The Affordable Care Act works, especially when Congress gets out of the way

By: - July 25, 2016 12:05 pm

ACA-Congress400Many people are familiar with the fact that congressional Republicans voted (and failed) to repeal the Affordable Care Act (ACA) on more than 60 occasions. What gets a lot less publicity, however, is the fact that they’ve regularly obstructed and undermined the law along the way through the use of numerous other destructive tactics.

The latest harmful example involves an effort to target and undermine the ACA’s “premium stabilization programs” – a provision of the law designed to keep insurance companies from jacking up premiums to cover the hard-to-predict costs of Marketplace enrollees.

Here’s how all this works and why it’s so important:

When the ACA outlawed discrimination based on pre-existing conditions, it required insurance companies to accept millions of newly eligible customers. Insurance companies, of course, do business by estimating how much health care their enrollees will use; they generally price their plans so that the money coming in through premium payments balances out the money they pay out in medical claims.

Obviously, the rapid addition of millions of new customers presented challenges in this realm, so in order to help make the new environment work more smoothly, the ACA established temporary “reinsurance” and “risk corridor” programs to stabilize the health insurance market during this time of change. In other words, insurance companies get additional funding to help prevent them from hiking up premium costs for consumers while they gradually get a good handle on the costs and care patterns of their new enrollees. After a few years, insurance companies will have richer data on the newly insured population, allowing them to better predict their costs and set their prices without needing the stabilization programs to offset unforeseen costs.

Oddly enough, the traditionally “pro-business” Republican members of Congress have attacked these programs as a so-called “bailout” for insurance companies – this, despite the fact that consumers are the ones who chiefly benefit from these protections against premium inflation.  Indeed, ACA opponents have repeatedly sought to defund these programs by sneaking “budget neutrality” language into congressional appropriations bills and they’re trying it again in the debate over the 2017 budget. When Congress did this in previous years, insurance companies received only 12.6% of the funds due to them. As a result and not surprisingly, insurers tried and are trying to pass the buck along to consumers in the form of higher health insurance premiums.

To add to the remarkable cynicism of all this, the ACA opponents follow up these destructive actions – actions they know will cause costs to rise for consumers – with repeated and misleading propaganda attacking the ACA and blaming the hikes on President Obama! This is similar to the deceptive spin we’ve seen surrounding United Healthcare’s departure from the Marketplace, the failure of insurance cooperatives and premium hike requests. It’s like conservatives who starve public schools for resources and then blame those same schools for failing to serve children in under-served communities.

All in all, it’s a remarkable example of end-justify-the-means politics. Simply put, opponents of the ACA are willing to let their constituents—both big business and the little guy—suffer so that they can advance their ideological agenda of undermining and destroying the ACA. On one level, this should come as no surprise. Here in North Carolina, conservative lawmakers have repeatedly refused millions of federal dollars to close the coverage gap for 500,000 North Carolinians and help our state’s struggling health care providers. On another, however, it’s striking abrogation of responsibility to govern and to serve.

Let’s hope that over the summer congressional recess, more and more advocates, reporters and average citizens come to grasp the disturbing reality of this shameless manipulation of the debate. The ACA is far from a perfect law and could use plenty of improvements. But the public also has a right to know when the real world problems it exhibits are the result of intentional, ideological sabotage rather than the design or intent of its original authors.

Brendan Riley is a Policy Analyst at the North Carolina Health Access Coalition.

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