For its entire five-year history, the Patient Protection and Affordable Care Act has faced constant criticism, stoked by pundits and pols who churn anti-Obamacare sentiment in an effort to score points with consumers/constituents. Because of this antagonistic publicity, Obamacare rarely gets credit for any heroic efforts (keeping healthcare costs from accelerating, dropping the uninsured rate by a third), while self-inflicted missteps (the healthcare.gov launch, the Jonathan Gruber comments) are magnified.
Basically, Obamacare is the Spider-Man of laws. For those unfamiliar with the character beyond his arachnid superpowers, I should explain that Spider-Man is constantly hounded by J. Jonah Jameson, the publisher of the Daily Bugle. Jameson spins Spider-Man's victories over villains into front-page headlines about damage done to buildings and potential harm to bystanders, while penning editorials claiming that Spidey is a drain to taxpayers. Perhaps Jameson sincerely believes that Spider-Man is a menace, but by fueling hatred for the do-gooder, Jameson is able to increase circulation of the Daily Bugle, and eventually become mayor of New York City.
Obamacare, like Spider-Man, is not beloved by the public, and may never be. In large part, this is because people don't understand Obamacare, and more importantly, don't understand what American healthcare would be like without it. Removing subsidies for health insurance exchange coverage would be disastrous in the federally facilitated exchange states and not just for their customers. But the GOP is publicly willing to take that chance in the name of curtailing the healthcare reform law.
Immediate threats to Obamacare: Exchange subsidies and the individual mandate
Obamacare will face two threats this summer, and should survive them both. If the exchange subsidies, and possibly by extension the individual mandate, pass this gauntlet, then Obamacare will remain relatively intact for the next five years, regardless of the upcoming presidential election.
In June 2015, the Supreme Court will likely decide (6-3 is my guess) that subsidies to state exchanges are legal. It's hard to square that the court decided in 2012 that the mandatory Medicaid eligibility expansion was too onerous for states, but that three years later the federal government wasn't coercive enough to get states to start their own exchanges.
I predict that a month after that, the Republican majorities in the House and Senate will attempt to use the budget reconciliation process to repeal Obamacare symbolically, which of course would be vetoed by the President. The differences between the two legislative bodies over military spending may serve as an effective cover to actually avoid reconciliation because the GOP may not want to enter the 2016 election highlighting a platform that not only takes away health insurance from millions, but also radically transforms Medicare and Medicaid.
While Hillary Clinton remains the favorite to win the presidency in 2016, the basic tenets of Obamacare are so unknown to most Americans that a moderate Republican like Jeb Bush could, after being elected, repackage the entire law, with some modifications, and call it a repeal-and-replace. The employer mandate could be dropped without fundamentally changing the law, and the individual-mandate penalty could be decreased to make it more consumer-friendly while still encouraging personal responsibility. Restricted to young adults, catastrophic-level plans (a step below bronze on the exchanges) could be made available to residents of all ages.
Restraining cost: Creation of healthcare ecosystems
In five years, the American healthcare landscape will be drastically changed. Instead of buying insurance that allows access to a broad network of hospitals and physicians, consumers will buy into healthcare ecosystems centered around a regional health-system brand; the insurer and health network essentially will be rolled into one. In Los Angeles, residents will choose between Kaiser Permanente and Avility, and all their care will come through one ecosystem or the other. Pittsburghers already are being asked to decide between UPMC or Highmark, and Ohioans may soon have to choose between a health network backed by Cleveland Clinic or a network with participation by University Hospitals.
Many of these regional ecosystems will be solidified this summer, as insurers and integrated delivery networks prepare their exchange products for 2016. Instead of providing members access to a patchwork of any willing providers, narrow networks will increasingly direct to a single IDN or health-system-backed ACO. These partnerships will help narrow networks shed their image of being cut-rate insurance options; instead they will be seen as memberships to exclusive lifestyle organizations.
These narrow networks will get full traction entering 2018, when the Cadillac Tax begins punishing employers for spending too much on per-employee health benefits. Employers will shift to defined-contribution plans to avoid the tax, with the narrow-network plans being crafted now serving as baseline plans. Should employees want broader provider networks, they'll have to pay for it out of their own pockets.
In five years, most regions will be dominated by two or three competing healthcare ecosystems. Relying on brand loyalty and convenience, these ecosystems will offer members not only access to physicians and hospitals, but also gyms, events, lifestyle coaches, and proprietary electronic medical records. Premiums will be held in check because members will be able to switch ecosystems during open enrollment, although if premiums are relatively close in price, members will stick with what they know.
Future threat to Obamacare: Extreme provider consolidation
After insurers have been relegated to claims handling, or have acquired their own health networks, the extreme consolidation of ecosystems will encourage collusion in pricing, about the time Obamacare celebrates its 10th anniversary. A major issue in the 2020 presidential election will be how to contain rising healthcare premiums as the provider networks begin to look like cartels.
The Democratic candidate for president will claim that Obamacare didn't go far enough, and will push for single-payer Medicare expansion, which will be palatable since consumers will be more interested in providing access to their favored healthcare ecosystem rather than freedom of choice among insurers. The Republican candidate will claim that all the troubles can be traced back to Obamacare, and again call for repeal-and-replace.
Either way, by 2020 Obamacare will have completed a fundamental shift in American healthcare delivery, with more-efficient, higher-quality care and access for more people, and will still be blamed for the remaining ills of the industry.
It's hard being your friendly neighborhood healthcare law, but with great power comes great responsibility but not great respect.
Follow Mark Cherry on Twitter @MarkCherryDRG