Heal thyself: No matter what happens to Barack Obama’s law, American health care is changing for good
“HELEN R.” is an elderly woman who is currently on seven different medications. Thanks to Barack Obama’s health reforms, however, she gets cheaper medicine and cancer tests. “The health-care law is about people like me,” Helen R. explains in a new video on a government website. Republicans may deride the health law as “Obamacare.” Helen R. prefers to call it “Helencare”.
Mr Obama’s health reform turned two years old on March 23rd. The White House is doing its best to sell it as a success. The video of Helen R. is one of many. The Department of Health and Human Services (HHS) releases sunny data almost daily. But the campaign still feels defensive. There are good reasons for that: the law’s main provisions will not take effect until 2014, and this anniversary may be its last.
Republicans in Congress and on the campaign trail say they will scrap the law at the first opportunity. With an election in November that threat is now real. A more immediate danger looms on March 26th when the fight over the law will reach the Supreme Court.
The main question is whether Congress may penalise those who do not buy health insurance, the so-called “individual mandate”. But the court will consider other questions, too: whether the law coerces states to expand Medicaid; whether the rest of the law can stand if the mandate is struck down; and even whether the whole case should be postponed until the mandate takes effect in 2014. Big rallies will coincide with the Supreme Court’s arguments, but the furore belies an increasingly obvious fact. American health care is changing, possibly for good.
That is not because the law’s implementation has been smooth. In October Mr Obama scrapped an impractical insurance plan to pay for nursing homes and other long-term care. A fight over the provision of contraception has dragged on and on. And one of the law’s biggest measures is also one of its shakiest. State exchanges, where individuals will buy insurance, must open by 2014, when the mandate comes into force. States are making slow progress. Some governors shun the exchanges as a matter of principle. Others are waiting for more information. On March 12th HHS issued new regulations for the exchanges. Yet even 644 pages of rules left unanswered questions, including what exactly insurers have to cover.
Despite all this, HHS is continuing the slow work of implementation. Thanks to the reform, children up to the age of 26 can stay on their parents’ insurance. Discounts and drug rebates have saved the elderly $3.2 billion on prescription drugs. Insurers must devote at least 80% of their fees to medical care, instead of to administrative costs or margins. From September, they will have to describe their products in a clear, comparable manner.
More interesting, and important in the long term, are the reforms that start to change the structure of health care. America rewards those who provide lots of care, not those who keep patients well. The result is costly and inefficient. Mr Obama’s law mainly tackles a symptom of this problem: that millions of Americans cannot afford insurance. But the law also tinkers with health care’s perverse incentives.