Health Care Reform 2.0:
Fulfilling the Promise of the Affordable Care Act
JACOB S. HACKER
Arnold Dorsett was an American success story. An air conditioner repairman, he earned almost $70,000 a year, owned a good home in the suburbs, and was married with three children. He was also, it turned out, the father of a young boy who was sick and getting sicker.
Zachary, his oldest child, had not been healthy since his birth. But it was not until Zachary was eight that he was diagnosed with an immune system disorder that promised even bigger medical costs down the road. By then, the bills had crushed the family’s finances. Despite having health insurance and refinancing their home, the Dorsetts had run up nearly $30,000 in outstanding credit-card balances and could no longer make their car or mortgage payments. In March 2005, they filed for bankruptcy, becoming one of the roughly two million households filing that year. The choice was not easy. “I make good money, and I work hard for it,” Arnold Dorsett said. “When I filed for bankruptcy, I felt I failed.”1
For years, the health care insecurities of millions of ordinary Americans like the Dorsetts were seen as insoluble in our polarized partisan climate. In 2010, however, the U.S. Congress passed and President Barack Obama signed the Patient Protection and Affordable Care Act (hereafter, ACA).2 A remarkable policy breakthrough, the law involves: (1) extensive new regulation of private health insurance, (2) the public creation of new insurance-purchasing organizations called “exchanges,” (3) the reorganization and expansion of Medicaid for the poor, and (4) major reductions in spending growth within and substantial changes to the Medicare program for the aged and disabled.3 According to the Congressional Budget Office, more than 30 million Americans will be newly covered by 2019.4 In addition, new federal subsidies for coverage, greater economies of scale in administration, and new insurance rules that prohibit price discrimination against higher-risk patients will substantially reduce the cost of insurance for those who buy it through the exchanges.
To be sure, the ACA falls well short of the international health policy standard of universal coverage and robust efforts to restrain medical costs. The affluent democracy closest to us in terms of the structure and history of health insurance,