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By Alex Ruoff
Nov. 21 — Almost 30 years ago, Jim McDermott joined Congress hoping to change the health-care industry, with an eye to extending coverage to all Americans.
As Democrats in Washington, D.C., face the prospect of their landmark health law, the Affordable Care Act, being repealed during the next Congress, McDermott (D-Wash.) is retiring. But the longtime member of the influential House Ways and Means Committee isn’t worried about his party’s health agenda. He expects the country will return to the ACA shortly after it’s repealed.
“We went through this in Washington [state] 20 years ago when we tried to put together a comprehensive plan and the Republicans took it apart,” McDermott told Bloomberg BNA Nov. 18. “Unfortunately, the American people are going to have to go through it.”
McDermott expects the individual health insurance market, which was greatly expanded under the ACA, to collapse if Republicans successfully lift the health law’s requirement that every American have health insurance coverage. After that, he said, many provisions of the ACA will return.
Republican lawmakers have rejected the idea that repealing the ACA will hurt the individual health insurance market. Some influential lawmakers said recently the individual market is already collapsing and individual plans in many states are unaffordable ( 222 HCDR, 11/17/16 ).
House Speaker Paul Ryan’s (R-Wis.) health agenda promises to bring down the cost of health insurance for most Americans by lifting many ACA regulations starting with the individual mandate. He and President-elect Donald Trump have also promised to keep some of the most popular parts of the law, namely the prohibition against insurers denying coverage to people with health conditions and allowing people under 26 years of age to remain on their parents’ health plans.
A similar cycle of Democrats installing new rules for insurers to cover more people followed by Republicans lifting those rules played out in the state of Washington during the 1990s. Washington has stood as a case study for health policy researchers on the consequences of repealing key parts of coverage laws, and the state’s former policies guided many Democrats, McDermott included, in shaping the ACA six years ago.
The Washington state Legislature in 1993 passed a law requiring all residents to have health insurance and prohibiting health insurers from levying higher premiums on sick people compared with healthy ones. Before the law could be fully implemented, though, Republicans took control of the state Legislature and repealed the individual mandate, which eventually caused the collapse of the local market for individual health plans.
“The main insurers just stopped writing policies because they were losing money,” Aaron Katz, a professor at the University of Washington who helped write Washington’s comprehensive health law, told Bloomberg BNA. “Only sick people were buying insurance.”
By 2000 the state settled on a policy that required insurers to cover most residents with pre-existing health conditions, but installed a waiting period for coverage. Those with expensive conditions and the extremely ill were placed in high-risk pools, insurance plans subsidized by the state.
Washington’s uninsured rate has fluctuated wildly over the past 20 years as a result, according to data from the Centers for Disease Control and Prevention and the Washington State Insurance Commissioner’s Office.
In 1993, roughly 13 percent of Washington residents were without health coverage. By 2010 that figure rose to 16 percent. In 2014, the insured rate had fallen to 8.3 percent, after Washington expanded its Medicaid program under the ACA.
McDermott admits the ACA and Washington’s comprehensive health law are not identical. Washington state didn’t offer subsidies for some purchasing individual health plans and the ACA had years to influence the national insurance market.
But he does expect Republicans to struggle with implementing their ACA replacement plans. Obama’s signature health law brought benefits, such as requirements that insurers cover certain services, that many Americans might not appreciate until they lose them.
“It’s like the dog that caught the bus, that’s what this next Congress is going to be,” McDermott said. “I think they’re going to find themselves in a huge mess.”
Hospital systems and many insurers have thrived under the ACA, particularly in states that expanded their Medicaid programs, McDermott said. Many hospitals saw their uncompensated care costs drop, boosting profits. Democrats could get support from the powerful hospital and insurance lobbies in their fight to keep much of the ACA intact.
How the insurance lobby will respond to ACA repeal efforts is unclear. Many insurers have retreated from individual markets across the country due to lagging revenues and demanded changes to the ACA. UnitedHealth Group Inc., Aetna Inc. and Humana Inc. have all pulled back from many of the Obamacare exchanges and Anthem Inc. has warned it may follow suit ( 213 HCDR, 11/3/16 ).
An ACA replacement will need to support hospitals and insurers, which accounted for a large portion of the Obama administration’s economic recovery plans. In fact, the health sector is now poised to become one of the largest employers in the country, according to the latest jobs report by the Bureau of Labor Statistics.
In 2017, McDermott will watch the effort to repeal the ACA from his home in Washington state. He said he plans to stay in touch with his colleagues on the Ways and Means Committee and to continue to offer his ideas on health policy, although now as an adviser.
“I have a file of 20 years of ideas left over,” McDermott said. “I’m happy to give them over.”
McDermott has been a leading force for Democrats in shaping health policy since he first joined Congress in 1988, Rep. Sander Levin (D-Mich.) told Bloomberg BNA. He was among the first in Congress to seek assistance for Americans infected by HIV and to advocate for reforming the mental health system.
McDermott and Levin headed multiple extensions of unemployment insurance over the past 10 years and created the Temporary Assistance for Needy Families Emergency Contingency Fund, which provided 160,000 subsidized jobs.
He advocated for a single-payer health system—where the government or a public-private partnership pays for all health services—and believes the country will ultimately embrace the idea, likely after Trump is no longer president.
Rep. Lloyd Doggett (D-Texas), who’s expected to take McDermott’s spot as the leading Democrat on the House Ways and Means health subcommittee, called McDermott a tireless advocate for the needy.
“Because of Jim’s service, more Americans live longer, live better, live healthier, more productive lives,” he said in a statement provided to Bloomberg BNA.
McDermott hopes to teach political science at the University of Washington to share his lifetime of experience as a legislator. He also plans to write his own memoir, a job he won’t trust to anyone else.
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