Patient Protection and Affordable Care Act - Research Paper Example

Patient Protection and Affordable Care Act Introduction The productivity of a nation depends on the kind of healthcare strategies implemented to safeguard the lives of its citizens. In the contemporary world, changing economic times have made it impossible for a high percentage of individuals to afford the high costs of care. Rising unemployment rates have also made it difficult for a huge percentage of individuals all over the world to access employer-based insurance. Based on these challenges related to accessibility of affordable quality and inexpensive health care, the United States enacted a law referred to as Patient Protection and Affordable Care Act (PPACA) with the main objective of increasing access to health care insurance for all American citizens and all other individuals residing in the United States legally. This paper explicated the PPACA, offers definitions of small, medium, and large businesses with reference to PPACA, and expounds how the PPACA will impact small, medium, and large businesses. In addition, this paper brings into light the impact of PPACA on the current and future employees in small, medium, and large businesses. Patient Protection and Affordable Care Act (PPACA) Patient Protection and Affordable Care Act (PPACA) is a health care reform act officially signed into law by Barrack Obama, the current president of the United States (Timby and Smith 4). PPACA is also referred to as Obamacare. This act was drafted with the main objective of making available a cost effective or inexpensive health care to individuals in the U.S. who until that time could not afford health care insurance. Statistics from the Centers for Disease Control and Prevention (CDC) cited by Timby and Smith shows that "Prior to its passage, approximately 47 million Americans had no access to healthcare, and another 30 million had inadequate healthcare coverage" (4). It is of significance to note that those individuals already covered by healthcare insurance before the enactment of PPACA are likely to observe only slight changes in terms of their health insurance coverage. Estimates explicated by Timby and Smith shows that approximately 32 million individuals in the United States were anticipated to have healthcare coverage by the year 2014 as a result of Obamacare (4). There are a number of issues stipulated in the PPACA act. Firstly, the act obligates individuals in the U.S. who can afford health insurance to pay for their cover or otherwise pay a fine (Timby and Smith 4). Secondly, access to healthcare insurance was made effortless and also cheaper (Timby and Smith 4). Thirdly, the act offers protection for individuals paying insurance cover against exploitation by insurance companies (Timby and Smith 4). To achieve this, the act focuses its attention on minimizing the amount of control enjoyed by insurance companies in regard to healthcare. Fourthly, the act was aimed at decreasing the cost of overall health care in an effort to make it affordable to all American. Additionally, the act focuses on eradication of inequity and prejudice on health care provision on the basis of individual characteristics such as gender, race, skin color (Timby and Smith 4). Defining small, medium, and large businesses with reference to PPACA Blumberg denotes a small business as having employees or workers not exceed fifty (1). Blumberg similarly elucidates a medium business or what he refers to as a 'slightly larger employers' as a business having a minimum of fifty and a maximum of one hundred employees (2). A large business as defined by Blumberg is a business with more than one hundred employees (3). How PPACA will impact small, medium, and large businesses Small businesses Under the PPACA law, small businesses stand better chances in terms of benefits. Blumberg posits that the Obamacare legislation does not oblige or compel small businesses to pay for their employees' health insurance (1). Nevertheless, the legislation present support or aid to small business in terms of finances in order to help them to continue or start contributing to their employees' health insurance covers. This support according to McMorrrow, Blumberg and Buettgens is provided through tax credits (3). It is worth noting that these tax credits may possibly cover a maximum of 35 percent of the total amount of money given by an employer as health insurance premium. The law also requires small businesses that have resolved to contribute to their employees' health insurance coverage to set the waiting period to maturity of compensation to a period of utmost ninety days (Blumberg 1). Additionally, the PPACA act requires small businesses contributing to their workers' health insurance coverage to also provide parallel coverage for their workers' children until the age of 26 years. These requirements according to Blumberg could potentially contribute to an increase in insurance premiums particularly to small businesses whose insurance contributions are not in conformity with the required standards (1). Small business that have resolved to contribute to their workers' insurance coverage are also excused by the PPACA act from the rules and guidelines governing health reforms under the new act (Blumberg 2). However, this immunity only covers for health insurance policies that were purchased before Obamacare was signed into law on March 23, 2010. Though Obamacare has not obligated small businesses to pay insurance policies for their employees, the act has provided options for them through government regulated marketplaces of insurance plans referred to as State-based Small Business Health Options (SHOP). Government-regulated marketplaces have a lot of benefits to small businesses. For instance, these government-regulated marketplaces were anticipated to decrease organizational expenses or overheads in small businesses, and also present a structured, well planned, and ordered insurance marketplace that support and encourage competition (Blumberg 2). Conversely, these government regulations puts into practice strategies or policies that guarantees the security of individuals, and also prevents any errors that may arise (Blumberg 2). Blumberg additionally posits that government regulated marketplaces also makes available relevant information to individuals in order to help them make informed decisions when choosing the kind of health insurance policy to purchase (2). In a nutshell, the government-regulated marketplaces for insurance policies in small businesses are imperative as they increase accessibility and comprehensiveness of health insurance coverage for small businesses. Employees in small businesses who have more health care needs are also anticipated to benefit from the PPACA. Under this healthcare act, employees in small businesses who purchased health insurance policies after the signing of the act into law, and have lower health care needs, will have to share the costs of healthcare in relation to insurance coverage with those with higher needs. This is what is explicated by Blumberg as risk pooling (2). In this regard, individuals with lower health care needs will have to pay higher healthcare insurance premiums as compared to before the law was enacted. However, lower organizational expenses will help counterbalance a certain percentage of the higher premiums. Individuals with lower health care needs in relation to small businesses will also have long term benefits as they will benefit from similar coverage at affordable costs even after retirement or when they develop health conditions that necessitate higher healthcare costs in future (Blumberg 2). Medium businesses According to Blumberg, medium businesses "will be assessed financial penalties if their workers obtain subsidized health insurance coverage through the new health insurance exchanges open to those without employer-based coverage" (2). Before outlining the fines that could be imposed to medium sized businesses under the PPACA, it is of significance to posit that employees in medium businesses may acquire financial assistance from the government to cover for their health insurance if their places of work do not have any affordable health insurance plans for them. However, the PPACA imposes fines for medium businesses whose workers benefit from any government assistance. To explicate this statement, business owners who fall under the medium sized businesses will have to pay a fine of $2000 for every permanent employee apart from the first thirty if they fail to purchase health insurance policies for their employees, and any worker benefits from financial support intended for small businesses (McMorrow, Blumberg and Buettgens 4). Similarly, if a medium sized business owner purchases health insurance plans for his or her employees and any employee benefits from the government-regulated insurance plans intended for small businesses and individuals without access to health care, he or she will have to pay a fine of $3000 for every worker who has benefitted from the government regulated plan, or a $2000 fine for every permanent worker, whichever is lesser (McMorrow, Blumberg and Buettgens 4). Medium sized businesses, according to Blumberg, are also given immunity against the new rules that were introduced with the enacted of Obamacare for all health insurance policies or plans purchased before the signing of the act into law (2). This means that all policies or plans purchased after the signing of the act into law are subject to all rules and guidelines of the act, including penalties. In this regard, pooling of risk will also benefit individuals with more health care needs as they will have to share insurance costs with those will lower health care needs, similar to small businesses. Large businesses Compared to small businesses and medium sized businesses, large businesses are more likely to purchase health care policies or plans for their employees. In fact, Blumberg asserts that "98 percent of employers with 100 or more workers offered insurance in 2009 according to the Medical Expenditure Panel Survey-Insurance Component" (3). Therefore, PPACA is projected to affect large businesses the least. Fines are also imposed on large businesses when any of their employees purchases a health care insurance plan under the government-regulated system designed for small businesses. If the number of employees exceed two hundred, then the employer is obligated to routinely purchase policies for the all permanent workers annually (Blumberg 3). Based on this requirement, large organizations therefore are more likely to spend more money on health insurance for their employees as compared to small and medium sized businesses. Large businesses are given an option by the PPACA to either provide affordable health insurance plans for their workers, or otherwise pay a fine every year for failing to conform with the requirements of the new act (Blumberg 3). However, they are less likely to pay the fines since they are more likely to have a higher worker involvement or membership in their health insurance arrangements. Impact of PPACA on current and future small, medium, and large employees As mentioned earlier, PPACA does not affect small businesses as much as it affects medium sized and large businesses. Penalties imposed on medium and large businesses may force some businesses to rationalize and cut-down on the size of their workforce in order to benefit from tax credits for their employees (Blumberg 3). Therefore, PPACA may in the long run lead to layoffs, and as a result people will lose their source of livelihood. An article titled Five ways PPACA Hurts Small Businesses implies that the act may contribute to strained relationships between the business owners and workers (1). When a worker meets the criteria or requirement for government assistance, then it means the employer will receive regular statements and testimonials outlining financial information of the wife or husband of the employee. In so doing, the privacy of the worker is infringed (Five Ways PPACA Hurt Small Businesses 1). Small business employees, as mentioned earlier, will be able to access health care coverage in a period not exceeding ninety days. In this perspective, employees in small businesses are likely to benefit from the insurance plans in a timely manner. In other words, these individuals will not have to wait for more than three months to be covered and hence can receive affordable treatment earlier as opposed to periods before the enactment of PPACA. However, the fact that the law does not obligate employers in small businesses to contribute towards their workers' health insurance coverage (Blumberg 1) may encourage them to stop providing such support, and also shun away from enrolling future employees on available health care coverage plans. Through SHOP, small business employees are able to compare a range of health care insurance plans and subsequently purchase the plan that suits them and their family members. In large and medium sized businesses, fines or penalties are imposed on employers for every worker employed on permanent basis (Blumberg 1). To prevent such fines, PPACA may also encourage employers to focus mainly of employing workers on part-time basis to avoid the fines. In so doing, the workers will be the victims as this translates to lesser working hours and lesser pay. Healthcare coverage premiums for employees in small businesses and medium businesses will under the PPACA not be based on preexisting conditions (McMorrow, Blumberg and Buettgens 4). All employees will be able to afford health insurance since they will share the cost of health insurance regardless of health status under PPACA. In other words, employees will be able to access quality and affordable care despite their complicated and expensive medical conditions and treatments. Future employees will also be able to retain their jobs with the introduction of the PPACA. As mentioned earlier, PPACA act makes available tax credits for small businesses hence encouraging them to start contributing towards their workers' health insurance. Before the enactment of the act, most small businesses had shunned away from purchasing health insurance covers for their employees due to high premiums and high costs of health care. The fact small businesses are able to pay for their employees' coverage can be construed to mean that jobs in small businesses have become more attractive. Future employees will therefore have a better chance of acquiring a secure job with health insurance coverage within all sectors regardless of the size of organization of business. Employees are currently not at the mercy of the employer in terms of acquiring health insurance in medium and large businesses under the PPACA (McMorrow, Blumberg and Buettgens 2). As noted earlier, PPACA gives an avenue for employees to find alternative health insurance plans if their employers fails to provide affordable plans in their workplaces. In this perspective, insurance companies now have limited control over insurance markets and cannot dictate premiums for employees through the employer. If a plan is not affordable for the employees, then it means that they have an option of looking for alternative and cheaper plans to suit their needs. In medium sized businesses, PPACA, according to a study conducted by American Action Forum, has a direct impact on the wages of employees. In this study, American Action Forum found out that "employees who work a full year for a business with 50-99 employees lose $939 annually due to ACA regulations, while employees of businesses with 20-49 employees, on average lose $827.50 annually" (para. 2). The rules or directives of the PPACA as explicated by American Action Forum (para. 2) confines employers to specific kinds of coverage and also prevents them from conferring inexpensive policies characteristic of limited coverage. Restricting employers from granting cheaper covers means that they will react to the high premiums they are forced to pay. In an effort to compensate the costs incurred through paying high premiums for their employees, employers could react by reduce salaries for their employees. Individuals who will be affected the best include future employees as employers will have set lower salaries to compensate for the costs of high premiums. Current and future employees in small, medium, and large businesses will also benefit from health promotion programs that employers are duty-bound by the PPACA to provide to their employees. An article by Sinensky titled 4 Incentives Obamacare Provides Small Businesses published in the Huffington Post clearly asserts that PPACA encourages employers to create healthier workplaces (para. 8). For instance, employees who attains an agreed upon health related goal in the workplace could be given a financial reward or incentive in order to persuade other to adopt better lifestyles that improve their health statuses. According to Sinensky, the highest or upper limit of financial incentives that can be given in such a scenario under the PPACA is "30 percent of the cost of health coverage or 50 percent if the program's goal was related to the prevention of tobacco use" (para. 8). My opinion on PPACA In my opinion, the fact that Obamacare has been projected to lead to loss of jobs as employers cut down on their workforce in a bid to prevent penalties imposed on medium and large businesses, what is of most importance is the affordability of care brought by the act. People employed in small business could not access quality and affordable health care due to high premiums and rising costs of care. The introduction of the act has protected individuals from being exploited by insurance companies through exorbitant premium rates and prejudice on the basis of preexisting conditions particularly medical status. In my opinion, PPACA has also saved the lives of many individuals, but this fact may have been overshadowed by the current criticisms on the act. This is in regard to the fact people with higher needs of care due to complicated medical conditions that are expensive to treat can now access affordable care as insurance costs are shared with those with lower health care needs. In so doing, PPACA has saved many lives. In addition, people's productivity is highly dependent on their health status. The fact that PPACA will increase the number of people covered by health care insurance will translate to a more healthier nation. Conclusion PPACA has impacted business in different ways on the bases of their size. Small business with employees not exceeding fifty have not being obligated by the act to purchase health insurance coverage or plans for their employees. To encourage them however, the act provides tax credits for small businesses to help them start the practice. Medium and large businesses are, on the other hand, obligated to purchase health insurance policies for their employees, failure to which penalties or taxes are imposed to them. Medium businesses are those with workers not exceeding one hundred and not below fifty. Large businesses are those with more than one hundred workers. To prevent penalties, PPACA has forced some employers to cut down o their workforce and hence many people have lost their sources of livelihood. Others have focused their recruitment to only involve part-time workers with limited working hours as some penalties are imposed on the basis of the number of permanent workers. This means that future employees are more likely to be employed on part-time basis. Tax credits for small businesses have made small business attractive and hence people are more likely to retain their jobs regardless of the size of the business. Works cited American Action Forum. "Obamacare's Impact on Small Business Wages and Employment." AAF. AAF, 9 Sep. 2014. Web. 3 Dec. 2014. Blumberg, Linda J. "How Will the Patient Protection and Affordable Care Act Affect Small, Medium, and Large Businesses?" Timely Analysis of Immediate Health Policy Issues, 2010. Web. 3 Dec. 2014. Five Ways PPACA Hurts Small Businesses: The Employer Mandate, n.d. Web. 3 Dec. 2014. McMorrow, Stacey, Blumberg Linda J., and Buettgens Matthew. "The Effects of Health Reform on Small Businesses and Their Workers." Timely Analysis of Immediate Health Policy Issues, 2011. Web. 3 Dec. 2014. Sinensky, Avi. "4Incentives Obamacare Provides Small Businesses.". Huffingpost. Hiffingpost, 6 May. 2014. Web. 3 Dec. 2014. Timby, Barbara, and Smith Nancy E. Introductory Medical-Surgical Nursing. Philadelphia: Lippincott Williams & Wilkins, 2013. Print. Read More