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The Reality of Repeal: Access, Quality and Affordability

National Press Club
January 9, 2017
Washington, DC

There are millions of Americans who live with the reality of the choices that will be made in the weeks and months ahead.

AS PREPARED FOR DELIVERY

Introduction

Thank you. It’s an honor to be here at the National Press Club.

A little more than 100 years ago, a former President dropped by the Press Club. Of course, since it was Teddy Roosevelt, he regaled the audience with a story of surviving a lion attack.

He also hinted at an independent run for President. Just to be clear — I’m not doing either of those today.

Roosevelt’s party, the Bull Moose Party, would become the first in the United States to call for national health insurance reform.

So today, I’m continuing a national conversation about our health care system that’s lasted well over a century.

We face some important choices, with serious consequences, and I want to focus on how these choices will impact Americans’ lives.

I want to start by thanking the people sitting with me at lunch — Chiara, Tracy and Kelley.

Millions of people — in communities around this country — have stories just like theirs, lives made better, healthier, more secure by the Affordable Care Act.

Their willingness to share their experiences and speak out gives voice to so many others. 

And that voice — the voice of people who have benefited from this law — needs to be heard.

Because through the noise of the rhetoric, they are the reality.

Where We Were

Nearly 100 years after Roosevelt’s speech, his call for health care reform was as urgent as ever. We had improved the health care system in fits and starts.

But by the time President Obama took office, the need for reform was overwhelming.

More than 40 million Americans did not have health insurance.

Millions more were stuck with coverage that wouldn’t actually protect them when they got sick.

And costs were rising at an unsustainable rate — making coverage unaffordable for families, businesses, and the federal budget.

So we had to address three key issues at once.

We had to expand access to coverage. Improve its quality. And start to make coverage more affordable. Access. Quality. Affordability. We took on all three.

The Progress We’ve Made

And today we can measure our nation’s progress under the Affordable Care Act.

On access, our uninsured rate has dropped below 9 percent — the lowest it’s ever been.

That’s partly due to the continued growth of the Marketplaces.

So far this year, 8.8 million people have gotten coverage through HealthCare.gov — more than last year — and we’ve set a new record for the most sign-ups in a single day.

It's also due to the 31 states and D.C. that have expanded their Medicaid program — and that number may soon be 32, since North Carolina just announced its plan to expand.

And more access is leading to better health.

That’s what Chiara D’Agostino showed me at a New Jersey diner last month.

She signed up for Medicaid in 2014 when New Jersey expanded the program.

Just a couple of months later, she was diagnosed with breast cancer.

She says that without the Affordable Care Act, there’s no way she could fight this cancer. But she’s here today. And she is fighting.

Chiara’s story is another example of how the Affordable Care Act has closed the gap between the health care that people desperately need and their ability to use it.

Since the law passed, the share of Americans who can’t afford needed care has fallen by more than a third.

Researchers have found that among Americans like Chiara who have gotten covered under Medicaid expansion, more people are getting treatment for chronic conditions, more are getting care from a doctor instead of the emergency room, more say they are in excellent health, and fewer are racking up medical debt.

At the same time, we raised the bar for quality.

That’s true if you’re covered through Medicare, where you’re paying less for prescription drugs because the ACA is closing the donut hole.

It’s true if you get covered through the individual market, where, before the law, most plans didn’t cover maternity care, a third didn’t cover mental health, and almost 1 in 10 didn’t cover prescription drugs.

Today, every Marketplace plan covers all of those services.

And it’s true if you get covered in the employer market, where more than half of people used to have plans with lifetime limits — but now those limits on coverage aren’t allowed.

Tracy Trovato knows how important these protections are.

When her husband Carlo faced a leukemia diagnosis, she confronted a question that no one should have to consider — would they be able to fight leukemia on a budget?

That’s because their insurance plan, which they had through Carlo’s job, once had a lifetime limit.

But when she called her insurance company, they told her, "The president took care of that; we don't have maximum caps anymore."

Those words, Tracy said, “were among the sweetest words,” she’s ever heard.

While we’ve made all this progress on access and quality, we’ve also been holding down health care cost growth.

Our national economy is now projected to spend $2.6 trillion less on health care over the course of a decade than was projected before the law passed — even as 20 million more people have health coverage.

When policymakers look at any replacement for the Affordable Care Act, they should ask themselves three questions:

Does it cover at least as many people?

Does it maintain the quality of coverage?

And does it keep bending the health care cost curve in the right direction?

If it fails on any of these, it’s a step backwards.

In access, quality and affordability, the Affordable Care Act has helped us make real progress for families across the nation.

But there is much more to do.

Our Vision for the Road Ahead

In July, President Obama laid out ways we can improve the Affordable Care Act and further strengthen our health care system.

He proposed tackling some of our most intransigent health care challenges, like addressing marketplace competition in parts of the country with too little of it, helping families who still struggle to afford coverage, and lowering the cost of prescription drugs.

But we haven’t just proposed ideas. We’ve put our words into action.

The President — and our whole team at HHS — have been putting the tools of the ACA to work, bending the health care cost curve and improving the quality of health care.

We’ve been doing this by changing the way we pay for care, so that we reward the quality of care, rather than the quantity of services.

We’ve been improving the way care’s delivered by promoting coordination, and prioritizing wellness and prevention.

And we’ve been working to unlock health care data and information, so doctors can make the most informed decisions, and patients can be active participants in their own care.

We’ve started to see some promising results.

Accountable Care Organizations, for example, saved $466 million in 2015, and today millions of Americans are getting higher quality and less expensive care.

This is the key to our vision for the future: You bring down costs across the entire system when you invest in getting people covered, with coverage and care that help them stay healthy.

No Silver Bullets

This type of change isn’t easy, and it’s hard to capture in simple slogans.

As for silver bullets, they don’t exist...

Instead, one of the most important things I’ve learned from implementing the Affordable Care Act is that if something sounds too good to be true, it usually is.

As we enter an important moment in the debate about the future of health care in America, I want to speak to three ideas we have heard that fit that description.

The first of these is the notion that you can repeal the bulk of the Affordable Care Act, but still guarantee that people with pre-existing conditions can buy affordable coverage.

Last week, our Department released an analysis confirming that millions of Americans with pre-existing conditions got coverage under the law.

One of those Americans was Kelley Deal, lead guitarist of the rock band The Breeders.

Like so many others, the law let her pursue her passion — and stay covered, despite a pre-existing condition.

That’s great, and it’s great that there’s widespread agreement that people like Kelley should be able to get health insurance if they need it.

But we didn’t make that goal a reality just by saying it was illegal for insurers to deny coverage because of a pre-existing condition.

In fact, some states tried that approach before the Affordable Care Act.

Insurance commissioners from Washington and Rhode Island have described what happened next: Premiums rose sharply, making coverage unaffordable for sick and healthy residents alike. 

With the Affordable Care Act, we took a different approach.

The law prohibited insurers from discriminating against people based on their medical history — full stop.

But it also recognized that health insurance operates on a simple rule: Sick and healthy people both have to be in.

So the law created tax credits to make coverage more affordable.

And it also created the individual responsibility provision, which requires everyone, who can afford it, to get coverage or pay a penalty.

That requirement is less popular, but it is the only evidence-based way to ensure a balanced risk pool.

Without it, the Congressional Budget Office estimates that premiums would be a whole lot higher.

And it’s good for healthy people, too. After all, you never know when an illness or injury will strike.

Just ask anyone with Tony Romo in their fantasy football lineup this year.

A second idea you may hear is that we can make coverage cheaper for everyone by lowering standards.

Opponents of the law say that you should be able to buy a plan that covers only what you need.

At first, it sounds kinda good. I think we all can agree health coverage should be tailored to your needs.

But when you go down the path of coverage a la carte, you face two tough questions.

First, which benefits should we allow insurance plans to drop? Mental health? Maternity coverage? Prescription drugs? The limits on out-of-pocket costs?

All of these benefits were missing from a large share of plans before the Affordable Care Act.

Plans without them were certainly cheaper, but, as the Congressional Budget Office recently pointed out, it’s not clear they offered genuine coverage.

Equally important, in a world of a la carte health insurance, is how are people who do need certain services supposed to get them for an affordable price?

Let me give an example.

Suppose we let the plans carve out inpatient mental health treatment. It’s a service that’s both expensive and relatively uncommon.

So plans sold without it will be cheaper, and most people will buy the cheaper plans — except people who need inpatient mental health treatment.

Their premiums will rise.

In fact, they’ll rise high enough to cover the full cost of these services.

What that means is that people aren’t insuring against the risk of needing treatment: They’re buying treatment out of their own pocket.

All of a sudden, the insurance market in mental health care has unraveled.

And if a person finds out his depression needs the intensive treatment of an inpatient mental health program, he’ll be on his own.

Making coverage lighter by cutting back standards creates more problems than it solves.

It might work for the healthy and the wealthy, but it will put needed care out of reach for millions of Americans.

The third issue I want to touch on is the idea of a Medicaid “block grant” or “per-capita cap.”

Medicaid is a vital health insurance program that covers more than 70 million children, people with disabilities, seniors, and low-income adults.

It’s also the most efficient insurance program we have, covering people at a lower cost than commercial coverage or even Medicare, with satisfaction rates that meet or exceed employer coverage.

But even with low per-person costs, Medicaid is a major line item in state budgets and a significant investment for the federal government.

It’s tempting to think there could be a simple, silver bullet that could cut costs without cutting coverage.

That’s what block grants and per-capita caps claim to offer.

In the past, congressional proposals have cut federal funding for Medicaid by a third to a half after 10 years, while claiming that increased flexibility for states will make up the difference.

But in health care, there is no free lunch.

Outside experts concluded that these types of proposals would end coverage for at least 14 to 20 million people.

That’s because block grants and per-capita caps don’t give states new tools to control costs: They just shift costs to states, giving them the so-called “flexibility” to decide whose coverage to cut.

Medicaid already gives states real flexibility today.

For example, waivers give states the option to innovate and improve their Medicaid programs, on a case-by-case basis, and in close partnership with the federal government.

Arkansas used a waiver to integrate Medicaid expansion with its Health Insurance Marketplace.

And just today, we approved a Washington waiver that will improve health and bring down costs by improving coordination of behavioral and physical health services.

Ironically, block grants and per-capita cap proposals could actually set back these kinds of efforts, which often rely on up-front federal investment.

Block grants and per-capita caps also leave states on their own to deal with unexpected challenges – like natural disasters, spikes in drug overdoses, or public health emergencies like Zika.

Repeal and Collapse

Finally, I want to address an idea that sidesteps most of these tough challenges.

Last week, Congress took a first step toward repealing the Affordable Care Act without any replacement at all.

Not only does this approach fail to tackle the many tough tradeoffs that come with real health care reform, it doesn’t even succeed in delaying them.

Here are three things that would happen:

First, as I’ve said before, if the Affordable Care Act is repealed without a replacement, the damage to the country’s individual insurance market will begin this spring.

If health insurance companies don’t know what the market will look like going forward, many will either raise prices or drop out.

That means more Americans won’t be able to afford coverage, and others won’t be able to find it at all.

Second, states and hospitals will be in budget limbo. Governors of both parties have said that repeal and delay would create unacceptable uncertainty for their state budgets, and their states’ economies.

Meanwhile, some rural or community hospitals will have to shrink or even shut down if they can’t count on funding through Medicaid.

And third, if Congress never enacts a comprehensive replacement, the consequences for American health care would be stark.

We would not just go backwards — we would fall far behind where we started.

With no replacement, experts have estimated that 30 million Americans would lose their health insurance — 10 million more than the number who have gained coverage through the Affordable Care Act.

That’s because the congressional repeal plan could lead to the unraveling of the individual market.

And our only chance of not going over that cliff depends on opponents of the law doing in the next two years, what they haven’t done in the past six: develop a comprehensive replacement plan.

We face serious consequences.

But delaying tough choices isn’t what Americans do in their own lives, and it’s not what they deserve from Washington.

Conclusion

There are millions of Americans who live with the reality of the choices that will be made in the weeks and months ahead.

People like Tracy and Kelley and Chiara.

President Lyndon Johnson knew the true importance of this reality when he signed the law that would create Medicare.

He told the audience that day, “in this town, and a thousand other towns like it, there are men and women in pain who will now find some ease.”

Our laws and our policies are ultimately defined by their impact on our bosses — the American people.

We’re judged by how well we help the men and women in towns across our country.

Because in the final analysis — those men and women are us. When you are facing illness, when your child is facing illness, there is nothing more important in your life.

We all, at one point or another, will need to lean on this health care system of ours for support.

And when that occurs, what matters is how well this whole system works.

That’s what I’ve learned in my own life, and from the Americans I have been privileged to meet across our country.

So today, it is incumbent on all of us to ask the tough questions.

To bring the conversation back to the reality and the substance.

To elevate facts and dispense with fiction.

To make sure that this conversation reflects the gravity of its impact on millions of Americans.

Thank you. And now, I’m happy to take some questions.

Content created by Digital Communications Division (DCD)
Content last reviewed on January 9, 2017