As Congress debates a plan to “repeal and replace” the Affordable Care Act, it should look to California’s success in implementing the law. In a highly charged ideological environment, though, there is a risk that some of these lessons of this success may be misinterpreted or ignored.
Most people think the ACA was successful in California because the state loved the law while it was under attack in most of the rest of the country. But there were many other more important factors, the first of which was the sheer size of California.
Covered California, the state’s ACA marketplace, has featured some of the nation’s lowest premium increases. This has a lot to do with its having 1.4 million customers, which gives it the ability to negotiate better deals for enrollees.
Congressional proposals to allow the purchase of insurance “across state lines” could help create such scale. But they will not be beneficial to Americans if they are a back door for gutting consumer protections and return us to the bad old days of “hospital only” policies and yearly limits on coverage.
The second most important factor was that California had a competitive insurance market before health care reform that got even more competitive in the last few years. People lament the lack of choices available in ACA marketplaces but forget that the individual markets in most states were dominated by a single insurer before health care reform.
The law may not have solved that problem, but its repeal isn’t a solution to the problem either. Congress should look at what California did to bring Medicaid Managed Care plans into the commercial market as well as the challenges that even large insurers like UnitedHealthcare had in entering a competitive market.
The third most important factor is the extent to which California’s doctors, hospitals and other health care providers have decades of experience competing with each other to deliver integrated, high-value care. The number of systems competing with each other in this way is much higher in Southern California, and hence health care costs are much lower.
Affordability of health care is a major challenge regardless of the party or ideology of would-be health care reformers. This affordability cannot be generated indefinitely by government subsidies or created solely by deregulation. It is a result primarily of competition among health care providers who have the financial incentive and technical capacity to provide high-value care.
This brings us to Californian’s enthusiastic embrace of the law. In some ways, this was ironic. The state that might most prefer to be setting up a single-payer system ended up being the most adept at implementing a market-based reform.
California made what could be perceived as some hard-hearted choices in the implementation of the ACA. This included canceling all individual market policies that were not grandfathered in order to have adequate enrollment in its new market.
The important lesson from this is that there will be winners and losers in moving to any new system of financing care. It is one thing to act as a champion for the perceived or actual losers of Obamacare. It is quite another to be responsible for creating a new set of policy “losers.”
The only way to create outcomes that benefit everyone is to pioneer more effective methods to treat diseases and to work together to build healthier communities. Again, Congress should look to California, which is the home of precision medical scientific advances as well as some of the most advanced efforts to redesign communities to promote health.
If we don’t learn the lessons of what has made Obamacare successful in California, we’re just going to be back to repealing and replacing “Trumpcare” in another six years. And that would be a real tragedy.
Micah Weinberg is president of the Economic Institute at the Bay Area Council, an employer-backed public policy organization and a member of the Covered California for Small Business Advisory Group. Contact him at firstname.lastname@example.org.