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This chapter surveys the supply, demand, and market for health care and health insurance. It concludes that a much less regulated system is possible and necessary. Cost control and technology improvement must come from disruptive competition from new suppliers, as it has in airlines, retail, Internet, and other successful industries. People must direct their expenditures at the margin and feel the benefits and costs of their decisions. Individual, portable, guaranteed renewable insurance can then emerge, addressing the pathologies of today's insurance markets. Current law and regulations rather than fundamental market failures are the main reasons a healthy market does not emerge and why a regulatory approach must fail. The chapter concludes by addressing common objections to market-based health care and insurance.

This chapter explores the questions of whether the benchmark approach to determine essential health benefits under the Affordable Care Act (ACA) is a lawful exercise of the Department of Health and Human Services' (HHS's) authority under the ACA and whether HHS's announcement of the benchmark approach through an Internet bulletin allowed the agency to sidestep the very administrative procedures that typically serve to constrain the exercise of agency discretion. The authors conclude that the approach likely will be upheld in the event of a challenge, although HHS may have approached the limits of its discretionary authority, and that the agency's use of guidance documents instead resulted in a process that was more open to public scrutiny and external oversight than conventional rulemaking would have been.

This chapter discusses whether and how payment policy can be an effective tool for improving health care delivery and whether past and present payment reforms will lead to better and more affordable health care. Focusing on Medicare, the chapter sketches out the theoretical framework that health economists use to examine provider payment and summarizes the empirical tests of this theory. It then summarizes the evolution of Medicare from cost-based to prospective reimbursement and its entry into value-based purchasing and assesses whether payment policy is making progress. The chapter concludes that on the whole, efforts to transform health care by mobilizing or redirecting competition through consumers are problematic owing to the limits of patient expertise and hidden information and actions by providers. Finally, addressing the question of whether it is possible to get payment “right,” the chapter concludes that as long as payment for physician services is based on a fee schedule and each provider is in its own silo, cost control will remain extremely difficult.

This chapter concerns the impact of the Affordable Care Act (ACA) on the market for commercial health insurance. The analysis is conventional in that it considers whether and how the ACA can address failures in the market for commercial health insurance. The analysis is unconventional, however, in two respects. First, it emphasizes important but often overlooked heterogeneity in commercial health insurance markets. Second, the focal insurance market failure is neither moral hazard nor adverse selection. Rather attention is focused on search frictions. Search friction–induced inefficiencies are primarily found in the small group and individual market segments, where the presence of moderate search frictions significantly increases insurer market power as well as insurance member turnover. The analysis suggests that various features of the ACA may improve efficiency by offsetting distortions arising from frictions. Specifically, there are potential gains from thinning out the right tail of the distribution of prices, simplifying search, limiting adverse selection, and encouraging investments in future health.

This chapter reviews regulation in the health care market under the Affordable Care Act (ACA). It begins with a description of the difficulties inherent in health care insurance markets. A review of the work of Rebitzer, Taylor, and Votruba follows, which is criticized on the whole for overstating the gains from regulation. Specifically, the chapter questions Rebitzer's claims of informational advantages that the insurer has over the insured, that a high turnover rate is evidence of latent market imperfection, that a public agency has the expertise to operate successfully in this market niche, and that the proliferation of consumer health care options poses an impediment to successful market operation. The chapter suggests that restrictions on entry, mandates for minimum essential benefits, privacy regulations, and the inability of private institutions to contract out of the standard-issue terms for medical practice be removed. The chapter then cites the ways in which the ACA deviates from standard insurance principles and concludes that the government's new marketplace metaphor downplays both the massive regulations and the subsidies built in to the ACA exchanges, which negate the benefits that ordinarily derive from organizing voluntary exchanges.

The introduction to this multi-author volume describes the provisions of the Affordable Care Act, particularly Medicare expansion and the individual mandate. It describes the controversy over the statute and the outcome of the case NFIB v. Sebelius, which the United States Supreme Court took up in 2012 to address the question of whether the individual mandate violated Article I of the Constitution and whether the Medicaid expansion impermissibly coerced the states. A joint conference of the University of Chicago Law School and Medical School on health reform was convened to discuss the case, and the papers presented there form this book. The chapter outlines the five sections of the book and gives a brief synopsis of every chapter.

Tiffany D. Joseph’s chapter examines how stratification of access by immigration status effectively undermined a “universal” health policy. While the ACA only extended coverage to U.S. citizens and eligible documented immigrants, Massachusetts pursued a universal health care system at the state level and offered coverage to all residents, regardless of documentation status. Despite this policy that aimed for inclusion, immigrants in Massachusetts were still more likely than non-immigrants to remain uninsured. Joseph interviewed Brazilian and Dominican immigrants, health care professionals, and immigrant/health organization employees to find out why immigrants remained uninsured. She identified immigration-related, health care system, and bureaucratic barriers that prevented individuals from effectively accessing care. Massachusetts serves as both a model and a cautionary tale for ACA implementation, with barriers exacerbated for immigrant, low-income, and minority populations.

Jessica M. Mulligan’s chapter draws on the concepts of “dog whistle politics” and white resentment to make sense of repeated attempts to repeal the ACA and disrupt its implementation. This chapter examines the different meanings and impacts of the law for differently situated individuals and families, some of whom fell into the “coverage gap” created by red states’ decision not to expand Medicaid. She concludes that there is no shared sense of the social created through the law, which has impacted its success. Instead, people’s experience of health care reform, and potentially enhanced health care access, is mediated by a politics of resentment, eligibility, and actuarial categories, past experiences with insurance and illness, and attempts to care for loved ones.

Susan Sered, author of the seminal work Uninsured in America: Life and Death in the Land of Opportunity (2005), returned to the same communities to learn how the people she originally interviewed were faring after the implementation of the ACA. Not a single person she interviewed had remained in the same coverage status for more than a few years at a time. Even with insurance, health care was hardly affordable for many. Most important, geographically driven health disparities had been exacerbated by the 2012 U.S. Supreme Court ruling, leaving large numbers of people to fall into the “coverage gap.” The existence of these gaps, together with the inconsistent nature of coverage and the absence of a human rights ethos, created barriers and resentment, with many people feeling that other categories of people received greater benefits.

Emily K. Brunson’s chapter examines how the ACA has unfolded in Texas, a state with significant popular and political sentiment against the law despite being home to the highest percentage of uninsured persons in the nation. Presenting longitudinal case studies of three previously uninsured women—some of whom were able to access insurance coverage following the ACA and some of whom fell into the coverage gap—Brunson shows how each person struggled with issues of choice, responsibility, and risk in relation to their health care. The chapter also considers how social class and gender affected these women’s experiences of the ACA. Brunson concludes that while the ACA has improved health care access and health outcomes for some Texans, it has also deepened inequalities by increasing stratification based on social class.

Cathleen E. Willging and Elise M. Trott argue that politically driven processes of the past have shaped the current context of mental health care delivery in New Mexico. Provisions of the ACA, including the expansion of Medicaid and outreach to underserved populations, offered the possibility of improving access and services for New Mexicans struggling with unmet treatment needs. However, as the authors argue, public stewards manipulated key ACA provisions to propagate unsubstantiated allegations of waste, fraud, and corruption against safety-net service providers. This chapter shows how public-private partnerships in the Medicaid arena, discourses of transparency, and technologies of accountability can engender truthiness claims, obscure vital information, destabilize a behavioral health care safety net, and deny low-income citizens care. They argue that scholars have the responsibility to attend to the “total bureaucratization” of government-funded health care systems that also allows such abuse of authority.

Mary Alice Scott and Richard Wright’s chapter explores the intersections of seemingly opposing understandings of health—as a “right” or a “responsibility”—in health care professionals’ commentaries on ACA implementation in a formerly free clinic in southern New Mexico. The concepts of co-responsibility and of patient engagement—increasingly central to health care and other social programs globally— were reflected in staff framing of health care problems, clinic activities, and conceptualizations of patients. Patient engagement requires motivating patients to increase participation in their own health care and empowering them to develop self-efficacy. As this chapter shows, there is often a mismatch between provider expectations of shared responsibility and the highly constrained actions of patients, who in this study confronted structural barriers including being homeless, lack of regular transportation, and undocumented immigration status.

Jessica M. Mulligan and Heide Castañeda’s conclusion evaluates why the ACA remained so controversial years after its passage and presents four lessons learned from the ethnographic studies collected in the book. The authors conclude that people in the United States want and need affordable health insurance coverage. However, stratified approaches to expanding access have the result of generating resentment. Coupled with difficult enrollment processes and barriers to accessing coverage, the law became unpopular and unusable for many. Finally, the outright exclusion of groups such as immigrants—to appeal to nationalists—had direct impacts on the law’s success. These lessons are best understood through the frameworks of stratified citizenship (how different groups are viewed as deserving based on a gradation of rights and opportunities), notions of risk, and the devolution of responsibility onto individuals.

The chapter begins with an analysis of the ACA for what it is: the realization of an approach to health care reform that traces its origins to the conservative framework for health care reform once advanced by the moderate faction of the GOP and also the Heritage Foundation in its more moderate past. The policy aims, strategies, and specific provisions of the ACA are then critiqued in accordance to the principles of a national health care policy that would be consistent with the realization of democratic citizenship, as explicated in the first two chapters of the book. The chapter then concludes with arguments in support of a perspective of the ACA as a flawed but essential stage in an evolutionary policy progression that propels the nation’s health care system further toward the more radical and fundamental health care reform that is requisite to both the preservation of democratic governance, and the advancement of a more democratic society.

This chapter discusses discontinuity and how it became the main focus of the ACA in its theoretical and experimental research efforts concerning lift. The immediate research aim of the ACA was to provide a mathematical analysis that would predict the forces exerted on a flat or curved plate immersed at an angle to a flowing fluid. The plate was to function as a simple model of an aircraft wing, and the mathematically idealized fluid, necessary to perform the calculations, was to act as a model of the air. To calculate the forces, researchers needed a precise and quantitative picture of the flow around the wing. For the British, the best available guess was provided by Rayleigh's important work on discontinuous flow, which appeared to the ACA as the rational place to start. This chapter describes this work and, in later sections, contrasts it with the ideas about lift put forward by the leading representative of the “practical men.” .

This chapter lays the foundations for an explanation of the negative response to circulation theory. Given that the circulation theory later came to be accepted as the correct account of lift, this insistent rejection has long been seen as a puzzle. By the beginning of the Great War the British experts on the ACA who were responsible for research in aerodynamics had effectively abandoned the discontinuity theory of lift. There was, however, a known alternative: the circulatory or vortex theory that had been developed by Frederick Lanchester. It would be reasonable to expect that this theory would now become an object of some interest even if it had been ignored at the outset of the ACA's work when they had concentrated on Rayleigh's achievements, but, rather than turning to the circulation theory, the ACA again treated it as if it were of no merit.

This chapter provides non-specialists with a guide to the major provisions of the Affordable Care Act (ACA), their logic, and the federal budgetary implications. The ACA represents the most significant overhaul of the US health care system since the establishment of Medicare and Medicaid. The ACA does two things: First, it fundamentally shifts the social contract in the United States. Starting in 2014, individuals will be required to have health insurance; in return, the federal government will significantly expand low-income health insurance subsidies. Second, it significantly rebalances the financing for Medicare by reducing the growth in outlays and increasing Medicare taxes paid by high earners.

This chapter discusses the two features of the Affordable Care Act (ACA) which have particular economic salience: (1) taking steps to insure all Americans and regulating insurance companies so that can happen; and (2) reforming the financing and delivery of medical services. An estimated 47 million people in the United States lack health insurance coverage, and without reform, that figure is projected to rise to 54 million by 2019. The first goal of the ACA is to extend insurance coverage to as many of those individuals as possible. To make insurance accessible, the ACA creates a set of regional health insurance exchanges to certify plans, collect and process contributions, ensure that insurance products are standardized, and distribute risk-adjusted payments to plans. The ACA also mandates that individuals either buy insurance or face a penalty of the greater of $695 per person or 2.5 percent of income. The ACA also attempts to rectify inefficiencies in the delivery of medical care, including the provision of too much care acute settings; underutilization of preventive care and chronic care; and excess layers of administration and wasted resources.

A key component of the Affordable Care Act (ACA) is the creation of state-based health insurance exchanges, which have the potential to substantially improve the functioning and expand the reach of the private health insurance market. This chapter describes salient features of the current market for health insurance and explains how the exchanges will build on this system by altering incentives for individuals, employers, and insurers. The U.S. private health insurance market has been dominated by employer-sponsored insurance (ESI). In 2009, more than 90 percent of the 172 million non-elderly individuals with private health insurance obtained it through their, or a family member’s, employer. Individuals without ESI coverage can buy private health insurance on the individual market, though without the tax subsidy ESI enjoys. Additionally, individuals with existing health problems often find it difficult or impossible to obtain coverage at affordable rates. The ACA will increase health insurance coverage beginning in January 2014, through two channels: First, Medicaid eligibility will be extended to individuals with incomes up to 133 percent of the federal poverty line (FPL). Second, the creation of state-based health insurance exchanges will allow individuals to select from qualified health plans operating in their area of residence.