Redefining the costs – and benefits – of health care reform

The cost of the Affordable Care Act continues to stir controversy. David Walker’s recent column in USA today highlighted a provision of the ACA that has received little attention to date. Walker, the former comptroller general of the U.S., noted that under ObamaCare, many cash-strapped state and local governments could shift the cost of health insurance for current and future retirees to federally subsidized health insurance exchanges. For states struggling to balance their budgets, and for municipalities teetering on the edge of bankruptcy (as several communities in RI have been in recent years), this provision of the ACA may be too good to pass up. If a significant number of states and local governments take advantage of this provision, however, the cost of the ACA will quickly outstrip even the most conservative projections. Cries of an emerging fiscal crisis will inevitably follow, leading to calls to scale back federal support, reduce coverage, or trim benefits.

Walker’s analysis is offers reformers with a chance to reframe the impact, and importance of the ACA. Health insurance exchanges, in short, could be defined as a lifesaving prescription for precarious state and local government finances. Reframing the debate over reform to focus on the benefits of the law for state and local governments could mobilize support for the law from the grassroots, as fiscally strapped communities across the nation seize upon a new method of intergovernmental cost sharing. The cost of the ACA would undoubtedly rise, but reformers could tell a new policy story that highlighted the benefits of  additional spending as a creative form of tax relief for hard hit local taxpayers or as a means of averting painful cuts in state and local services. Either notion could bolster support for reform, which continues to lag in the polls.

If supporters of health care reform do not address this issue, opponents certainly will. Rising costs will be defined as further proof that the ACA is unaffordable, and calls for repeal will intensify. As Walker notes, as we approach the implementation of health care reform, “we should recognize both the risks and the opportunities – including what could unfold at every level of government – and be prepared for the results.” Since policy debates revolve around storytelling, supporters of reform must not forget that the meaning of rising costs is not fixed. Costs can be defined as a crisis, or as an investment. How they are defined will depend on the persuasiveness of the policy stories told in the public square.


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