CSA Health Care Interview Series: Interview with Third Way Senior Fellow David Kendall

Posted by Blake Wright on December 02, 2014 at 9:49 AM

As the American health care sector is rapidly changing with the passage and implementation of the Affordable Care Act, CSA’s Director of Policy Andrew Smith conducted a series of interviews with health care experts in order to better understand the future of the health care sector and its impact on American Millennials. Featuring diverse perspectives on these dynamic issues from both sides of the aisle,  Andrew interviewed Manhattan Institute Senior Fellow Avik Roy, Third Way Senior Fellow David Kendall, and Center for American Progress Health Policy Director Maura Calsyn in order to capture some conservative, centrist, and liberal perspectives on the rapidly changing health care sector. Read Andrew’s interview with Mr. Kendall below or his interviews with Mr. Roy and Ms. Calsyn on CSA’s policy blog.

Mr. Smith: What are the biggest takeaways from your perspective after the implementation of the ACA? What succeeded? What failed? Or is it too soon to tell?

Mr. Kendall: The Affordable Care Act is well on its way toward establishing a stable source of coverage that compliments workplace coverage without upending it. It has stabilized job-based coverage in at least three ways:

If you are between jobs, you can get affordable coverage through a health insurance marketplace.

If you have a pre-existing health problem, you can get affordable coverage at a job or through a marketplace and continue working.

If you work for a small business, you don’t have to worry whether the employer offers coverage because you have access to a marketplace.

A good friend, who is an insurance agent and leans Republican, tells me that he is very grateful that many of his clients with pre-existing conditions can now get affordable coverage.  He supports the ACA, but most Republicans and many independents do not. Politics remains the greatest challenge for the ACA. 

Mr. Smith: What are the biggest takeaways from your perspective after the implementation of the ACA? What succeeded? What failed? Or is it too soon to tell?

Mr. Kendall: The Affordable Care Act is well on its way toward establishing a stable source of coverage that compliments workplace coverage without upending it. It has stabilized job-based coverage in at least three ways:

If you are between jobs, you can get affordable coverage through a health insurance marketplace.

If you have a pre-existing health problem, you can get affordable coverage at a job or through a marketplace and continue working.

If you work for a small business, you don’t have to worry whether the employer offers coverage because you have access to a marketplace.

A good friend, who is an insurance agent and leans Republican, tells me that he is very grateful that many of his clients with pre-existing conditions can now get affordable coverage.  He supports the ACA, but most Republicans and many independents do not. Politics remains the greatest challenge for the ACA. 

Despite the partisan opposition, the law is fundamentally bipartisan in its character. Not only was it modeled after Republican Governor Mitt Romney’s health reform in Massachusetts, it was dramatic shift away from all previous Democratic attempts at universal coverage that involved government control of prices. And it follows the policy framework established by Republicans in Medicare Part D, which delivered a public benefit through private plans.

No one knows for sure whether the public’s dissatisfaction with the ACA is more due to the President’s low popularity or with the specifics of his signature achievement. The November election showed lots of discontent with the direction of the country, but so far, Republicans have not won a mandate for an alternative, nor have they even tried. 

Mr. Smith: You write about the need to move past the "tired debate over the Affordable Care Act." What are the biggest problems in health care that still need to be resolved in a post-Obamacare world? What are your recommendations for dealing with them? 

Mr. Kendall: Rising health care costs will continue to vex the federal government, states, consumers, employers, and taxpayers. The recent downtown in cost increases has provided a welcome respite that has helped reduce the deficit and enabled the economic recovery, but health care prices are beginning to shoot back up. A recent report from the Health Care Cost Institute shows medical care prices rose 4 times faster than inflation in 2013.

Health care will continue to be the fastest growing segment of the federal and state budgets. It will swamp the nation’s ability to make investments and control the debt. 

The nation can restrain health care spending without cutting benefits, but we will have to move away from a health payment system that gives providers a fee for every service. This payment system creates an incentive for providers to deliver more care—not necessarily better care. What patients need is better care coordination, more attention to their chronic disease, and a clearer understanding of their health care problems. For example, instead of piecemeal payments, providers should receive bundled payments related to the cost and quality of the care they provide.

Mr. Smith: How do you imagine the politics of health issues will play out? (For example, will Republicans get behind something like Avik Roy's plan to reform the ACA in a market-oriented direction? If not, will they endorse a constructive replacement to the health law? Will Democrats recognize the need for more reform of the health care system beyond the ACA? What kind of reforms would those likely be?)

Mr. Kendall: First, we have to get beyond two key events: a GOP effort to repeal followed by the President’s veto and a Supreme Court ruling on the tax credits offered to Americans who buy coverage on the federal marketplace as opposed to a state marketplace. Both will involve a lot of drama, but won’t change the politics. I deeply hope that Republicans will eventually have constructive conversations around the ACA, but until they have exhausted all avenues to repeal the law, I don’t see them adopting a strategy to replace the ACA.

Mr. Smith: Who are some politicians from both parties you expect to be leaders and innovators on these issues in coming years?

Mr. Kendall: There are numerous leaders on this issue. I think Sen. Ron Wyden and Rep. Paul Ryan will emerge as key figures. They both have the intelligence and the determination to deal with the extraordinarily complex policy and politics of health care. 

Mr. Smith: For college students, how will health policy impact their futures? What are going to be the next major debates on the horizon?

Mr. Kendall: The good news that the provision in the ACA that lets them stay on their parent’s health policy until age 26 enjoys bipartisan support and is no longer threatened by a Supreme Court ruling.  The key question for the college-aged students is whether public policy can reduce the waste within the health care system and redirect those resources to better use while providing better care to all Americans. 

David B. Kendall is a health policy analyst best known for crafting a new progressive agenda for health care. During his previous role at the Progressive Policy Institute (PPI) and its affiliate, the Democratic Leadership Council (DLC), Kendall developed innovative policies for reforming health care financing and delivery. His work has been praised on the editorial page of The New York Times, by national columnists such as Morton Kondracke and James Glassman, and by former Senators Bob Kerrey (D-NE) and John Breaux (D-LA) and Congressman Bill Thomas (R-CA).

Prior to joining PPI in 1994, he served for seven years on the staff of Congressman Michael A. Andrews (D TX) where he held several positions including legislative director and senior policy director. In 1994, he worked extensively with the Jackson Hole Group and Congressman Jim Cooper on major health reform legislation known as managed competition. In 1993, he served on the President's Task Force on National Health Care Reform, and in 1986, Mr. Kendall was a legislative assistant to Congressman James R. Jones (D OK), a former chairman of the Budget Committee. He attended the University of Chicago as an undergraduate.