Yesterday, jumping into a discussion an individual who saw their costs rise after ACA, I made a comment about the lack of competition in the Pennsylvania health care market. The person I was responding to had noted that their friend only had two plans to choose.  Pennsylvania has long had an unholy alliance between providers, insurers and government that sustains a poor competitive environment and high prices. UPMC dominates western PA, and just a few insurers compete in many other parts of the state. Our per capita costs are more than 13 percent above the U.S. average. While some of that is our older population, even our Medicare costs per capita are above the national average. My comment wasn’t directly about ACA, but I guess at least one person immediately interpreted it as a harsh criticism of the law–noted health policy blogger Maggie Mahar. Our subsequent twitter discussion was disorienting.

The subsequent reaction by Maggie Mahar included wildly off-base accusations about my politics. (No, I am not a subsidy-hating Neanderthal. I am a registered Democrat, two time Obama voter, and proud of what ACA is and has accomplished). It demonstrated to me that even people well-versed in health policy still seem to miss critical parts of the problem.

To start with the subsidies, they have made a dramatic and immediate impact on improving insurance coverage and access to care for millions of Americans, especially the low to middle income Americans who have been excluded from coverage in the past. Nothing I wrote in twitter or here or in my past suggests anything different.

The progress those subsidies have made and will make in the future, however, is and will be limited by the current high prices and growing high costs of care in America. That’s not support for getting rid of those subsidies. It’s a rational and reality-based recognition that reining in prices and costs are a necessary part of the solution to improving access to health care, too.

It’s widely recognized that a fundamental difference between the U.S. and other health systems is the high prices charged by our health care providers.  A good reference is Gerald Anderson’s 2003 paper from Health Affairs. A just as good and entertaining one is Uwe Reinhardt’s New York Times work. At one point in discussion on twitter Ms. Mahar makes reference to overtreatment being the problem. Yes, there’s overtreatment in the U.S. system. There’s also undertreatment (that’s what the uninsured have received forever). On balance, the difference between us and the rest of the world on a population basis is not that we receive more care.  We don’t.  The difference is we pay more per service received.  That’s, in large part, our cost problem.

And it is those large and rising costs that have to be controlled for those ACA subsidies to reach full effect. Even now, the impact of the subsidies is muted because under the current high prices, a large number of the plans being offered on the exchanges have high deductibles and/or limited networks. The goal is not making sure people have insurance. It’s making sure they can afford needed care.  High deductibles and limited networks that result from high provider prices limit the protection provided by ACA and limit access to some needed care.

And, in the longer term, ACA subsidies will ultimately lose the battle on access to care if prices and cost growth are not reduced.  If health care costs rise in excess of incomes, the purchasing power of those subsidies will be consistently eroded. Plans will have to further narrow networks or raise deductibles to remain affordable. People may have insurance, but the gaps and weaknesses in that insurance will harm access. Governments, of course, could raise those subsidies, but if costs are rising faster than national income, that is also a long run on a treadmill going faster than we can manage.

Support for reducing health care prices and reducing health care cost growth is not opposition to ACA.  In fact, it’s a fundamental part of necessary health reform to support the subsidies in ACA. Massachusetts new effort on price transparency shows one part of what is needed. Vigilance in examining health care consolidation is also needed, as work by Martin Gaynor and others shows. From the federal government to the state government to individual plans and providers, we need to address this part of the problem.

So, Maggie, I’m not your enemy.  I’m your ally.