock-photo-retro-style-image-of-a-doctor-with-a-stethoscope-holding-the-disk-towards-the-camera-in-a-medical.html?src=csl_recent_image-1">stethoscope via www.shutterstock.com.</a></span>
</figcaption>
</figure>
<h2>More support needed for young beneficiaries</h2>
<p>While this is a small study that was conducted in a single city and state that uses healthcare.gov, it shows that even the highly educated young people in our study had difficulty making health insurance choices. However, our findings on the confusion over health insurance terms have also been demonstrated in <a href="http://dx.doi.org/10.1377/hlthaff.2013.0934">studies</a> of consumers across a variety of demographic <a href="http://dx.doi.org/10.1177/1077558713505327">groups</a>. Other researchers have also verified, mostly in experimental settings, that people have a <a href="http://dx.doi.org/10.1016/j.jhealeco.2013.04.004">hard time</a> making <a href="http://dx.doi.org/10.1016/j.jhealeco.2010.12.008">optimal health insurance choices</a>, even after ensuring that they understand basic health insurance concepts or conducting their insurance experiments in a population of <a href="http://dx.doi.org/10.1371/journal.pone.0081521">MBA students</a>. </p>
<p>Their findings and ours help describe how young adults navigate the insurance selection process, and point to many areas where consumers could be better supported in the health insurance selection process. </p>
<p>In the area of health insurance literacy, tools to help consumers could be as simple as providing pop-up explanations of key terms, like “deductible,” when you hover your cursor over the term on the screen. Other tools might include total cost estimators that do the math for the consumer. This could provide an estimate that takes into account a plan’s deductible, coinsurance, copay and premium amounts, as well as how often that person predicts they’ll use their insurance (such as how many times they visit the doctor and how many medications they take). </p>
<p>We are sharing our findings with those getting HealthCare.gov and the other state-run health insurance marketplaces ready for the next <a href="https://www.healthcare.gov/marketplace-deadlines/2016/">open enrollment</a> period in November 2015.</p><img src="https://counter.theconversation.com/content/43294/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charlene Wong receives funding from the Leonard Davis Institute Health Insurance Exchange Research Group and the Robert Wood Johnson Foundation Clinical Scholars Program, both at the University of Pennsylvania.
</span></em></p>Choosing health insurance that provides the amount of coverage you’ll likely need at the right cost is a difficult task, especially if it’s your first time picking a plan.Charlene Wong, Clinical scholar and pediatrician, University of PennsylvaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/399822015-06-16T10:07:49Z2015-06-16T10:07:49ZHow law professors helped the Supreme Court understand the Affordable Care Act<figure><img src="https://images.theconversation.com/files/79170/original/image-20150423-25569-flh4zi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Are health law professors educating the Supreme Court?</span> <span class="attribution"><span class="source">Joshua Roberts/Reuters</span></span></figcaption></figure><p>In March, the Supreme Court heard oral arguments in King v Burwell, a case that could broadly impact the functioning of the Affordable Care Act (ACA). The central question in King v Burwell is whether the federal government may provide subsidies for citizens to purchase health insurance on exchanges that were established by the federal government, rather than by their own state. If the court rules for the government, these subsidies will remain in place. If the court rules against the government, subsidies may no longer be provided to people living in states that have not established their own exchanges.</p>
<p>A decision is expected by the end of June, and a ruling against the government could harm not only the <a href="http://kff.org/interactive/king-v-burwell-effects/">6.4 million people</a> receiving these subsidies, but also the individual insurance markets in the 34 states that have not established their own exchanges. These markets would likely descend into an actuarial <a href="http://www.newrepublic.com/article/120233/king-v-burwell-how-supreme-court-could-wreck-obamacare-states">“death spiral,”</a> in which healthier people exit the market in cycles, leaving sicker patients to pay ever-higher premiums.</p>
<p>This isn’t the first time the Supreme Court has heard a case that poses a serious challenge to the ACA. Three years ago, in NFIB v Sebelius, the court upheld the individual mandate (the requirement that individuals carry insurance) while striking down the mandatory Medicaid expansion. That rendered the Medicaid expansion optional for states. Now, nearly three years after the NFIB ruling, <a href="http://kff.org/health-reform/slide/current-status-of-the-medicaid-expansion-decision/">just over half</a> of the states have expanded Medicaid, but many low-income Americans in much of the South and Great Plains still lack access to coverage.</p>
<p>Both NFIB and King explore the relationship between the federal government and the states and consider when and how the federal government may encourage or require the states to act in certain ways.</p>
<p>But one key difference between the cases is how well the nine justices of the Supreme Court understand the ACA. </p>
<p>Three years ago, it was clear from both the oral argument and opinions in NFIB that the justices did not fully appreciate the health policy consequences of their ruling. </p>
<p>Yet in the oral argument in King, the justices displayed a much more sophisticated understanding of the law, and the opinions in King will likely display that understanding. </p>
<p>A key fact driving this changed understanding is the way in which law professors contributed to the case, both in the public discourse and more formally before the court.</p>
<h2>What were law professors saying about NFIB in 2012?</h2>
<p>Oral arguments are not the only place the justices get information about a case. They also receive briefs from both parties, as well as amicus briefs (briefs filed by groups who are not involved in the case but have an interest in the outcome). And, like other Americans, they (and their clerks) read newspapers and magazines and blogs. </p>
<p>When the justices took up the NFIB case in 2012, there was an enormous amount of media coverage. It was the first real challenge to the ACA, and commentators were eager to weigh in. Notably, many law professors and other academics made their voices heard in the case, writing <a href="http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/briefs/11-393_petitioneramcufrc-and27housemembers.authcheckdam.pdf">amicus</a> <a href="http://sblog.s3.amazonaws.com/wp-content/uploads/2012/01/NFIB-v-Sebelius-Obamacare-severability.pdf">briefs</a> before the court or <a href="http://www.yalelawjournal.org/forum/bad-news-for-mail-robbers-the-obvious-constitutionality-of-health-care-reform">writing</a> <a href="http://www.yalelawjournal.org/forum/bad-news-for-professor-koppelman-the-incidental-unconstitutionality-of-the-individual-mandate">articles</a> or <a href="http://www.scotusblog.com/2011/08/will-the-supreme-court-give-congress-an-unlimited-mandate-for-mandates/">blog</a> <a href="http://www.scotusblog.com/2011/08/free-riding-on-benevolence-why-the-mandate-is-within-the-scope-of-the-commerce-power/">posts</a> explaining their views. </p>
<p>But the most influential voices were from scholars of constitutional law, rather than from scholars of health law and policy. And in the oral arguments and the subsequent opinions in the case, it was clear that the court had not fully understood the way the ACA worked. They understood the essential idea that the main portions of the act are interrelated, but they did not appreciate the details of how that relationship functioned. </p>
<p>The way the court handled the Medicaid expansion illustrates this well. When the court made the expansion optional, it understood that some states would choose to expand their Medicaid programs, and that others would not. But it wasn’t that simple. There were a whole range of additional consequences that the court did not appear to appreciate.</p>
<p>The ACA originally envisioned that the Medicaid expansion would extend coverage to all individuals making less than 138% of the federal poverty level. As a result, the ACA did not exempt people making less than that amount from the individual mandate, and it made subsidies on the exchanges available only to people making over 100% of the poverty level. </p>
<p>So the Supreme Court’s decision harmed individuals making less than the poverty level in states that chose not to adopt the Medicaid expansion: they were subject to the individual mandate, but they were not eligible to receive subsidies, even though they needed them the most. The secretary of Health and Human Services had to issue a hardship exemption from the individual mandate for people in states that had not expanded Medicaid who fell into this gap.</p>
<p>Would a more complete understanding of the ACA have led to a different outcome in NFIB? Probably not, given the nature of the legal questions involved. But it still could have made a difference. A better understanding might have changed some justices’ votes, particularly in the context of the Medicaid expansion. And it would more likely have changed some of the reasoning in the opinions, perhaps in a way that would have offered a sense of how the court understood the ACA that could have guided the parties in King v Burwell.</p>
<h2>Do the justices understand what is at stake in King v Burwell?</h2>
<p>The <a href="http://www.oyez.org/cases/2010-2019/2014/2014_14_114">oral argument</a> before the court was different this time around. Some justices displayed a much more sophisticated understanding of how King could affect the ACA, showing that they had developed a more detailed understanding of how the different parts of the ACA are interrelated than they had in 2012. </p>
<p>For example, Justice Sotomayor and Justice Breyer referred to the Medicaid “maintenance of effort” problem. Essentially, the ACA requires the states to maintain their existing Medicaid eligibility and enrollment standards until “an exchange established by the State” is operational. States can’t kick people off the Medicaid rolls if there’s nowhere for them to go. </p>
<p>But King hinges on the interpretation of precisely this key phrase (“established by the State”), at another of its locations within the ACA. If the petitioners prevail, then the states that have not created their own exchanges will be held indefinitely to the eligibility rules they had in 2010. If they lowered their standards, they would suddenly be at risk for losing all of their Medicaid funding.</p>
<p>Given the nature of the legal questions involved, the fact that the justices have a more accurate understanding of the potential implications of a ruling for the petitioners in this case makes them more likely to decide it correctly, in the government’s favor. </p>
<h2>How did health law professors help?</h2>
<p>Health law scholars played a much larger role in educating the justices about the consequences of their ruling this time around. They published articles in the <a href="http://www.nejm.org/doi/full/10.1056/NEJMp1414191">New England Journal of Medicine</a>, articles in more <a href="http://www.pennlawreview.com/debates/index.php?id=51">traditional</a> <a href="http://business-law-review.law.miami.edu/wp-content/uploads/2015/02/Jost-Engstrand-Anomalies-in-the-ACA.pdf">law</a> <a href="http://jhppl.dukejournals.org/content/early/2014/11/21/03616878-2867881.full.pdf">reviews</a>, op-eds in prominent <a href="http://www.nytimes.com/2015/03/02/opinion/in-king-v-burwell-the-plaintiffs-misread-obamacare.html?hp&action=click&pgtype=Homepage&module=c-column-top-span-region&region=c-column-top-span-region&WT.nav=c-column-top-span-region&_r=0">media</a> <a href="http://www.politico.com/magazine/story/2015/02/king-v-burwell-states-rights-115550.html#.VTFOnNzF_To">outlets</a>, extensive <a href="http://www.scotusblog.com/2014/11/symposium-the-grant-in-king-obamacare-subsidies-as-textualisms-big-test/">blog</a> <a href="http://theincidentaleconomist.com/wordpress/respecting-the-states/">posts</a>, and they even submitted formal <a href="http://www.law.yale.edu/images/News_And_Events/14-114_bsac_Merrill.pdf">amicus</a> <a href="http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/14-114_amicus_resp_jalsa.authcheckdam.pdf">briefs</a> before the court itself. </p>
<p>Some of this increase in law professor involvement is because today there are simply more available avenues for engagement than there were even in 2012. However, some more traditional avenues are also taking on new forms.</p>
<p>For instance, law professors have always engaged in scholarly research and writing in journals and law reviews. But the idea of using such scholarship to promote a particular view of cases that are before the Supreme Court, rather than to analyze cases that have already been decided, is relatively new.</p>
<p>There are serious debates to be had about the proper role of law professors as advocates, rather than as scholars. Law professors have had and will continue to have discussions about whether and under what circumstances they should participate as <a href="http://repository.law.umich.edu/cgi/viewcontent.cgi?article=2514&context=articles">advocates in the merits</a> of a case itself, or even <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1959936">sign onto an amicus brief</a>. </p>
<p>But the idea that law professors should act as scholars and educators, in a way that improves the justices’ understanding of the composition of the very laws before them, has the potential to raise the level of debate before the court. And in King v Burwell, the justices’ improved understanding of the ACA is likely to lead to a more informed result than the ones reached in NFIB.</p><img src="https://counter.theconversation.com/content/39982/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Sachs does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the oral argument in King v Burwell, the justices displayed a much more sophisticated understanding of the Affordable Care Act.Rachel Sachs, Academic Fellow, Petrie-Flom Center at Harvard Law School, Harvard UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/416572015-06-15T10:08:14Z2015-06-15T10:08:14ZHealth care cost-sharing prompts consumers to make big cuts in medical spending<figure><img src="https://images.theconversation.com/files/84880/original/image-20150612-1441-r1ljkj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Consumers appear to cut their medical care spending when deductibles go up, even when it doesn't make any sense. </span> <span class="attribution"><span class="source">Bandaid dollar via www.shutterstock.com</span></span></figcaption></figure><p>Is that surgery really worth it? Do I really value that cancer screening? Is that extra imaging service necessary? </p>
<p>These are the kinds of questions consumers ask themselves when their insurance plans require higher cost-sharing for medical services. This is a new reality in the US health care system as large employers offering coverage <a href="http://www.towerswatson.com/en-US/Insights/IC-Types/Survey-Research-Results/2014/05/full-report-towers-watson-nbgh-2013-2014-employer-survey-on-purchasing-value-in-health-care">have moved aggressively</a> toward less generous, high-deductible insurance offerings. </p>
<p>This shift was accelerated by the “<a href="http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=99">Cadillac Tax</a>” provision contained in the Affordable Care Act (ACA), which, starting in 2018, places an excise tax on employers offering insurance plans that cover very high levels of medical spending. Further, many of the consumers <a href="http://aspe.hhs.gov/health/reports/2015/marketplaceenrollment/jan2015/ib_2015jan_enrollment.pdf">enrolling in the public state exchanges</a> created under the ACA have enrolled in lower- coverage financial plans that cover an average of 60% (bronze) or 70% (silver) of medical expenditures, similar to typical high-deductible coverage. </p>
<p>Though these policies are in part motivated by the goverment’s need to reduce its share of total health care spending, they are also driven by the expectation that they will lead consumers to use higher-value, lower-cost medical services. </p>
<p>In my <a href="http://eml.berkeley.edu/%7Ebhandel/wp/BCHK.pdf">recent research</a> with Zarek Brot-Goldberg, Amitabh Chandra, and Jon Kolstad, we dug into the mechanisms for how and why consumers reduce medical spending when faced with higher cost-sharing. </p>
<p>To do this, we studied the medical claims and medical spending of more than 150,000 employees and dependents from one large firm that moved everyone from an insurance plan that provided completely free health care to a <a href="https://theconversation.com/low-premiums-yet-big-bills-why-high-deductible-health-plans-need-reform-34114">high-deductible plan</a> covering 78% of medical spending on average. </p>
<p>During the switch, the in-network providers that consumers could access and the services covered remained the same. As a result, this switch presented an excellent opportunity to assess in detail how consumers respond to markedly increased cost-sharing. </p>
<p>Primarily, we wanted to know whether employees would reduce their medical spending as a result of the change and, if so, by how much. Further, we hoped to learn where specifically they’d cut back. Would they spend less on nonessential services or reduce spending across the board? Would they try to find cheaper sources of health care? Do some employees cut more than others? Do employees correctly perceive the true marginal price of care in a complex insurance contract?</p>
<h2>Health care spending plunges</h2>
<p>We first established that increased cost-sharing does reduce medical spending at the firm. Age- and inflation-adjusted medical spending dropped by 19% – from a base of approximately US$750 million in spending – when employees switched to high-deductible coverage.</p>
<p>Strikingly, many of the spending reductions come from the sickest employees. The sickest 25% (based on prior diagnoses each year) reduced spending by one-quarter after shifting coverage. This is especially notable, and somewhat surprising, since these employees earn relatively high incomes and their maximum out-of-pocket payment in high-deductible coverage for the calendar year was approximately $6,500 for a family. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=422&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=422&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=422&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=531&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=531&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84447/original/image-20150609-10675-163gpa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=531&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This graph shows how much employees reduced their medical spending after their plans changed (red line). Consumers are grouped into sickness “quartiles”. The top one represents consumers predicted to be sickest, while the bottom line represents the healthiest.</span>
<span class="attribution"><span class="source">Brot-Goldberg, Chandra, Handel and Kolstad</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>How did consumers reduce spending? A detailed data analysis reveals that medical prices did not go down. Further, we show that consumers did not price-shop after the switch – that is, they did not move toward cheaper providers, for example, when they were going to undergo a specific procedure. </p>
<p>It turns out that all spending reductions were directly linked to quantity reductions: consumers just consumed less medical care. </p>
<h2>Cuts across the board</h2>
<p>Importantly, it didn’t seem like consumers were particularly choosy about what kind of health care they cut: consumers appeared to reduce consumption across a range of medical services, from low to high value.</p>
<p>For example, quantity reductions led to a 22% drop in spending on imaging services (such as MRIs or CT Scans), some of which are <a href="http://www.healthimaging.com/topics/healthcare-economics/defensive-medicine-driving-wasteful-imaging">likely unnecessary</a>. However, consumers also reduced how many preventive health services they used – which policymakers typically believe are underutilized – by 16%. </p>
<p>The cuts were across the board. Spending on mental health care fell 8%, inpatient and outpatient hospital services declined 14% and 17%, respectively, drug purchases dropped 20%, and emergency room services plunged 27%. Of the top 30 medical procedures (by revenue) that we investigated, we found that consumers reduced spending for 23 of them. </p>
<p>Simply put, consumers did not look for cheaper services but consumed less medical care, and did so across almost the entire range of medical services.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=513&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=513&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=513&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=645&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=645&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84928/original/image-20150613-1461-1l217ns.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=645&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This chart shows how much employees cut their spending on a range of medical services from 2012 to 2013.</span>
<span class="attribution"><span class="source">Brot-Goldberg, Chandra, Handel and Kolstad</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Insurance price misperceptions</h2>
<p>One possible reason for why these sick, relatively high-income consumers reduced potentially valuable medical spending is that they perceived the marginal price of their medical care to be higher than it actually is. </p>
<p>Take the example of a consumer who knows he/she is quite sick entering the year and expects to spend a lot on health care. That consumer should not worry about the deductible and cost-sharing when making medical decisions early in the year because he/she knows that by the following January, all medical care used after passing the plan’s out-of-pocket limit will be free. Thus, the <em>true marginal price</em> of health care for this predictably sick consumer is close to $0, no matter how high the deductible is, so care consumed early in the year is essentially free as well. </p>
<p>But we found that these consumers substantially reduced spending early in the year when under the deductible, but once they passed it spent more. In other words, many consumers whose <em>true marginal price</em> for care throughout the year is essentially zero because of their impending high spending don’t treat incremental care as free when under the deductible. Instead, they respond as if the price of care under the deductible is the relevant price, despite the fact that they will spend that money during the year regardless. </p>
<p>This suggests that they misperceive their own health risks, misperceive how much medical care costs or don’t understand how the high-deductible insurance contract actually works. Similar consumer price misperceptions are also documented in <a href="http://web.stanford.edu/%7Eleinav/pubs/QJE2015.pdf">Medicare Part D</a>, <a href="http://people.bu.edu/ito/Ito_Marginal_Average_AER.pdf">electricity markets</a> and <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2330426">broadband markets</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=446&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=446&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=446&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=561&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=561&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84449/original/image-20150609-10675-nkujoy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=561&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This chart studies how consumers reduce spending depending on different financial features of a high-deductible insurance plan. Consumers under the deductible contribute the most to reduced medical spending in any given month, while those who have passed the deductible and are either (i) paying coinsurance or (ii) reached their out-of-pocket cap reduce spending by less.</span>
<span class="attribution"><span class="source">Brot-Goldberg, Chandra, Handel and Kolstad</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>What this means for reform efforts</h2>
<p>Giving consumers direct incentives to think about their health care spending is a cornerstone of health reform in the US and plays a large role in several national health systems around the world, such as in France. </p>
<p>An important prerequisite for these reforms to be successful is that consumers, who may or may not be making medical decisions in conjunction with physicians, understand the costs and benefits of different health care services. Our evidence suggests that consumers don’t seem to be responding to increased cost-sharing with nuanced expertise and instead reduce consumption across the range of medical services, some valuable and some likely wasteful. </p>
<p>Additionally, they reduce care heavily when sick and under the deductible, even when their true marginal price of care is very low. </p>
<p>Thus, while increased consumer cost-sharing can be an effective instrument for reducing health care spending, it may be a blunt instrument for encouraging higher value medical spending, especially relative to supply-side interventions that target physician incentives or interventions that reduce the use of high-cost low-value medical technologies. </p>
<p>As health reform pushes forward, policymakers will need to recognize the limits of consumer cost-sharing policies and focus more on how to appropriately incentivize providers to deliver high-value, low-cost care.</p><img src="https://counter.theconversation.com/content/41657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ben Handel is affiliated with University of California at Berkeley, Microsoft Research, the National Bureau of Economic Research, and Picwell. He has also received research funding from the National Science Foundation.</span></em></p>Switching to a high-deductible plan leads people to reduce medical spending even when it doesn’t make any sense.Ben Handel, Assistant Professor of Economics, University of California, BerkeleyLicensed as Creative Commons – attribution, no derivatives.