Friday, August 8, 2014

The popularity of the Affordable Care Act

We keep hearing the argument at the end of every news program about the Affordable Care Act (ACA) that the ACA remains unpopular with a majority of Americans.  This fuels the arguments on the political right that repealing the law is going with the “will of the people.”  In March of 2014, the Kaiser Health Tracking Poll found that 59% of Americans want Congress to keep the law and work to improve the law or keep it as is, while only 29% of Americans want Congress to either repeal the law or repeal the law and replace with a Republican alternative.  Another poll, earlier in March, found that 71% of Americans wanting to keep the law while 28% said they wanted to eliminate it.  While this poll came out in March, the favorability of the law (38/46) is almost the same as what was found in June (39/45). 

So, what aspects of the law are unpopular?   The Kaiser Poll found the following percentages of people favorable to each aspect of the law:


Total Public
Democrat
Independent
Republican
Extension of dependent coverage
80
87
76
76
Close Medicare “doughnut hole”
79
89
75
73
Subsidy assistance to individuals
77
89
74
65
Eliminate out of pocket expenses for preventive services
77
81
76
75
Medicaid Expansion
74
89
69
62
Guaranteed issue*
70
74
70
69
Medical loss ratio**
62
68
64
54
Increase Medicare payroll tax on upper income earners
56
77
54
33
Individual mandate/penalty
35
56
31
16

*- prohibits insurance companies from denying coverage based on health status, or in other words, no denial of coverage for pre-existing conditions
**- requires insurance companies to give their customers a rebate if they spend too little money on services and too much on administration and profits

Looked at it this way, it’s pretty easy to see where the unpopularity of the law comes from.  The unpopularity of the law stems from the unpopularity of the individual mandate and the penalty.  As Kaiser points out, the unpopularity of the law also comes from another source.  The unpopularity of the law also stems from people being ignorant of the law and what it includes.  While nearly 80% of respondents know that the individual mandate is included in the law, no other provision is as widely known.  71% of respondents knew that extension of dependent coverage was included in the law.  63% knew that subsidies would be provided to individuals.  60% knew about Medicaid expansion in the law.   Somehow only 54% knew that the prohibition on denying individuals on pre-existing conditions were included.  Fewer than 50% of respondents knew about closing the Medicare doughnut hole (40%), eliminating out-of-pocket expenses for preventive services (43%), the medical loss ratio (44%), and the increase on Medicare payroll tax (46%).   Meanwhile, 46% of respondents thought that the ACA would allow undocumented immigrants to receive financial help from the government to buy health insurance and only a third answered correctly that it does not.  Additionally, over a third of respondents believe the law establishes a panel to make decisions on end-of-life care (the so-called death panels), nearly a quarter of respondents were unsure. 

It’s a little odd that the unpopularity of the individual mandate could doom the law so much.  The reasons for opposing the law were quite diverse, Kaiser found, two of the most popular reasons for opposing the law were government overreach and opposition to the individual mandate.  17% of those who oppose the law cited the opposition of the individual mandate for their reason to oppose the law while 10% of those who oppose the law stated that their reason was government overreach.  Theoretically, those opposing the individual mandate would want to keep the more popular reforms but get rid of the individual mandate.  Of course, the individual mandate makes the popular reforms possible and helps deal with the number one reason for opposition to the law.  23% of those opposed to the law stated their reason for opposition was cost concerns.

In order to end the denial of health care coverage for those with pre-existing conditions and to keep the premiums in line with those without pre-existing conditions, insurance companies needed to increase their pool of applicants.   Another reform not mentioned above, the end of incision, or caps on insurance spending were predicated on the individual mandate being implemented.  If we just ended the pre-existing discrimination and individual caps, those enrolling in health insurance would be older people and people with pre-existing medical conditions.  Healthier people, meanwhile, could now afford to wait until they desperately needed coverage to sign up.  To cover for this, insurance companies would raise premiums.  As the Center for Budget and Policy Priorities notes the resulting premium spike would further discourage healthier people from getting health care coverage.  This would raise premiums even higher. 

So, to avoid all of this, the ACA has an individual mandate.  Encouraging healthy people to sign up for the health care coverage will ensure that the mix of people signing up for health insurance is a mix of healthy and non-healthy and keeping costs down.  Jonathan Gruber estimated that the removing the mandate would raise the individual premiums in the health insurance exchanges by 40 percent.  To balance the cost of the individual mandate to those who don’t make much money, there was the expansion of Medicaid (the mandatory portion was struck down by the Supreme Court) and subsidies for those who did not qualify for Medicaid for those making up to $88,000 for a family of four who don’t receive coverage through their employer.  Without the individual mandate, the subsidies probably disappear, the expansion of Medicaid is unlikely to happen, premiums would increase by 40%, and most of the popular reforms would not stick. 

Would talking about the law and educating people make the law more popular?  I remain skeptical.  One major fallacy that I often see in political circles is the idea that if we just talk about the issues, argue in a convincing way, frame the issues in a different way, etc. will convince large swaths of people to whatever your political persuasion is.  I blame Aaron Sorkin.  President Barack Obama, repeatedly on the campaign trail, brought up closing the Medicare doughnut hole, ending the denial of coverage based on pre-existing conditions, and ending out-of-pocket expenses for preventive services.  If people aren’t aware that they were part of the law, then they weren’t paying attention.  Conversely, Rush Limbaugh and other conservative commentators brought up the lie that the ACA was the biggest tax increase ever but many Americans could not name that the Medicare payroll tax was increasing on higher income earners.   I’m not really sure what can be done if your goal is to make the law more popular.  Perhaps as more people are acquainted with the law, they will change their views.  Of course, many people believe Obama increased their taxes when just the opposite happened, so you never know.


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