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Obamacare’s Point Guard

Credit: Jon Chase

A parley with DeParle

Nancy-Ann DeParle ’83, whose nearly four years in the Obama White House included serving as deputy chief of staff for policy until this past January, is best known for her role in the passage of the Patient Protection and Affordable Care Act, better known as Obamacare. As director of the White House Office of Health Reform from 2009 to 2011, DeParle was instrumental in the enactment and implementation of that historic legislation. During the spring semester, DeParle, a health policy expert who previously served in the Clinton administration, was a lecturer in law at HLS, co-teaching with Cass Sunstein the seminar Selected Problems in Regulatory Policy. She is also a guest scholar in economic studies at the Brookings Institution in Washington, D.C.

Bulletin: Do you see the passage of the Affordable Care Act as a pivotal moment in American history?

DeParle: I do—this is something that presidents of both parties, going back to President Theodore Roosevelt, have tried to achieve for our country. It fills a gaping hole in our social safety net by providing universal access to affordable health coverage, and it does it in a uniquely American way: requiring personal responsibility and building on private and employer-based markets. Now, all Americans will have health security, even if they lose their jobs or get sick.

What do you hope it will mean for the country?

The Affordable Care Act will achieve President Obama’s vision of ensuring that all Americans have access to affordable health care. Affordable is a key word: The president is committed to bringing down the cost of care and improving the quality so that we are getting our money’s worth. And getting everyone in the system means we can almost eliminate the “hidden tax” that families with coverage were paying to cover the emergency room costs of people without insurance who got sick. We’ll also get rid of some of the worst insurance practices like pre-existing condition exclusions, which essentially made it impossible for people who are sick to afford health insurance.

What is the biggest misunderstanding about the ACA that you encounter?

There are lots of misunderstandings! One big one is that the legislation was not bipartisan. In fact, although none of the Republicans in Congress chose to vote for final passage, there were many Republican ideas included—including the principle that everyone has a responsibility to get health insurance if they can afford it, the so-called “individual mandate.” There are dozens and dozens of policies that were included in the law that came from Republicans in Congress. Another big misconception has to do with costs. You often hear critics saying that the law will increase the costs of health care and “explode the deficit.” That is just plain wrong. The nonpartisan experts who “score” the cost of all legislation, the Congressional Budget Office, concluded that it will slow the rate of growth of health care costs over the coming decades and reduce the deficit. Yes, providing tax credits that help 30 million more Americans afford coverage will cost billions of dollars, but we are also saving billions of dollars through reforms to Medicare and changes to the health care delivery system that put more focus on outcomes and value. And we have already begun to see results in record-low growth in health care spending. For the period from 2009 to 2011, health care spending grew at the lowest rate in the 51-year history of record keeping on health care spending.

And how are those savings attributable to the ACA?

The recession probably started the slowdown in health care spending, but it has continued into the recovery, and there’s reason to believe that early responses to the Affordable Care Act are responsible for reinforcing this trend. For example, under the law, insurers that want to raise rates by 10 percent or more must submit them for state review to determine whether they are “reasonable.” This policy has resulted in rates that were on average 20 percent lower than originally requested. And the law’s requirement that insurers spend 80 percent of premium dollars on health care services, or pay a rebate, resulted in more than $1 billion in rebates to consumers in 2012. Finally, the law includes policies that incentivize hospitals to lower preventable readmissions; these incentives were introduced in October 2012 and have already caused the hospital readmission rate to decline.

What role, exactly, did you play in the ACA?

I was counselor to the president and director of the White House Office of Health Reform. The president says I was his “point guard,” and I like that position! But passing the Affordable Care Act was the ultimate team sport—and our team included not only my colleagues at the White House and [Health and Human Services], but Senate Majority Leader [Harry] Reid and his colleagues and then House Speaker Nancy Pelosi.