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Why the (Un)Affordable Care Act Should Be Repealed and Replaced

      As coauthors of Why ObamaCare Is Wrong for America,
      • Turner G.-M.
      • Capretta J.C.
      • Miller T.P.
      • Moffit R.E.
      Why ObamaCare Is Wrong for America.
      we strongly recommend that the Affordable Care Act of 2010 be repealed and replaced as soon as possible. The Affordable Care Act has become deservedly more unpopular since its enactment.
      • Henry J.
      Kaiser Family Foundation
      Kaiser Health Tracking Poll.
      CNN/Opinion Research Corporation Poll (Question 26).
      It is too costly to finance,
      • Holtz-Eakin D.
      The real arithmetic of health care reform.
      too difficult to administer,
      Small Business Coalition for Affordable Healthcare
      Five ways PPACA hurts small business.
      too burdensome on health care professionals,
      • Turner G.-M.
      • Capretta J.C.
      • Miller T.P.
      • Moffit R.E.
      Why ObamaCare Is Wrong for America.
      and too disruptive of existing health care arrangements that many Americans prefer.
      • Singhal S.
      • Stueland J.
      • Ungerman D.
      How US health care reform will affect employee benefits McKinsey Quarterly.
      It will limit future economic growth,
      • Holtz-Eakin D.
      The Patient Protection and Affordable Care Act: Labor Market Incentives, Economic Growth and Budgetary Impacts Testimony before the House Committee on Ways and Means.
      distort health care delivery,
      • Gottlieb S.
      Accountable Care Organizations: The End of Innovation in Medicine?.
      exacerbate already unsustainable entitlement spending,
      • Foster R.
      Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended.
      and erase any meaningful constitutional limits on the enumerated powers of the federal government.
      US Court of Appeals for the Eleventh Circuit (2011)State of Florida, et al. v. U.S. Department of Health and Human Services, et al. Nos. 11-11021 and 11-11067.
      By relying on illusory formulaic reductions in future payments to physicians, on burdensome new reporting requirements, and on top-down restrictions on medical innovation, the Affordable Care Act will further jeopardize access to quality care.
      • Turner G.-M.
      • Capretta J.C.
      • Miller T.P.
      • Moffit R.E.
      Why ObamaCare Is Wrong for America.
      For example, proposed lower levels of reimbursement for physicians and other health care providers—as set out in the Affordable Care Act payment formulas, the even less accountable future operations of the Independent Payment Advisory Board, or the continued operation of the statutory Sustainable Growth Rate—along with forthcoming comparative effectiveness guidelines and Medicare pay-for-performance reporting rules will force medical practitioners to be more responsive to the preferences of budget-sensitive federal officials than to the best application of their professional judgment to their patients' preferences and needs. The imperative to comply only with the edicts of a smaller number of highly politicized regulators, administrators, and payers under the Affordable Care Act might reduce some of the annoyance of coping with the more varied payment regimens currently used by larger numbers of private insurers and other third-party payers, but it will substitute the greater burdens of political risk, permanent monopsony bargaining power, and unfunded mandates on many medical practitioners.
      The new health law was built on faulty premises, a number of which are reflected in Dr Dalen's commentary in this Journal.
      • Dalen J.E.
      Let's not repeal the affordable care act of 2010.
      Researchers certainly may differ over whether the United States has the “best health care delivery system in the world.” Our own work suggests that there are many ways to improve our system's long-standing problems with excessive costs, inconsistent value, and access to care by reforming the flawed public policies that drive them, including overregulation, mistargeted subsidies, lack of price transparency, overreliance on third-party payment, and barriers to competition.
      • Turner G.-M.
      • Capretta J.C.
      • Miller T.P.
      • Moffit R.E.
      Why ObamaCare Is Wrong for America.
      • Antos J.
      • Miller T.P.
      A Better Prescription: AEI Scholars on Realistic Health Reform.
      • Capretta J.C.
      • Miller T.P.
      The Defined Contribution Route to Health Care Choice and Competition.
      • Conover C.J.
      • Miller T.P.
      Why a public plan is unnecessary to stimulate competition.
      US Congress
      The Burden of Health Services Regulation Hearing before the Joint Economic Committee.
      • Miller T.
      Improving access to health care without comprehensive health insurance coverage.
      • Miller T.P.
      • Brennan T.A.
      • Milstein A.
      How can we make more progress in measuring physicians' performance to improve the value of care?.
      Unfortunately, the Affordable Care Act will only worsen these problems rather than help to solve them.
      Citing the widely criticized
      • Whitman G.
      WHO's Fooling Who? The World Health Organization's Problematic Ranking of Health Care Systems.
      World Health Organization (WHO) rankings in 2000 will not help to guide us.
      • Bialik J.
      Ill-conceived ranking makes for unhealthy debate.
      The WHO measures often relied on “imputed” rather than real data, in instances where it actually had none of the latter (as noted by UK health scholar Allen Williams).
      • Williams A.
      Science or marketing at WHO: a commentary on ‘World Health 2000.'.
      Those measures also were biased to overemphasize “expert” political views about inequality in health care rather than to compare overall health outcomes across different nations and assess how patients actually view their own health care.
      • Blendon R.J.
      • Kim M.
      • Benson J.M.
      The public versus the World Health Organization on health system performance.
      Other problems remain in flawed measures
      • Frech H.E.
      The OECD's study on health status determinant: roles of lifestyle, environment, health-care resources and spending efficiency.
      of life expectancy and infant mortality in the WHO rankings and similar comparative studies
      • Miller T.P.
      Debunking Richard Cohen: how does the U.S. health-care system stack up?.
      • Ohsfeldt R.L.
      • Schneider J.E.
      The Business of Health: The Role of Competition, Markets, and Regulation.
      • Gibson E.
      • Culhane J.
      • Saunders T.
      • et al.
      Effect of nonviable infants on the infant mortality rate in Philadelphia, 1992.
      • Baily M.N.
      • Garber A.M.
      Health care productivity.
      that do not account for factors operating outside the health system (eg, levels of education, socioeconomic status, and health-limiting habits within particular nations). For example, June O’Neill and David O’Neill suggest the limits of simplistic comparisons between the health of Americans and the health of Canadians along these dimensions.
      • O'Neill J.E.
      • O'Neill D.M.
      Health status, health care, and inequality: Canada vs. the U.S. Forum for Health Economics & Policy.
      Higher levels of uninsured citizens in the United States do affect overall population health to some degree, but the magnitude of such effects remains in doubt because of the above factors and other ones.
      • O'Neill J.E.
      • O'Neill D.M.
      Who are the uninsured? An analysis of America's uninsured population, their characteristics and their health.
      • Miller T.
      Making a difference in differences for the health inequalities of individuals.
      Moreover, most of the Affordable Care Act's projected insurance coverage expansion will occur through the already overstretched Medicaid program, which produces higher levels of emergency department use per person than does lack of any insurance and, in some cases, produces even worse health outcomes.
      • Pitts S.R.
      • Niska R.W.
      • Xu J.
      • Burt C.W.
      National Hospital Ambulatory Medical Care Survey: 2006 Emergency Department Summary.
      • Weber E.J.
      • Showstack J.A.
      • Hunt K.A.
      • et al.
      Are the uninsured responsible for the increase in emergency department visits in the United States?.
      • Goldstein J.
      As insurance coverage increases, ERs get busier.
      • LaPar D.J.
      • Bhamidipati C.M.
      • Mery C.M.
      • et al.
      Primary payer status affects mortality for major surgical operations.
      In short, simply increasing the number of insured Americans by itself will not ensure improved delivery of health care, let alone better health outcomes, particularly without other reforms that will realign incentives facing all parties in the health system, improve health decisions, hold all parties more accountable for their choices and actions, and ensure a more sustainable balance between health care supply and demand. We believe that the Affordable Care Act fails to achieve these vital reforms and that there are better ways
      • Turner G.-M.
      • Capretta J.C.
      • Miller T.P.
      • Moffit R.E.
      Why ObamaCare Is Wrong for America.
      • Capretta J.C.
      • Miller T.P.
      The Defined Contribution Route to Health Care Choice and Competition.
      • Capretta J.C.
      • Miller T.
      How to cover pre-existing conditions.
      to do so, including the following:
      • transitioning to “defined contribution” methods of financing taxpayer subsidies for health care;
      • targeting coverage subsidies to be based more on income and health status, and linking them to income-related stop-loss “major risk” protection against medical bankruptcy;
        • Feldstein M.
        • Gruber J.
        A major risk approach to health insurance reform.
      • providing a sustainable safety net through more robust taxpayer funding of coverage for individuals with high health risks;
      • tying expanded protections for preexisting health risk and enhanced portability of insurance to incentives for maintenance of “continuous insurance coverage”;
      • encouraging more vigorous competition in health insurance and health care delivery;
        • Havighurst C.C.
        • Richman B.D.
        The provider monopoly problem in health care.
      • mainstreaming more Medicare and Medicaid beneficiaries into affordable, competitive private health plan options, building on the success of the Medicare Part D structure (That program's costs are expected to be>40% lower over the first decade than original budgetary estimates, and the decrease in the original projected growth rate for Medicare drug spending by 2013 will be greater than that for the private market for those aged<65 years.);
        • Capretta J.C.
        Klein's F on Part D.
      • aggregating and enhancing the best data available to expand access to useful information about health care cost, quality, and value to assist decentralized decisions about insurance and treatment options; and
      • moving personal health care decisions out of politics and back into the hands of patients and physicians.
      Some critics of this recommended policy shift toward more reliance on competitive and consumer-directed private health insurance coverage (bolstered by the above reforms) contend that this would fail to provide enough Americans with comprehensive protection against high health care costs and serious health risks. However, they begin by asking the wrong questions—how to cover everyone through mandates, price controls, comprehensive benefits, minimal cost sharing, and vastly expanded taxpayer subsidies—and end up with answers that do not work, like the Affordable Care Act.
      For example, even though some modelers of the coverage take-up effects of an individual mandate seem to assume reflexively that its commands will be obeyed faithfully and executed flawlessly, the actual proposals for enforcement of an individual mandate often provide more bark than bite. Not even the strongest version of an individual mandate to purchase health insurance would guarantee what should be its ultimate objective: improvements in people's health. Requiring people to have health insurance in itself is not the same as ensuring that they actually receive all of the effective health care services they may need in a timely manner. To do that, one would need to mandate not just the purchase of health insurance but delivery of the actual “treatment” itself.
      The continuing debate over the individual mandate and its underpinning of the Affordable Care Act's other provisions for health insurance regulation, health care financing, and delivery system restructuring requires a more realistic understanding of the limits of government coercion within our political system, the balance of power between government and citizens in our Constitution, and the long-standing societal values that sustain both of them. There are other effective ways to ensure necessary health insurance coverage for more Americans that are less onerous, less unpopular, and less constitutionally questionable.
      U.S. House of Representatives Committee on Education and the Workforce, Subcommittee on Health, Employment, Labor and Pensions
      The Pressures of Rising Coss on Employer Provided Health Care Hearing.
      A better mix of policy reform ingredients would begin by relying first on persuasive incentives rather than coercive commands.
      First, we should extend insurance portability rights and protection against new medical underwriting due to changes in health status (already provided since 1996 by the Health Insurance Portability and Accountability Act requirements for employer group health plans) to those entering, exiting, or remaining in the individual health insurance market—as long as they maintain continuous qualified insurance coverage. In short, the incentives to get insurance and maintain it would be strengthened. Switching between group and individual markets would become less complicated and stressful. However, those who delay obtaining coverage when healthy, or drop it and stay uninsured for too long, would run the risk of paying higher premiums in the future or facing restrictions on coverage of preexisting conditions they develop in the interim.
      Second, we need to redistribute and prioritize current insurance coverage subsidies. There just is not a sustainable line of credit ahead or enough tax revenue to keep financing the levels of tax expenditures and public program benefits that foster the illusion we can pay most, or at least a substantial share, of everyone's health insurance premiums with other people's money. We should not, and actually do not, need to bribe upper-middle class and wealthier Americans to purchase and maintain insurance coverage. They already have assets to protect themselves and generally live healthier lifestyles. We could instead lower their other taxes to offset the net effects of making the full unsubsidized costs, and real value, of their current coverage and care more transparent to them. However, that does not mean that additional subsidies (offset by other spending reductions in the health care portion of the federal budget) will not be needed to help other populations targeted on the basis of lower-income and higher health-risk needs. Those dollars can help pay for some, and sometimes all, of the actuarially equivalent costs of their basic care, but almost everyone needs to start seeing more of the real price tags in health care markets again, instead of the fake ones at the government discount store.
      Third, because no system of coverage incentives and need-based subsidies is foolproof, we have to maintain a back-up system of safety-net protections for those who fall through the cracks or must be protected from the unbearable consequences of their irresponsible behavior. Beyond a narrowed base of Medicaid assistance for the temporarily low-income and more permanently disabled, the next layer of support should involve more sustainably financed, high-risk pools that are operated by states within basic federal parameters. Such subsidized coverage would still cost more than the conventional insurance for standard-risk customers, but its premiums would be capped in proportion to an enrollee's income and likely risk-related health costs.
      Fourth, no matter how much money taxpayers decide they can afford to throw at the wall of insurance coverage problems, the real key to affordability is health care that is delivered quicker, simpler, cheaper, more consistently, and more effectively. An individual mandate (let alone more rigid single-payer financing of health insurance as a politically controlled public good) tries to ignore that problem, because it cannot solve it. To fix it, better incentives are needed for more efficient health care. Less affordable health insurance is a secondary symptom, not the primary cause, of high-cost health care. We should insist as private purchasers and taxpayers that insurers and health care providers find ways to offer different mixes and methods of care and coverage that cost less and are worth more.
      Instead of trying to prop up a controversial and ineffective individual mandate, we should focus on the most important unmet tasks of true health reform: improving the value of health care (and its related insurance financing) that is delivered to patients so more people can and will purchase it voluntarily, and investing in other more effective ways to boost their lifetime health. Insurance coverage still can be increased through less-intrusive means, such as higher premiums for those who delay, or fail to maintain, coverage; more targeted and equitable subsidies; and better products that customers will purchase voluntarily.
      The editors of the Journal also insist that the problem of medical bankruptcy is a preeminent issue that overrides many of the above issues. We agree that the medical debt issue certainly is worthy of further reform efforts within a broader policy context than health policy alone. Further adjustments to the nation's bankruptcy laws, better macroeconomic and labor market policies, more productive investment in human capital, and more vigorous market incentives to lower future health care costs are necessary elements of a more comprehensive approach than simple insurance coverage “solutions” provide. We also caution strongly that the medical debt “crisis” needs to be placed in a more empirically based context
      • Mathur A.
      • Miller T.
      Clarifying the research on medical bankruptcy: a response to representative Kildee House Committee on Education and the Workforce.
      than several of its strongest proponents have asserted in these pages.
      • Himmelstein D.
      • Thorne D.
      • Warren E.
      • et al.
      Medical bankruptcy in the United States. 2007: results of a national study.
      A clear plurality of Americans oppose the Affordable Care Act and particularly its unprecedented individual mandate to purchase health insurance. Whether or not the Supreme Court later this year agrees with several lower court rulings that have determined such a mandate is unconstitutional, the overall structure of over-centralized, over-regulated, over-subsidized, and centrally planned health care that the new health law aims to implement remains unaffordable, unworkable, and unsustainable. Its early results are designed to be inconclusive because the Affordable Care Act's essential features will not be fully implemented for several more years. They promise to be both disappointing and destabilizing across the entire health care system and our overall economy. We cannot afford to waste additional years heading in the wrong direction. The sooner the Affordable Care Act is repealed and replaced, the earlier we can get back to the urgent need to reform the US health care system more effectively and sustainably.

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