A slippery slope?

Before PPACA's rollout, some observers thought that the law was engineered to deliberately move the U.S. toward a single-payer system.

“I think that, on the law's initial passage, there were definitely people who thought it was a slippery slope to a single-payer system,” says Joshua Weinstein, an employee benefits consultant at Northrim Benefits Group, LLC in Anchorage, Alaska. “They were going to regulate insurance companies to the point that they couldn't compete, with plans moving toward a sort of plain vanilla benefit. You could differentiate yourself in terms of customer service, but not so much on other things.”

The new system's lack of appeal to insurance companies wasn't the only concern, Weinstein adds. “Some people thought PPACA would be so complicated that employers would want to get out of it completely and want to go to a single-payer system,” he says.

Now that the exchanges at the core of the law have been live for nearly a year, there's less worry about new regulations driving carriers out of the market, but more concern over the technology that powers the exchanges.

“The rollout has absolutely been a mess,” says Jay Starkman, CEO of Engage PEO in St. Petersburg, Florida. “There's mass confusion and changes in the law. We have all these uncertainties and unknowns, and that's made it very difficult for the American business owner or company to figure out how to deal with it.”

Single-payer? Some think so

“I think we're headed toward single-payer, though it breaks my heart to say that,” says Shannon Enders, a chartered benefit consultant at Lake Shore Employee Benefits in Muskegon, Michigan.

The reason, he says, is that PPACA is just too complicated.

“Single-payer would be dramatically less complex than what we have today,” he says. “I even wonder if the current mess was designed to be a mess, so that we'd be more willing to go single-payer.”

A single-payer system, Enders says, would eliminate much of the choice to which Americans are accustomed. “With hassle, comes choice. With simple, comes no choice,” he says.

Even so, Enders thinks that American consumers and business owners might be sufficiently sick of hassle to make the switch.

“I think people are in the place where they just don't want to deal with this anymore,” he says. “Some of the business owners I know are fairly conservative, and they would still consider a single-payer plan, because they're so tired of dealing with this every year. They would throw money at the headache.”

Medicare would be the likely model for a universal single-payer system, Enders says, adding that “it would be the most logical thing to adopt.”

The insurance industry wouldn't be thrilled by a single-payer solution, Enders points out, and probably wouldn't survive in its current formation.

“Health plans are drooling over all the new people. It's guaranteed issue, but people are forced to buy their product. I think many of these well-heeled, well-connected corporations are not going to just stand there and say sure, single-payer is the way to go. I agreed to go to guaranteed issue, you agreed to send me customers, and now you're saying that I'm out?”

But the industry would regroup and survive, he says. “AFLAC sells products to cover the things that insurance doesn't, and that kind of coverage will be more popular,” Enders says. “A single-payer plan won't be able to be all things to all people, and insurers would [still be able to] sell gap coverage.”

Single-payer? Probably not

Other benefits industry participants think it's unlikely that a single-payer system will succeed PPACA—at least in the foreseeable future.

They point to states that have created their own exchanges, rather than relying on the federal model, and the successes these state exchanges have enjoyed.

“Many states have had successful rollouts, most of them by starting early and establishing their own state exchanges,” says Sean Corry, president of Sprague Israel Giles Inc. in Seattle, and a member of the task force that created the Washington state health insurance exchange. “Almost half a million people, more than in the 36 states covered by the federal exchange, signed up through exchanges in California, Connecticut, Kentucky, New York and Washington. Where there were concerted efforts, it's been remarkably successful.”

The federal and some state exchanges were a mess when they began, Starkman agrees, but many of them have improved. “You don't hear the horror stories about going on the exchanges anymore,” he says.

Moreover, Weinstein says, PPACA is a market-based reform that keeps carriers in a place to insure people under a new set of rules.

“Some people thought that PPACA would run the insurance companies out of the market, through the required benefit ratio,” he says. “That doesn't seem to be happening. In some respects, the new model is working.”

It's working especially well for the insurance industry, Corry argues.

“The criticism of PPACA has been around the idea that this is a government takeover. But if you look at how it is actually working, it is a carrier-based, market-based solution,” he explains. “Where it's working, there's more competition, more plans available than ever before, all from private companies. It's enhancing the private insurance market, making it much healthier and more robust. The curbs and rules make it easier for companies to compete.”

The absence of underwriting pressure has removed the competition for the healthiest patients, but has opened the gates to competition around other points, Corry continues.

“In the states where it's working well and in states where it could have worked well, it takes away underwriting competition,” he says. “In Washington, the Blues and a couple of others had a lock on the market, and carriers could use a health screen to send people to the state high-risk pool. They couldn't afford to have richer plans than competitors, because they would attract the sick.”

Now, Corry says, plans are enriched, underwriting pressure is gone, and both enrollment and plan choices have grown.

“Going into 2015, we're going from eight to 12 carriers, and the number of plans has increased by 240 percent,” he says. “The rules make it much safer for insurers to be in our market.”

Instead of competing on underwriting, insurance companies are competing on customer service, costs and offerings within the gold, silver, and bronze plan levels, and drug formularies.

“The real competition that's going on right now is also around limited provider networks,” Corry says, which are a place that carriers may be able to significantly pare costs.

There are other reasons to suspect that PPACA—or something like it—will stick. Anne Lennan, president of the Society of Professional Benefit Administrators in Chevy Chase, Maryland, thinks that the scrambled technology that marred the exchange debut showed the public just how complicated it is to manage third-party health-benefit plans.

“The embarrassment of the exchange rollout makes it seem mind-boggling to even consider a single-payer system,” she says. “The planning that would need to go into it, the strategy, process, coordination—it's proved insurmountable for many states. The federal exchange also had a ton of problems.”

A move to Medicare would remove the cost-containment improvements PPACA has brought to U.S. health care, Lennan adds.

“Lots of plans emphasize prevention and wellness, which has proven very helpful in getting a handle on costs. That's not a thing that Medicare does well,” she says.

If employers were likely to dump workers into the exchanges, that might be a reason to implement a single-payer system. But the IRS notice that came out in the fall of 2013, which sets penalties for firms that fail to offer employers health coverage, “makes it clear that the administration, through this guidance, is sending a clear message to the employer community. People were initially thinking that this could have been lip service, but it really appears to be backed up with action,” Lennan says.

No political will

Like any law, PPACA's future depends on future presidents and congressional members. The longer the new system is in place, however, the bigger a hassle it will be to tear it down and implement something else. Many think that, despite continuing Republican calls to repeal PPACA, Washington simply doesn't have the political will to dismantle it.

“I see PPACA getting more settled,” says Erin Thurston, a senior associate at the health care strategy firm Wilson Strategic Communications in Seattle. “North Carolina is a good example. There were people there who opposed [the law], and now they actually really like what they have through it.”

Big changes have a history of needing time to take root, says DJ Wilson, president of Wilson Strategic Communication as well as State of Reform, an online health care strategy magazine. Medicare became law in 1965, for instance; Arizona finally adopted it in 1982.

“PPACA will increasingly become accepted as the law of the land,” he says.

The botched exchange rollout, coupled with the Veterans Administration scandal, isn't likely to push Americans further into the federal government's arms, Wilson adds.

Wilson dismisses the idea of PPACA as a deliberate route to single-payer coverage.

“That would suggest that Congress is good at doing anything, that it's really smart, and that members can get together to pull the wool over everyone's eyes,” he says.

Starkman points out that a single-payer system would need a champion—and there are no obvious candidates in Washington.

“Moderate Democrats presented and passed PPACA. The opposition has not been the extreme left—it's been the extreme right, and they're not going to implement a single-payer solution,” he says.

If a single-payer system's chances don't look good on a federal level, they look only slightly better for individual states. “Vermont is just one state,” Wilson says. “Texas ain't going anywhere.”

There's no way of knowing for sure what PPACA's future holds, particularly when the Supreme Court may revisit parts of the law. As far as he can tell, though, “some form of PPACA is here to stay,” Starkman says.

“I don't foresee it being repealed. Tweaked, yes, and maybe majorly tweaked. There will be political fuss, but it's here to stay.”