Is the Affordable Care Act Dead, Alive, or Somewhere in Between?

Since the Affordable Care Act (ACA) became law almost fourteen years ago, much has happened, but not much has changed within the healthcare reimbursement landscape, as the law contemplated. As we address various healthcare industry-related issues in 2024, and it being an election year, a whole array of political ramifications exist. So, is the ACA on life support, or are we headed toward a reimbursement system that emphasizes quality instead of volume?

The Biden administration has attempted to build on the ACA in its three years. For example, enrollment in Medicaid and marketplace-related models is at an unprecedented high. 16.3 million signed up for a marketplace plan in 2023, representing a 50% increase in enrollment since President Biden took office. As of September 2022, an estimated 91 million people were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP), which experienced a 28.6% increase since February 2020. [1]

Aside from these significant changes in participation in such governmental programs, has the ACA movement under the Biden administration really progressed?

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Key Policies the Biden Administration is Seeking to Advance

Not surprisingly, the Biden administration and the Democratic Party have strived to reverse policies adopted by the Republican Trump administration. These have had limited effects on the healthcare industry’s reimbursement structures, and virtually no bipartisan consensus has resulted. Simply stagnation and little progress in moving from “volume to value,” with fee-for-service reimbursement remaining the primary order of the day. Both payers and providers prefer this, and even the American consumer seems to as well, though rising costs and inflation have put further stress on the system. Meanwhile, Social Security and the entire Medicare/Medicaid system continue toward a possible bankruptcy. The politicians must address this in the not-too-distant future. One solution that seems to prevail, especially coming from the Democratic side of the aisle, is eliminating any ceiling on Social Security taxes paid by employers and employees. Current ceilings may be eliminated, wherein no one, regardless of income, will stop paying these taxes based on earnings.

Lest we appear too critical of the current administration, the Republicans have had little positive or substantive responses as to how best to improve upon the ACA. The overall political climate is essentially to leave this matter untouched and proverbially “kick the can up the road.”

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2024 Crystal Ball

If we had a crystal ball to project the future (which we obviously do not), here are some things to consider for the ACA this year.

• Economic pressures. While the economy is vibrant in some ways, many questions linger about how inflation and, in particular, governmental spending tied to the US budget deficits will affect healthcare in general. Clearly, costs are not under control, and the healthcare industry is experiencing comparable, if not greater, cost increases than the rest of the economy.
• Immigration. As more and more non-US residents come into our country, the stress that they place on our healthcare delivery system is at an all-time high. This will continue to place more pressure on those who support these individuals, either directly or indirectly (all US citizens indirectly support those entering our country illegally).
• Hospitals in financial peril. Probably more than at any time in recent history, hospitals are struggling financially. While most are smaller, non-urban, rural hospitals, they struggle to find their way to future survival and viability. More consolidation will likely occur wherein larger hospitals will gobble up smaller ones and institute limited services in those acquired facilities. More patient distribution will be toward the urban hospitals requiring individuals to travel for care or potentially (frighteningly) realize they cannot receive adequate care due to lack of access. The hospital financial crisis is far from over, and these pressures will continue to place more stress on them.
• Physician and other provider shortages. Most specialists and, for sure, primary care providers are close to capacity. Recruitment of all specialties is needed in most places, and provider salaries (both physicians and APPs) are increasing as demand surpasses supply. This will continue to be a major area of concern in 2024 and beyond.
• Fee-for-Service versus Fee-for-Value. As noted above, the ACA aimed to shift the reimbursement paradigm largely from fee-for-service (or fee-for-volume) to fee-for-value. While this has not been accomplished, the goals for this remain. There are numerous attempts to keep this in play, although in reality, payers, providers, and even consumers are not demanding it. Therefore, only tacit support of fee-for-value reimbursement arrangements will likely exist soon. Who knows about the future?

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Future Train Wreck?

We don’t want to paint a negative picture, and we are not pessimistic in general. However, with the stresses, albeit the realities, currently placed upon our healthcare delivery system with no real solutions coming from government or private industry, it is difficult to remain optimistic. So, is the ACA dead or alive? It is, like many things, a work in progress; somewhere in between, but perhaps closer to being on life support.

As we continue to the new year’s experiences and how they affect our US healthcare industry, we are in for a bumpy road. Fasten your safety belt!

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Originally published March 14, 2024. Reprinted with Permission from Healthcare Administration Leadership & Management Journal, Volume 2, Issue 2, pages 42-43, Copyright © 2024, American Association for Physician Leadership, (800) 562-8088; www.physicianleaders.org.