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The Pitfalls of Affordable Care Act Implementation

There are two major unresolved issues with the Affordable Care Act, despite the fact that it has survived the legal and electoral minefields of the past two years. The first is whether states will expand Medicaid up to 133% of poverty, now that the Supreme Court gave them an opt-out. This will be a brutal battle that will play out over years, with partisans on each side sniping.

And there’s reason to believe that states who don’t already have robust Medicaid coverage – for whom the expansion will represent a bigger lift, as much as a 4% increase in their committment to the program – will shy away from participating.

That’s true, even though in the overall scheme of things, the increases in spending for the states are for the most part less than 1% of their overall budgets. The success or failure of the entire project, in terms of expanding health insurance coverage, can be traced back to the winners in this fight over Medicaid expansion.

The other issue concerns – well, implementing everything else. Will the states and the federal government sufficiently create exchanges that automatically determine eligibility for anyone who accesses them? Will the feds, not expecting to have to take over the exchange process for the majority of states, prove up to the task (and find the funding)? Will the subsidies get delivered to insurance companies in a seamless way? Will we still see efforts at denying coverage or rescinding policies? Will eligible beneficiaries even know that they’re eligible for subsidies? Will the states with partisan leaders predisposed to fight Obamacare seek to sabotage the whole effort? Will Congress shift more costs onto individuals and states in ways that will cause states in particular to resist coverage? What if drug prices start to rise in relative terms, and the cost of health care overall expands in ways that the ACA cannot keep up with? Will the inevitable failures in implementation sour the public on the program? Will there ever be an opportunity to improve or tweak this program, given the political realities? Just something as simple as getting the new community of DREAMers, who are now eligible for deferred action, into the ACA’s benefit programs will be an enormous and probably fruitless task.

The political context should not be ignored. All of this will happen during 2014, a midterm election year, where Democrats will struggle to hold the Senate, while trying a heavy lift of adding 17 seats in the House. What if the dominant story becomes the failures of Obamacare? Certainly that narrative is already being written in some circles? The ACA already indirectly led to one nightmare election for Democrats, in 2010. Could it lead to another?

In the best of circumstances, you will see growing pains as the country gets used to a system that is only currently used in Massachusetts, in a state where everyone actually wants the system to succeed. Given the fractured environment of the current political landscape, that kind of cooperation simply won’t happen. And just as Republicans had an incentive to tank the economy in 2010, they have an incentive to tank the ACA in 2014.

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David Dayen

David Dayen