U.S.
Professor Stephen Shortell, expert on healthcare implementation, speaks on the Affordable Care Act April 1st, 2009. UC Berkeley News
Rollout of the Affordable Care Act DESTINED FOR SUCCESS OR FAILURE? BY NICHOLAS KITCHEL
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pen enrollment for the Affordable Care Act (ACA) has officially begun. If successful, this policy could change the way millions of Americans interact with the healthcare market, meanwhile helping grow the economy. One of the main goals of the law is to expand healthcare coverage. Since the Oct. 1 launch, Americans have been able to purchase health insurance coverage via state and federal marketplaces. Despite constant criticism from many Republicans, initial enrollment numbers exceeded expectations. The White House reported that 4.7 million people visited the Healthcare.gov website and 190,000 called the federal hotline on the first day of enrollment. In California, the first state to create an exchange, the online app received over five million visits and the hotline received over 17,000 calls. With such high numbers, it looks like the policy is on track to meet its goal of expanding coverage. Nonetheless, a number of states and the federal exchange have experienced technical glitches and heavy traffic that created delays. Professor Stephen Shortell, former dean of the UC Berkeley School of Public Health and a former adviser to the Obama administration on health care reform, said, “Any time you implement a complex piece of legislation like this, there are going to be hiccups.” Shortell went on to explain that most states will be able to work through the bugs within three to six months and that he
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believes the actual mechanics of the exchanges will be working very well within one year. For at least the first year, 34 states have defaulted to the federal government exchanges. The other 16 states have established their own exchanges; although it is important to note that implementation will vary from state to state. “Some states, like California, are much better prepared than a number of other states because of our early decision to invest in the necessary resources, and the talent we have working on it,” said Shortell. For states that are less prepared, individuals can still opt to participate in the federal exchanges. Liberal states like California have reacted to the ACA by praising it and encouraging people to sign up. On the other end of the spectrum, conservative states like Texas have reacted by calling it a failure, Governor Rick Perry notably deeming the bill a “criminal act.” Coverage won’t actually begin until Jan. 1, 2014, which is also when the individual mandate will be implemented. Most people will be required to purchase health insurance via marketplaces or pay a tax penalty. One of the challenges facing the ACA is encouraging young, healthy Americans to participate, rather than pay a $95 fine (which increases over time to the maximum of $695 or 2.5 percent of their income, whichever is greater). If too many people choose to pay the fine over purchasing insurance, the cost to those who are paying for coverage will increase. In enrolling young people, Shortell said, “This [enrolling young people] has to do with outreach to the group, instilling a sense of civic pride.” He explained that their decision to opt-in would also benefit their friends and family. Similar to the individual mandate, the ACA also includes an employer mandate, which requires employers who have at least 50 employees to provide healthcare. However, in July, President Obama announced this component of the law
will not be implemented during the first year. According to a Congressional Budget Office report, delaying the employer mandate will actually cost the federal government $12 billion in tax revenues and additional costs associated with increased subsidization of healthcare workers who would have received it from their employers. Even considering the costs, the Obama Administration decided the benefit of giving employers more time to adjust to the system was more important. Still, many Republicans argue that the ACA will be bad for the economy. During his 21-hour speech on Sept. 25, Texas Senator Ted Cruz blasted the law, claiming that, “Obamacare is the biggest job killer in this country.” Other Republicans argue that the employer mandate will cause businesses to cut employee hours and hire fewer workers as a way around the employer mandate. However, Laurel Lucia, a policy analyst at the UC Berkeley Labor Center, maintains that in reality the ACA will actually benefit the economy. “The Affordable Care Act will actually create jobs,” said Lucia. According to a Bay Area
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the ACA will create over 100,000 jobs in California alone. These new jobs will create a multiplier effect on the economy.
Council analysis, the ACA will create over 100,000 jobs in California alone with spending generated by new customers in the healthcare market. These new jobs will create a multiplier effect on the economy. As new healthcare workers enter the workforce, they will make more money, spend more money, and other sectors of the economy will thereby experience growth as well. Many economists, Ms. Lucia included, agree that the Republican arguments that the ACA would harm the economy are inaccurate. Since 97 percent of small businesses are exempt from the employer mandate (those with fifty employees or fewer), and most large businesses offer healthcare already, it is unlikely the employer mandate will harm the economy. Why, then, did the Obama Administration decide to delay the employer mandate, especially at such a cost? Rolling out the mandate on time would have been more pragmatic. However, political calculations surely factored into the president’s ultimate decision. Given a successful open enrollment launch and the fact that the ACA will likely help, not hurt, the economy, it appears the policy is on a prosperous track toward expanding coverage and changing how Americans purchase health insurance. However, not until well after January 1, when coverage and the individual mandate take effect, will we really know whether President Obama’s signature legislation can be considered a success. ■