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The Affordable Care Act is Working

Sylvia Mathews Burwell
The Brookings Institution
September 23, 2014
Washington, D.C.


Thank you very much, Alice. It’s an honor to be introduced by one of my personal heroes.

Alice, for those who don’t know, was the founding Director of the Congressional Budget Office and the first female Director of the Office of Management and Budget. Alice has climbed and continues to climb many mountains – literally and figuratively. Perhaps that’s why, as I aspired to follow in her footsteps, I felt the need to go climb Mount Kilimanjaro when I left OMB.

I have a deep and abiding respect for the work you do here at Brookings. In examining a social issue, you take both the long-term view and the near-term view. You look at data. You analyze trends over time. You conduct smart, systematic, empirical research. You focus on those three words in your motto: “Quality. Independence. Impact.”

All of these things are music to this former Budget Director’s ears.

I want to take this opportunity today, to apply this analytical framework to health care – and specifically, to the question of how well the Affordable Care Act is working. Then I’d like to share with you how we plan to move forward.

As someone who has managed across business, government, and large philanthropies, I’ve come to believe strongly in the importance of measuring impact.

When it comes to the Affordable Care Act, the three measures I believe we ought to look at most closely are affordability, access, and quality.

Are more people getting covered? – access and affordability.

Are middle class families shielded from suffocating medical bills? – affordability.

Are we spending our dollars more wisely? - quality and affordability.

To all of these questions, I would submit to you that the answer is “yes.”

When you consider the law through the lens of affordability, access, and quality, the evidence points to a clear conclusion: The Affordable Care Act is working – and families, businesses, and taxpayers are better off as a result.

Four years after President Obama signed the law, middle-class families have more security, and many of those who already had insurance now have better coverage.

Fewer Americans are uninsured.

At the same time, we’re spending our health care dollars more wisely, and we’re starting to receive higher quality care.

Historical Context

As we walk through the evidence, I think it’s worth putting things in some historical context.

As a country, we’ve been wrestling with the question of how to cover the uninsured for as long as there’s been a Brookings Institution – longer in fact.

In 1912, Teddy Roosevelt’s Progressive Party platform called for universal health care, along with priorities like women’s suffrage, and a national highway system. Women got the right to vote in 1920. Eisenhower created a national highway system in the 1950s. Progress on health care took a bit longer …

Eighty years ago, President Franklin Delano Roosevelt succeeded in creating Social Security, but he was unable to create a national health care system.

Sixty-five years ago, President Truman asked Congress for a Fair Deal that included universal health care, equal rights for all and an increase in the minimum wage … Congress raised the minimum wage …

Fifty years ago, President Johnson signed Medicare and Medicaid into law.

A few years later, another President told Congress, quotecomprehensive health insurance is an idea whose time has come in America. There has long been a need to assure every American financial access to high quality health care.”

That President was Richard Nixon – and in the 40 years since his address to Congress, our country paid a hefty price for our inaction on health care – even as Presidents Ford, Carter, Bush, and Clinton made this a priority.

Costs spiraled out of control, and health care became unaffordable for millions of families and businesses alike.

Taxpayers felt the effects as well. Of those who weren’t priced out of the health care market, many were locked out because they had a pre-existing condition like diabetes or high blood-pressure. And many, who were fortunate enough to have insurance, did not receive a very high quality of care.

By the time President Obama took the Oath of Office, our system had broken down to such a degree that we were spending far more as an economy on health care – in both gross and per capita terms – than all other developed countries across the globe.

In 2009, we were spending $2 trillion a year on health care, which was almost 50% more per person than the next most costly nation.

These rising costs took their toll on family budgets.

In 2007, a Harvard study (led by a certain professor with a bright future named Elizabeth Warren) found that 62% of personal bankruptcies were due to medical problems.

A few years later, the CDC’s National Health Interview Survey found that the families of nearly 1 in 3 Americans experienced a burden due to medical care.

Costs took a toll on businesses’ bottom lines as well. If you ran a small business, you were paying up to 18% more per employee than larger firms for the same health care.

What were we getting for the higher health care costs we shouldered?

In 2010, the Commonwealth Fund benchmarked our health system against six advanced industrialized countries. They looked at quality, access, efficiency, equity, and healthy lives. We finished dead last.

While we’re still not scoring well in these benchmarks –we are doing a lot better on some other measures of quality, which I’ll get to.

By the time the Affordable Care Act was passed, tens of millions of Americans were uninsured … millions more had coverage that wasn’t there when they needed it … and everyone felt the impact.

Too many Americans relied on the Emergency Room for basic medical care, and that impacted costs. Uninsured children were statistically more likely to go without things like immunizations and prescriptions … and uninsured adults were more likely to have chronic health conditions, many of which went undiagnosed.

The system was not working either for millions of Americans who had insurance. Seventy-eight percent of people who went bankrupt due to medical bills actually had health insurance.

Just because you happened to have an insurance card, your care wasn’t necessarily affordable if you got charged several thousand dollars for a ride in an ambulance because your plan didn’t cover it.

Having an insurance card did not guarantee that you had access to the services you needed.

Having an insurance card did not mean your doctors were effectively coordinating so that you wouldn’t end up taking tests twice or getting procedures you didn’t actually need.

The Uninsured

Thanks to the Affordable Care Act, things are changing for the better.

Let’s consider for a moment the evidence on the uninsured – we are making historic progress.

The Affordable Care Act addresses big impediments in health care: affordability, access, and quality. It expanded Medicaid. It lifted barriers to coverage like pre-existing conditions and annual and lifetime caps in benefits. It allowed young adults to be covered on a parent’s plan until age 26. And it created the Health Insurance Marketplace, where insurance companies compete to offer affordable coverage to consumers.

During the last Open Enrollment, consumers could choose from an average of nearly 50 plans – and I have some news for you when it comes to choice and competition:

Today, we’re able to announce that in 2015 there will be a 25% increase in the total number of issuers selling health insurance plans in the Marketplace.

There is already real evidence these plans are affordable: Recently, the Commonwealth Fund released a study showing that 70% of Americans with Marketplace insurance plans feel they can now afford care if they get sick, and a majority say their premiums are easy to afford.

It’s no surprise, therefore, that when folks evaluate the success of the law, the Marketplace receives much of the attention.

Back in March, news reports suggested it would take “something close to a miracle” to get to 6 million people.

Last week we announced that 7.3 million[1] people signed up for Marketplace plans, paid their premiums, and accessed quality, affordable coverage.

7.3 million people is – to borrow a phrase from the Vice President – a big deal. But I’m here to tell you that this isn’t the number we should be obsessing over.

Yesterday we released another significant number: 8 million people enrolled in Medicaid or CHIP since the beginning of Open Enrollment – that’s an increase of nearly 14% compared to average monthly signups before October 1st.

This is a very significant number – but I still think there’s another measure that’s even more important

In just one year, we’ve reduced the number of uninsured adults by 26%.

Said another way, 10.3 million fewer adults are uninsured today than in 2013.

I firmly believe this is the key measure we should all be looking at, because it represents historic progress on an issue that has eluded our country for more than a century.

There isn’t a business in America that wouldn’t be ecstatic with this kind of growth.

Ultimately, every number tells a story. I want to share with you the story of Robert Mandler, Jr. – a previously uninsured Floridian who signed up for Marketplace insurance late last year.

Robert’s coverage took effect on January 1st, 2014. On January 2nd, Robert went to the doctor to get a growth checked out on his tonsil. The diagnosis was tough. Late stage cancer.

After prayer, perseverance, radiation and chemotherapy, Robert is now cancer-free. Without health insurance, the treatments that saved Robert’s life would have cost him about $200,000. With insurance, he paid a $2,000 deductible and $1,500 in copays. You might also be curious to know the cost of his monthly insurance premium … it’s $118.

I want to read to you a few of Robert’s own words: “I was not in favor of Obamacare,” he said. “Last year I was not going to get health insurance. I was going to pay the penalty … I’m very grateful to be where I am now … I must be one of the luckiest people in the world. I’m going to live and work and be productive.”

I would submit that Robert’s story is not a story about politics … It’s not about left or right... It’s about affordability. It’s about access. It’s about quality.

The Middle Class

When it comes to Americans who already had insurance, I’ll be straightforward with you: Those of us who support this law, haven’t done a very good job of explaining why middle-class families who already had insurance are better off.

If you think about a mom and dad sitting at their kitchen table, working out a family budget – it’s a big deal that they’re saving money and still getting better coverage and more financial security.

Many middle-class families have more money in their budgets because their insurance company is now required to spend at least 80% of their premium on their care – as opposed to things like marketing. Families have saved an average of $80 – money they can put into their electric bill or back into their grocery budget.

Meanwhile, millions of seniors are saving billions of dollars on their prescription drugs as we phase out the donut hole. More than 8.2 million seniors have saved more than $11.5 billion since 2010.

Middle-class families are also benefitting from the real security that comes with knowing your health coverage will be there for you when you need it. Families no longer have to worry about losing their homes or having their hard-earned savings wiped-out by an accident, or unexpected diagnosis.

There is security in knowing that if you lose your job, you can purchase Marketplace coverage, even if you have a pre-existing condition and that you won’t lose your insurance just because you get sick, or get cut off if you need chemotherapy or a life-saving operation.

Businesses and Taxpayers

Ultimately, a healthier and more financially secure middle class is good for businesses, who benefit from a healthy workforce and consumers with more disposable income.

The Bipartisan Policy Center reported last week that businesses lose $576 billion each year because of an unhealthy population. As the new law makes our population healthier, we should be able to bring this number down.

Some of the biggest – and most positive – impacts that businesses and taxpayers feel from the law are in the area of costs.

Since President Obama signed the Affordable Care Act, there is evidence that we have bent the cost curve when it comes to health care.

Across the board, we have now held down health care price inflation to the lowest rate in 50 years.

Premiums for employer-based coverage have been driven down as well. Earlier this month, Kaiser reported that this year’s cost growth is the lowest on record. It’s been projected that had premiums grown at the rate we saw over the previous decade – instead of the slower rate we’ve seen over the past four years – employer coverage would be $1,800 higher today.

If you’re an employer, this means it’s easier for you to hire workers today. If you’re an employee, it means you could be keeping more of your own paycheck tomorrow. If you’re a taxpayer, it means a stronger economy.

Improvements to our health delivery system are also having an impact on costs to taxpayers as we spend dollars more wisely.

We’ve saved taxpayers $116 billion by spending Medicare dollars more wisely and improving the quality of health delivery.

Or, in a further example, the Accountable Care Organization models we’re testing through Medicare are saving $370 million and counting. At the same time they are delivering care that’s more coordinated to beneficiaries and rewarding providers for doing so.

Our Plan to Move Forward

Taken together, I believe the evidence points to a clear conclusion: The Affordable Care Act is working.

My job as Secretary is to lead our efforts to make sure it continues to work and to work better. Every business in America worth its salt learns from both what went right, and what went wrong. We’re taking the same approach, and we have a four-part strategy for moving forward:

  1. First is improving access and affordability through the Marketplace. In order to make sure that Americans continue to access affordable choices, we have to get HealthCare.gov right.

    To me, the formula for this is technology, management, and prioritization.

    We are checking off outstanding items on last year’s to do list; cleaning up the backend functionality; and adding functionality for renewing and enrolling in coverage.

    We’re prioritizing the most important items and areas to improve, consistent with our deadlines.

    We’re focused on giving ourselves the appropriate amount of time for testing.

    And we’re very focused on security.

    Anyone who’s ever managed a large scale technology project knows that these projects are challenging, and they sometimes require tough choices. We’re prepared to make those choices so we can deliver the best consumer experience.
  1. Second is improving quality for patients and spending every dollar wisely. We’re testing new models in Medicare and Medicaid and reaching out to the business community to find solutions that we all benefit from:

    Changing incentives to move from a volume-based to a more impact-based system …

    Investing in tools that expand our capacity to change ..

    Improving the flow of information, so doctors can spend more time with patients and less time doing paperwork – and so they can coordinate more effectively with one another.
  1. Third is expanding access by expanding Medicaid. One of my first meetings as Secretary was with governors of both parties. I told them I hope to work with them – regardless of party – to bring more states into the fold on Medicaid expansion. Recently, we were able to do just that with the State of Pennsylvania, which has a Republican governor.
  2. Fourth is helping consumers understand how to use their new coverage – including the role of prevention and wellness. Many of the folks who are newly covered haven’t had health insurance in years, if ever. We want to make sure that folks know how to use their coverage and we’re partnering with organizations across the country to do so.


I’d like to close with one final thought...

As we work through these issues, I think we need a bit of a course correction in this country when it comes to how we talk about these issues – and it starts with collectively turning down the volume a bit.

Surely, we’d all agree that the back-and-forth hasn’t been particularly helpful to anyone – least of all the hardworking families who we all want to help.

I prefer a Brookings, “quality, independence, impact-style” approach.

A small-business owner from Texas named Betsy Furler wrote a blog for our HHS.gov website a few months back. She wrote about her experience going without health insurance. She also wrote about having insurance that refused to cover her son, who had a pre-existing condition. And she wrote how much better off she is today because the Affordable Care Act is working for her and her family.

I want to read you a few of Betsy’s own words:

Recently, I was able to enroll my family – my entire family,” Betsy wrote. “Not only is my son finally covered, our premium is only half what we were paying before. I was shocked to learn my prescriptions, which used to cost $280 a month, are now only $5 … my family now has the financial security and tremendous peace of mind that comes with coverage … I don’t have to work for someone else just for the health benefits anymore. I’ve launched my small business and can focus on expanding it.”

Betsy, Robert, moms and dads working out their budget around the kitchen table … they’re all counting on us. They’re our boss. And they deserve for this to work.

So let’s move beyond the back-and-forth. Let’s move forward, together.


[1] Individuals with both Marketplace medical and dental coverage were erroneously included in this count. The correct number of individuals with effectuated Marketplace medical coverage as of October 15, 2014 is approximately 6.7 million.


Content created by Speechwriting and Editorial Division 
Content last reviewed on January 6, 2015