USC Price School of Public Policy

Schaeffer Center experts examine policy solutions addressing future of health care

April 23, 2017

By Matthew Kredell

With one attempt by House Republicans to repeal the Affordable Care Act defeated and another soon to come, the USC Price School of Public Policy hosted a timely conversation on the future of health care on April 17.

“This is a pivotal time for health care,” said USC Price Dean Jack H. Knott. “An effort was made to repeal the Affordable Care Act, which failed, but it’s re-emerged recently in terms of an effort once again to regroup and change the ACA. It’s involved some very interesting political dynamics. Many members of Congress faced strong opposition in their townhall meetings, so there’s a constituency out there that’s benefited from it. The insurance companies are divided on it. Some states don’t have very good options, and the ACA is in kind of a risky situation.”

The panel featured four faculty members from the USC Schaeffer Center for Health Policy & Economics – Dana Goldman, Neeraj Sood, Julie Zissimopoulos and Erin Trish. The event was part of the Price School’s post-election forum series.

Government’s role

Photo by Deirdre Flanagan More photos available on Flickr »

Trish, whose work focuses on the impact of the ACA on insurer and provider markets, noted that there are short- and long-term debates surrounding health care. In the long term, the debate fundamentally centers around how much the government should be involved in health care.

In the short term, Congress needs to pass a continuing resolution for funding of the federal government, and in doing so it will decide whether it’s going to continue funding some important payments to insurers, called cautionary reduction subsidies, and whether they’re going to commit to enforcing the individual mandate.

“Both have very fundamental consequences for insurers and how this market is going to function in the next few years,” Trish said. “There’s a lot of uncertainty being fostered by politicians right now, and it’s making it very difficult for insurers to commit to continuing to exist, operate and sell policies.”

Equity challenges

Photo by Deirdre Flanagan More photos available on Flickr »

Across states, equity issues have arisen in terms of access to vibrant insurance markets and adequate coverage, agreed the panelists. Though it was unclear what the path forward was for reducing this inequality.

“We’ve had states who had the option to expand [Medicaid] and chose not to, and now we’re in a situation where we have extreme inequality across many different areas of the country,” Zissimopoulos said. “Just because I was born in Kentucky or Tennessee, should I not have the same options for health care as someone born in Southern California?”

Trish noted that 21 percent of people who purchased insurance on the exchanges had access to only one insurer.

“I’m concerned that, in 2018, we’re very likely going to have areas that have no insurers willing to offer a plan,” Trisch said. “That will leave a huge void, and what will we do? The ACA doesn’t offer any fallback options.”

Goldman and Sood said the differences across states could provide for testing grounds for insurance design and policy which, in the long run, could give insight into possible solutions to issues of competitions and access to care.

Fiscal sustainability

Photo by Deirdre Flanagan More photos available on Flickr »

Knott brought up the issue of sustainability. As baby boomers age, health care has the potential to bankrupt the government.

“The issues with health care spending are not around people spending a lot on health insurance,” Zissimopoulos said. “It’s end-of-life care and that it’s extremely expensive to prolong life.”

She noted that if health care dollars could be funneled from end-of-life care into prevention and early childhood, it would solve the sustainability issue.

Sood added that a very high portion of people now die in hospitals, which wasn’t the case 50 years ago.

“I think a lot of it is having a change in conversation — that we’re spending dollars where not fruitful,” Sood said. “No one wants to have this difficult conversation that we’re spending too much money making people live longer just because we can, not because it’s the right thing to do.”

Goldman, director of the Schaeffer Center, agreed that sustainability should be a key part of the health care reform conversation. He suggested one solution is having individuals pay for extra care above and beyond what is necessary to help reduce waste in the health care system while improving access to care that is high value.

To get to a sustainable solution, the crux of the policy conversation might need to fundamentally shift, he said, from asking the “how do you insure everyone” to “how do we improve population health.”