Opinion: The State of the Union—Health Care Cannot Be Ignored

If you weren’t paying close attention to the State of the Union speech, you might have missed the parts about health care. In almost 7000 words of text, a total of 44 words were spent on the topic, a mere 0.6% for a subject accounting for more than one-sixth of the US economy. Medicare and Medicaid received 1 mention each, in the same sentence. Health care deserves greater attention from the president in his most prominent speech of the year.

Surprisingly, the Republican response wasn’t much different. Although cries for repeal of the Affordable Care Act (ACA) garner cheers from some quarters on the campaign trail, no such calls were uttered by Indiana Governor Mitch Daniels. In fact, just as in the State of the Union, the ACA received almost no mention at all.

This absence is conspicuous. It’s not as if health care hasn’t been an important part of previous State of the Union speeches. In 2009 and 2010, more than 7% of the text was devoted to health care reform. Similarly, they were much more central to Republican responses.

It can’t be that health care is no longer an issue. Even 2 years into implementation of the ACA, there are around 50 million Americans who lack insurance. Tens of millions more are underinsured. Studies have consistently found that, compared with other comparable countries, the quality of the US health care system is poor to mediocre. And don’t forget the cost. At around $2.5 trillion a year, the United States has the most expensive health care system in the world. At around 17% of our gross domestic product, it’s also consuming an increasingly unsustainable share of our economy.¹

One reason for the lack of mention in President Obama’s text may be that the ACA is not a very popular law. It’s also possible that, given upcoming Supreme Court cases on the constitutionality of the law, the president felt that there is little to be argued right now.

The avoidance of comment on the ACA was a risky call, however. The law still needs substantial support by policy makers for successful implementation. Many regulations still need to be written and approved. States need to set up exchanges. About a third of states have made little to no progress doing so, perhaps hoping they may not have to. If they lose that gamble, then they will lose the chance to run their own exchange and have to participate in a federally run one. The State of the Union, or its Republican response, would have been an opportune time to remind them and their constituents of the choices they face.

Moreover, it’s short-sighted to think that health care and health care reform won’t be important in this election. Sometime this summer, the Supreme Court is going to decide whether parts or all of the ACA is going to be struck down. Regardless of the outcome, half the country is going to be enraged and the other half energized. The Supreme Court could split the proverbial baby by finding the individual mandate unconstitutional, preserving the rest of the law. This will likely make everyone a bit angry and bring health care reform to the forefront once more, threatening to throw insurance markets into turmoil.²,³

With Republican candidates uniformly promising repeal, should any part of the law stand, health care reform will inevitably consume a great deal of the nominating conventions and the debates that follow. This election stands as the last chance for opponents of the ACA to prevent its full implementation in 2014. Once the exchanges go into play, it will be nearly impossible to dismantle the law. By failing to articulate his defense of the signature accomplishment of his first term, President Obama ceded the debate to the uncertain and likely tumultuous campaign process.

Forgetting the ACA for a moment, the president’s silence about Medicare was deafening. With the passage last year of the budget by Rep Paul Ryan (R, Wis), the Republicans threw down the gauntlet on reform. Altering Medicare from a defined benefit to a defined contribution program over the course of decades, shifting significant costs from the government to individual citizens, and replacing the public program with private ones, his plan would radically change Medicare from the government-run single-payer insurance plan it is today.⁴

President Obama and the Democrats have universally opposed such a plan. But that doesn’t mean that Medicare doesn’t need reform. Congressional Budget Office projections show that Medicare spending will become the biggest item in the federal budget. Its rate of increase is unsustainable. The president’s proposals to “bend the curve,” including a strengthened Independent Payment Advisory Board, accountable care organizations, and payment program reforms, seem equally unacceptable to Republicans.

And let’s not forget Medicaid. The federal government may be able to run deficits, but states cannot. As local budgets get squeezed, Medicaid causes headaches. States aren’t able to cover the rise in health care costs, especially given decreased revenues that accompany an economy barely out of recession. Republicans have called for block grants and significantly reduced spending. Democrats, again, oppose those changes.

Malpractice reform, one area where even President Obama agreed (in last year’s State of the Union address) there were areas to work together, received no mention whatsoever. The amount of savings that may be recouped should malpractice reform be passed is debatable,⁵ but few feel the system isn’t broken. Too many real cases never see the light of day, and too much time, money, and physicians’ angst are spent on cases that are inevitably dropped, withdrawn, or dismissed.

Across the public and private sides of the US health system, change is needed. The problems of access have not been solved. The problems of costs are going to get worse. Everyone must pay attention to quality.

The president chose to ignore these topics in his address. Governor Daniels did as well in his response. However, the American people are not going to ignore them in the upcoming year. The evening of the State of the Union may have been calm with respect to the health care fight, but the storm is coming.