The Moral Case for Affordable Coverage and How Obamacare Fails To Live Up to It
By Austin Frakt, PhD
The JAMA Forum, June 11, 2014
Some health policy commentators have claimed that President Obama and Affordable Care Act (ACA) supporters have not made a convincing moral case for coverage expansion. Scholars suggest that support for the law could turn, in part, on the moral argument for it. What is that argument, and is implementation of the law consistent with it?
We can make some headway by turning to Norman Daniels, PhD; Brendan Saloner, PhD; and Adriane Gelpi, who articulate one possible moral case for universal coverage. Their key assumption is that there is a “social obligation to protect opportunity.”
From this, a lot follows. One’s opportunity is threatened by poor health. In sickness, one cannot learn or earn as efficiently, let alone enjoy the same length or quality of life. Therefore, protecting opportunity implies protection of access to health care services that promote and preserve health. And, it’s hard to argue with the notion that such access should be protected equally.
Access to health care is enhanced by health insurance. As Daniels, Saloner, and Gelpi argue, universal health insurance is a means to this end. But it’s not the only way. The key is to recognize that equality of access is not equality of receipt. The authors are not suggesting that we have a moral obligation to ensure that everyone receive the same amount of health care, merely that everyone have the same degree of access to it.
This more modest obligation would be met in a system that does not cover everyone but extends equal opportunity of access to affordable coverage to everyone. That is, equal opportunity to obtain coverage is a necessary condition for equal access to health care, though some may choose not to avail themselves of that care or that coverage. Put another way, if we are morally satisfied with a regime under which people can choose whether to receive care, we ought to be morally satisfied with one under which people can choose whether to obtain coverage for it, so long as there is equal opportunity of access to that coverage and the care it facilitates.
The distinction is crucial because the ACA was not designed for universal coverage, and it will not achieve it. However, it was passed with the more modest ambition to provide universal access to affordable coverage, the very thing we’re morally obligated to provide.
But, when you go beyond the law’s ambition and consider its actual implementation, there are some problems. It has failed to provide universal access to affordable coverage in at least 2 ways. First, the Supreme Court ruled to permit states to opt out of Medicaid expansion without penalty. Though gradually, more states are expanding their programs, many states still have not. In those states, millions of poor residents lack access to affordable coverage. No matter what institution one wishes to blame, this is a moral failing.
Second, for some consumers, the products offered in the new exchanges are unaffordable, even with subsidies. This is a serious ethical concern, as addressed by Saloner and Daniels.
“[T]he exchanges leave families vulnerable to burdensome out-of-pocket spending for treating health conditions that are costly but not necessarily catastrophic. For example, 25 percent of individuals in the United States have a major chronic condition such as a mood disorder, diabetes, heart disease, asthma, or hypertension. The annual cost of treating such conditions, including visits with specialists and payments for medications, can exceed several thousands of dollars, even with health insurance (Soni 2009). Under the ACA, a family of four with an income around 275 percent of the [federal poverty level] ($64 000 in 2010) would be responsible for premium costs of around $5600 and would not experience relief from cost sharing until it had reached half the family cap, around $6000 in 2010 (KFF 2010b).”
Jed Graham of Investor’s Business Daily recently reported that such affordability concerns have become reality. He documents that some families covered by exchange plans could face out-of-pocket costs as high as 40%. By any reasonable definition of affordable, this is not. This is another moral failing.
So, what can be done to bring policy into better alignment with morality? First, all states could expand Medicaid. Second, Saloner and Daniels suggest that subsidies could be increased for families with higher health care burdens, such as chronic conditions. Third, tax credits, (which now kick in when premiums are higher than a specified percentage of income) could take into account other out-of-pocket costs. Saloner and Daniels offer a final suggestion:
“[E]xchanges could be redesigned to protect specific types of investments by providing income disregards for money that low-income families set aside for paying children’s college tuition, opening a small business, or saving for retirement. An added benefit is that such a proposal would encourage families to increase their assets and to build financial stability.”
All of these approaches would make coverage expansion more expensive, unless they could be offset by policies that would make health system delivery or health insurance more efficient.
Perhaps the moral argument for the ACA was not made fully or loudly in years past. That’s a failing we can now easily remedy. I’ve just done my part. But, having done so, it’s now clear that as designed and implemented, the law is not consistent with what that moral reasoning demands. That too can be remedied, but it will require some changes, potentially at some cost. Do we have the moral fiber to make them?
JAMA Forum: The Moral Case for Affordable Coverage and How Obamacare Fails To Live Up to It
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Comment:
By Don McCanne, MD
Austin Frakt is a highly credible health economist with great values, and a person for whom I have profound respect. But sometimes he thinks too much. He is certainly correct when he states that the design and implementation of the Affordable Care Act (ACA) is not consistent with “what moral reasoning demands.” Where he falls short is in his endorsement of flawed recommendations for improvement.
In conceding that ACA was not designed for universal coverage and will not achieve it, he implies that this is acceptable since our only moral obligation is to provide universal access to affordable coverage. The problem is that no matter how much you modify our existing fragmented, multi-payer system, you can never achieve truly universal access to affordable coverage, much less to affordable health care.
Let’s look at his suggestions. He says that all states could expand Medicaid. Sure, but they aren’t, and the Supreme Court ruled that we can’t make them do it. He says that we could increase subsidies for families with greater health care burdens. Sure, but imagine the administrative complexity assigning a health-care-needs status to each individual and then continually adjusting that status as needs change with time. He says that premium tax credits could take into consideration other out-of-pocket costs. Sure, but which would be allowable and how much documentation would be required? He says that exchanges could be redesigned to protect certain investments such as the children’s college education fund, the expenses of starting a small business, or saving for retirement. Sure, but talk about an administrative nightmare, and the error rate would likely be very great.
He says that these approaches would make coverage expansion more expensive. Sure. Much of the increased cost would be in the waste inherent in adding more administrative complexity to a system that is already uniquely heavily burdened with expensive administrative excesses. He says that these extra costs could be offset by increasing efficiency in health system delivery, but that has proven to be an elusive goal with little gain to date. Besides, wouldn’t we want the gains from increased efficiency to be used to improve health care delivery rather than to add to the administrative waste we already have?
The proper moral argument is to make actual health care – not health care coverage – accessible and affordable for absolutely everyone. This is what a single payer system would do. Tweaking our highly flawed financing system so that more people have access to an insurance card falls far short of the moral obligation that we have to each other. Austin Frakt knows this. He should give up on trying to think up ways to skirt single payer.
