Healthcare providers and insurers were busy implementing healthcare reform in 2014, millions of uninsured Americans gained coverage, and healthcare spending growth remained modest even as partisan warfare over the Patient Protection and Affordable Care Act continued in full force.
At the year's start, the huge question hanging over the ACA was whether the insurance exchanges would recover from their generally disastrous launch and Americans would be able to sign up for coverage. Those doubts were put to rest when customers flooded the repaired marketplaces during the final weeks of the sign-up period, and more than 8 million people enrolled, most with premium subsidies. The tally eventually dipped to 6.7 million through attrition. But it still surpassed the Congressional Budget Office's estimate of 6 million.
As a result, the uninsured rate from 2013 through June 2014 for people ages 18 to 64 fell more than 3 percentage points, to 17%, the Centers for Disease Control and Prevention reported in December. The drop was particularly marked in states that accepted Medicaid expansion. Arkansas and Kentucky saw the biggest declines—10.1% and 8.5% respectively, according to Gallup.
Meanwhile, CMS actuaries reported in December that U.S. healthcare spending grew more slowly than at any time in the past half-century, as Medicare squeezed outlays and Americans sought less care. The nation spent $2.9 trillion on healthcare in 2013, an increase of only 3.6% from the prior year, with spending stuck at 17.4% of the gross domestic product. For 2014, quarterly national estimates put spending growth below 4%. Many experts say the ACA has played a role in the cost slowdown, particularly on the Medicare side.
Despite the ACA's successes, at the end of 2014 the law's future looks uncertain. Congressional Republicans remain committed to rolling back or repealing the law, and their big election victories in November, which won them control of the Senate, increase their power to chip away at the ACA in 2015. The future of Medicaid expansion also looks uncertain to bleak in many of the 23 states that have not extended coverage to low-income adults, as Republicans held or gained governorships and legislative seats.
In a more immediate threat to the reform law, three days after the election, the U.S. Supreme Court decided to hear a challenge to the legality of the premium subsidies in at least 34 states that are using the federal exchange. The King v. Burwell case, based on ambiguities in the ACA's language, raises the prospect that millions of people could lose their subsidies midway through 2015 and have to drop coverage because it's unaffordable.
“It creates a great deal of uncertainty for the future,” said Robert Blendon, a veteran observer of healthcare politics at Harvard University. “A year ago, beyond whether the website worked, uncertainty was not in people's vocabulary.”
Despite those uncertainties, consumer interest has been strong during the second open enrollment, which started Nov. 15, and the federal and state exchanges have functioned more smoothly. In the first month, nearly 2.5 million people selected an exchange plan, and about half were new enrollees.
HHS projected a total enrollment of 9 million to 10 million people for 2015.
For 2015, there was a 25% increase in the number of participating insurers, which offered a larger number of plans, HHS said. The heightened competition drove premiums down in many markets. But many consumers still faced higher rates if they didn't shop around. High-deductible health plans with narrow provider networks were the most common option. Those plans stirred controversy over whether their networks were adequate and their out-of-pocket costs were affordable.
“The public exchanges turned out better than many carriers expected in terms of volume and, more importantly, profitability,” said Josh Weisbrod, a partner at Bain & Co.
HHS Secretary Kathleen Sebelius resigned following the botched HealthCare.gov rollout. But President Barack Obama's nominee to succeed her, Office of Management and Budget director Sylvia Mathews Burwell, easily won Senate confirmation in a bipartisan vote. Burwell installed a respected team of executives to oversee the second open enrollment, which seems to have paid off.
Beyond that, there was little bipartisan agreement on health policy. The partial exception was bipartisan House-Senate legislation to repeal and replace Medicare's sustainable growth-rate formula for physician payments. But that deal collapsed after Republicans and Democrats failed to agree on how to pay for the roughly $140 billion cost. The end result was the 17th consecutive temporary “doc fix” to stave off massive reductions in payments to doctors.