Michael Gusmano

Professor Michael Gusmano

Michael Gusmano Addresses ‘The State of American Health Coverage’

The article is published in the journal Health Economics, Policy and Law.

Michael Gusmano, professor of health policy in the College of Health and director of the Center for Ethics at Lehigh, addresses “The State of American Health Coverage: The 2022 Elections” in a new article published in Health Economics, Policy and Law. The article is co-authored by Frank J. Thompson, professor of public affairs and administration at Rutgers University.

Gusmano and Thompson have co-authored several articles that examine presidential initiatives to bring about health reform in the United States. In their newly published article, they focus on the landmark Affordable Care Act (ACA), signed into law in 2010, that helped expand health insurance coverage in the United States. They wrote that the Trump administration launched a variety of executive initiatives to undermine the ACA, capping a decade-long Republican campaign to repeal the law. During its first two years, the Biden administration made progress in reviving the ACA through legislative and executive initiatives, they note.

Focusing on the ACA, Gusmano and Thompson investigate the concept of executive federalism, the idea that health and social policies are increasingly shaped through direct negotiations between the White House and states, effectively bypassing Congress, and what this says about the state of the Constitution and American federalism.

They also explore the outsized role that courts have on health policy, and examine the implications of this new partisan context for Biden’s efforts to bolster ACA durability prior to the 2024 presidential election. Gusmano dived further into the details.

How did the Biden administration use legislative and executive initiatives to counteract initiatives to weaken the ACA?

President Biden supported several pieces of legislation that helped to bolster the ACA. First, the Families First Coronavirus Response Act of March 2020 authorized a 6.2 percentage point increase in the federal Medicaid match rate to the states starting on Jan. 1, 2020, and continuing until the end of the federally declared public health emergency. To receive this enhanced match, a state had to refrain from making Medicaid eligibility criteria more stringent or disenrolling current beneficiaries. The Consolidated Appropriations Act (CAA), which was signed into law by President Biden in 2022, phased out the mandate for continuous Medicaid enrollment, and, recently, this has led to a sharp decline in Medicaid enrollment.

Second, the American Rescue Plan Act (ARPA), which was passed in March 2021, increased federal subsidies for those currently eligible for tax credits on the exchanges for the years 2021 and 2022. For 2021 only, ARPA offered additional exchange subsidies for people receiving unemployment benefits. It provided incentives for states to join the ACA’s Medicaid expansion by increasing the federal match rate by five percentage points, from 90 to 95 percent.

Third, the Inflation Reduction Act, which Congress approved in August 2022, extended the American Rescue Plan subsidies for the purchase of insurance on the exchanges through 2025. It also allowed Medicare to negotiate drug prices with pharmaceutical companies.

Along with the legislative efforts to bolster the ACA, the Biden administration restored and expanded funding for advertising and outreach on the exchanges. It issued a regulation to reduce access to short-term health insurance coverage that did not meet the ACA’s quality standards. Finally, the Biden administration also moved to rescind or modify several waivers that the Trump administration had granted states.

You emphasized the role of federalism and the courts in American governance. How do these factors influence the trajectory of the ACA over the years?

Our examinations of ACA implementation politics, including this paper, have noted an increased role for state attorneys general in health policy. Since its enactment in 2010, the ACA has faced more than 2,000 legal challenges in federal and state courts, contesting all or part of the law. This is consistent with what other political scientists have called the rise of the “litigation state,” in which policy debates often spill into the judicial branch.

As we argue in this paper, the outsized importance of the courts draws strength from the vigorous involvement of partisan coalitions of state attorneys general in challenging health policy initiatives.

What are the key challenges that the Biden administration may face in its efforts to bolster the durability of the ACA before the 2024 presidential election, given the new partisan context?

Repealing the ACA does not appear to be as high on the agenda of Republican congressional candidates or the Republican leadership of Congress as it was a few years ago, but the hostility toward the ACA and the Medicaid program have certainly not gone away.

Even if Republicans do not gain large enough majorities in both houses of Congress to enact legislation that would repeal the ACA, a Republican president would have the same opportunities as their predecessors to use executive actions, including the tools of executive federalism, to significantly expand the scope of the ACA. If President Biden is reelected, it is unlikely, without large Democratic victories in Congress, that he would be able to do a lot more to expand the ACA, but it is likely that he would continue to protect it against erosion. It is possible that he may be able to induce a few more Republican controlled states to expand Medicaid by using waivers to provide them with a level of flexibility that would make this a politically acceptable choice.

What are the most significant achievements and shortcomings of the ACA since its enactment in 2010?

This is a huge question. There is no doubt that the ACA succeeded in extending affordable insurance to millions of people. There is an enormous body of literature documenting the effects of the Medicaid expansion and the establishment of health care marketplaces and subsidies on improved access to care. As some of my recent studies have demonstrated, however, the law has done little to reduce racial and ethnic inequities in access to health care.

Although some provisions of the law were designed to encourage greater attention to the social determinants of health, there is little evidence that it has succeeded in doing so. Finally, despite a lot of rhetoric from its supporters about how the ACA would reduce health care spending, I think there is little evidence that it has done so.

The ACA is an insurance law that builds on the patchwork of the public and private insurance system in the U.S. It expanded this system so that more Americans had health insurance coverage. This is a major accomplishment, but it left in place all of the other pathologies of the U.S. health system.

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