Sure, the Patient Protection and Affordable Care Act will cause disruptions in health care coverage and other issues, researchers say. But it's not as bad as it could be.
In a report this week from the Urban Institute, analysts say disruption of existing health insurance coverage by PPACA is an "inevitability," and it isn't nearly as bad as other potential health care reforms — such as a single-payer or market-based reforms — would be for consumers.
"No one likes disruption," said Judy Feder, a fellow at the Urban Institute's Health Policy Center and author of the report. "But, compared to alternatives, the ACA's disruption is modest in scope, cushioned by subsidies, and, over time, will benefit all participants."
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"The recent furor over policy cancellations in the individual health insurance market demonstrates a long-standing challenge to the enactment, let alone the implementation, of effective health reform," the report reads. "Disruption of the 84 percent of Americans who have health insurance creates a powerful impediment to the extension of insurance to the 16 percent of Americans without it. But despite claims to the contrary, it is not possible to reform our health insurance arrangements without somehow disrupting existing arrangements."
In addition to being "remarkably modest," the report said PPACA's disruption improves the pooling of risk that is essential to effective insurance.
By contrast, a single-payer system "embraces, rather than avoids, disruption in order to replace private with public insurance in a single risk pool."
Though the outcome would be dependent on policy specifics, "coverage would undoubtedly be less generous and more costly for some Americans and more generous and less costly for others. Such a shift would disrupt 170 million people who currently rely on [employer-sponsored insurance], along with the 11 million people in the individual market."
Similarly, Feder wrote that the same would be true "for conservative proposals to replace the tax preference for ESI with a flat tax credit for the purchase of individual coverage in a market without ACA's regulatory structure.
"That is because the current ESI tax preference, or subsidy, promotes natural risk pooling—by supporting coverage of all workers in a firm at the same premium, regardless of differences in age, health status or other factors," Feder wrote. "Eliminating the tax subsidy would increase the likelihood that healthy and young workers would seek a better deal in the individual market — where, were the ACA repealed, insurers would be free to vary premiums with health status and less healthy and older workers would face higher premiums and more frequent coverage denials. With healthier workers leaving ESI, average premiums for the less healthy and older workers remaining would increase, likely leading to a decline in the share of employers offering coverage."
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