News

OK, I admit it: we made a mistake.

Earlier this year, we were asked if we had ever seen a one-page flow chart of the Affordable Care Act (ACA) from a consumer perspective. We hadn’t seen one—and after much looking, still didn’t—so we decided to create one ourselves.

It seemed like such a simple idea. Hmmm—not so simple in the end.

The reason it’s not so simple is illustrative of the Obama administration’s problem in communicating the ACA: it is, in fact, extremely complicated—but complicated for a reason (more on that later).

It took us several months and many review cycles to prepare our flow chart for publication. When we finally released it, the chart was shared widely via social media, stimulating some interesting discussions—and a very polite question from a financial policy analyst in California, who asked us if we meant to say “less than” rather than “more than” in one of the flow chart’s boxes.

That very good question caused us to review the whole document once more, and we realized the chart needed further clarification in several spots: in particular, areas relating to parts of the ACA that focus on “affordability tests” (where eligibility for subsidies is determined based on both whether or not an employer offers coverage and the cost of that coverage relative to the employee’s income). There are a number of moving parts in that formula, and our efforts to portray them in an understandable way caused us to short-circuit the clarity. In the corrected version, the employer coverage section goes from six boxes to twelve.

OK, so why is it so hard to depict the consumer perspective in a one-page flow chart? To answer that question, it is important to remember that the ACA is as complicated as it is because it builds on the existing system of financing and coverage rather than replacing it.

President Nixon proposed health care reform in 1971 and 1974 that would have fundamentally changed the structure of health care financing in the country, and President Clinton’s plan would also have made that kind of fundamental change. But both efforts failed to get the necessary political support. One of the lessons that President Obama and today’s Congressional leaders took from those past defeats (and subsequent polling data) was the importance of building on the current system rather than replacing it. After all, more than 70 percent of the U.S. population has private coverage and another 15 percent is covered by Medicare; both populations are generally satisfied with their coverage.

In an effort not to disrupt those happy with what they already had, but still meet the goals of expanding coverage and moderating costs, those who drafted the ACA tried to keep all major structures (public and private coverage) intact—with some “corrections”—but no outright replacement. There was also some early hope that Republicans would support the idea of an individual mandate because the idea had originated with the Heritage Foundation (a conservative think tank) during health reform debates under Clinton.

So, in the art of compromise that has characterized our political process (at least historically), the idea was to expand coverage by requiring everyone to have it, retaining a predominantly employment-linked coverage approach, and subsidizing those considered relatively low income but not low enough to be eligible for Medicaid. Making sure that coverage was affordable, while working within a predominantly employment-connected financing system, required a complex formula designed to let the market work—except when it wasn’t “affordable.”

Therein was the challenge. The current American structure of health care financing is not a straightforward system; in fact, it isn’t a system at all. The ACA doesn’t create a unified system either: it fills cracks in the existing structure to address key issues of coverage, cost and quality. As a result, the ACA does indeed create something similar to a Rube Goldberg machine.

But make no mistake: coverage under the ACA is complicated because it reflects what was politically possible. Americans said they did not want radical change. So in the end, the ACA is the system Americans asked for, even if they don’t understand it.

We could have had simple. We could have had a system that reduced complexity, increased coverage, and reduced administrative costs (and put many policy wonks and consultants out of business!). That system could have been called Medicare for All. If the goal was simple and clear and easy to understand, that would have been it. But, until America is ready for simple and clear, our now corrected (we hope!) flow chart is here[CHRT FLOWCHART].