Fundamental Reforms in the US Health Care System - Essay Example

? Policy Analysis of the Patient Protection and Affordable Care Act (ACA) The Patient Protection and Affordable Care Act (ACA), is argued to be the most comprehensive reform of the medical system that US have had since the last 45 years. The Act has transformed non-group insurance market in US by making it mandatory for residents of US to have health insurance. The Act also requires that families and individuals who fail to obtain health insurance coverage be subjected to penalties by the US government at the start of 2014 (Maggied & Schenker, 2010). Due to these restrictions, it is expected that more than 32 million US citizens who are not currently insured would have the opportunity to be covered under ACA. In addition, under ACA, 24 million citizens would be able to purchase their own insurance coverage while more than 19 million would be eligible for subsidies provided by the US government. In spite these efforts, it is still unlikely that everyone will get insurance cover. In spite of the availability of subsidies for low-income families, the cost of insurance may still be too expensive for many people, with the insurance cost exceeding the cost for failing to have an insurance cover for many US citizens. Policy Analysis of the Patient Protection and Affordable Care Act (ACA) Introduction March 23, 2010, marks a historical moment for the medical health system in the US, a day President Barack Obama assented into law the Patient Protection and Affordable Care Act (ACA), which is the most comprehensive reform ever witnessed in the US medical system for the last 45 years. ACA is historical owing to the fact that it transforms the US non-group insurance market, and mandates that all citizens of US acquire an insurance coverage failure to which individuals are subjected to fines beginning the year 2014. In addition, ACA is also geared towards expanding public insurance and subsidizing private insurance coverage, reducing and recognizing spending by Medicaid, the largest health insurance plan in the US, as well as raising revenue from different taxes. In case it is fully implemented, the ACA would likely lead to unprecedented different health care landscape for the US citizens in the future. Forecasting the impacts of these fundamental reforms in the US health care system is marred with a lot of difficulties. Nevertheless, such projections were required to undergo legislative process after, which were later delivered by the congressional Budget Office (CBO). According to CBO, ACA would be able to increase health insurance coverage by 32 million individuals, as well as raising the federal government spending by close to $1 trillion in the next ten years. Despite the huge increase in expenditure, CBO projected that ACA would still raise government revenue and reduce public expenditure even more, thereby reducing the budget deficit of the federal government. These projections by CBO were so fundamental and formed the basis of debate over ACA by the congressmen (Maggied & Schenker, 2010). This paper will explore the impacts of ACA in detail. The paper will first review literature on ACA; the background on the development of the policy, projected costs and relevant statistics. It will finally discuss the projections of the impacts of ACA and provide observations on the impacts. Literature review Patient Protection and affordable Care Act (ACA) is a comprehensive piece of legislation concerned with several aspects of health care system in the US. It came into being after President Barack Obama signed it into law in March 23, 2010. Background of US Health Care System Maggied and Schenker (2010) report that US spend 17% of its GDP on health care, which is the highest when compared to other nations. In addition, the rate of spending in health care is overtaking the growth of US economy in a manner that in the next 7 decades, the Us health care spending would account for 40% of US economy. In spite of this high level of spending in health care, numerous disparities still exist with regard to access to proper health care in the country. Gruber (2011) gives an example of infant mortality rate for the white people in the US which stands at 0.57%, while that of blacks Americans stands at 1.35, which is more than twice that of whites. He notes that many of these disparities exist due to the fact that US is the only major industrialized country without universal access to health care. Gruber goes ahead to reveal that close to 50 million non-elderly Americans, lack basic health insurance coverage. According to Gruber (2011), employer-sponsored insurance (ESI) is the basic source of insurance coverage in the US, which provides coverage to majority of non-elderly people in the US. This is attributable to risk pooling provided by workplace environment as well as large tax subsidy provided by the federal government to ESI. Gruber reveals that US federal government usually forgoes about $250 billion yearly by excluding damages in the form of health insurance derived from either payroll taxation or incomes. Maggied and Schenker (2010) note that since insurance provided outside the employment setting is purchased using post-tax dollars whereas that provided by employers are bought using pre-tax dollars, there exists a strong incentive for insurance cover to be given in places of employment. Apart from insurance coverage provided by the employer, the US has other two major public insurance covers. These are the Medicaid program and Medicare. Medicaid usually provides insurance coverage to the poor, with more focus on the low income children. Medicare program, on the other hand, is a universal insurance program for the elderly people in the US (Maggied % Schenker, 2010). This means that most of the uninsured are not the poorest, but the working poor. As a result, the only option available for this group of Americans is the non-group insurance market according to Gruber (2011). Non-group insurance mainly deals with pre-existing conditions exclusion, which exclude coverage on sickness that has been present at the time individual purchases insurance. In addition, non-group insurance can be limited and priced very highly to those who fall sick. A closer analysis reveals that this market does not provide real insurance protection against sickness. This implies that those not covered by employers and public insurance system are under financial risk from sickness that may befall them. Affordable Care Act (ACA) ACA was enacted to bridge the discrepancies in non-employer insurance market in the US, as well as expand health insurance coverage (Mueller, 2010). The first part of this reform deals with non-group insurance market. In this regard, the ACA was meant to outlaw the exclusion for pre-existing conditions and other practices that were discriminatory in nature so that Americans can be fully guaranteed access to non-group insurance. In addition, the ACA also imposed limits on the capability of insurers to charge differential prices by health status. In this connection, the Act provided that prices can only be varied only by age and smoking status. ACA also laid a minimum standard for insurance in the small group markets and non-insurance group, highlighting a list of vital benefits which must be included in the insurance package offered plus a minimum actuarial value of 60%. Despite polling showing many people in support of this suggestion, some experts were of the posit view asserting that in case people are provided with insurance coverage at prices independent of their health status, then this may lead to many people attempting to remain uninsured until they fall sick that they will try to buy the coverage at average prices which is not a noble idea. Gruber (2011) argues that in such circumstances, insurers will charge high prices to the insured due to the fact that pool purchasing issuance is sicker than average Secondly ACA require everyone to buy insurance or an individual mandate. In this regard, failure to have an insurance cover is expected to attract a penalty by 2014 (Maggied & Schenker, 2010). Nevertheless, experts note discrepancies with the individual mandate proposal. In this regard, they argue that it may be very had to enforce. It is not ideal in cases where insurance is not affordable due to cost factors against individual capability. It is for this reason that the government proposed subsidies to make insurance affordable to all, irrespective of income (Mueller, 2010). These subsidies exist in two forms. First being the expansion of Medicaid program to Americans with incomes below 133% of poverty level ($10,823 for individuals, $22,050 for family of four).The second subsidy is the tax credits meant to offset the cost of private non-group insurance. This credit is meant to cushion people who have to spend to be able to get insurance. The tax credit is offered begins at 3% of income at 133% of poverty line, rising to 9.5% of income at 300% according to Gruber (2011). Moreover, for the Americans with incomes below threshold for income tax filing, ACA provides that they be exempted from the mandate penalty. ACA also has several provisions in corporate to help address problems of rising costs of health care in the US. These include the Cadillac Tax meant to reduce incidence of health insurance plans thereby promoting health care demand. Second is the exchange, which requires group and non-group insurers to compete transparently so as to maximize competition thereby lowering premiums. Third is the Independent Payment Advisory Board (IPAB) charged with the responsibility of redesigning reimbursements of providers under Medicare so as to ensure quality and lower costs. The fourth is the new research institute whose mandate is to study the effectiveness of medical treatment so as to be able to understand the treatments which are more cost effective according to Gruber (2011). Discussion The government of the United States is involved in every aspect of the health c are program. In particular, the government is in charge with the provision of tax incentives to ensure that employers provide health insurance to their employees. Further, the government is in charge with providing health insurance to the poor, the aged, and the disabled. It is vital to mention that the government is also operating health care facilities for veterans as well as supporting the training of doctors and other medical professionals (Barr, 2011). State governments are also charged with the responsibility of administering and helping in the pay for Medicaid. In addition, state governments are responsible for providing license to health care providers as well as operate facilities for those patients suffering from mental illnesses and those that are developmentally disabled. Consequently, local governments own and operate public hospitals and public health clinics. They also ensure that they develop and enforce public health codes (Minkler, 2012). With the institutionalization of the patient protection and affordable care act of 2010 (ACA), the government’s role in the provision of affordable health care is bound to change. In particular, the government will have to provide insurance coverage to the citizens. Other changes that the government will have to deal with involves young adults who are expected to immediately start staying on their parent’s private health insurance policies until they reach the of 26 years old. Further, in the patient protection and affordable care act, private insurers are prevented from discriminating against children who are suffering from preexisting health conditions. “High-risk” insurance pools have also been included in the ACA act to cater for the thousands of adults with preexisting conditions so that they are able to get affordable health coverage (Kovner & Knickman, 2011). The Government as Payer For several decades, the united state’s government and that of the states had taken a minor role in the nation’s health and welfare systems. Social welfare programs were only provided by the local governments. National welfare programs were considered to be unconstitutional for several years. In providing the welfare programs, local government main approach was to establish almshouses for indigent aged and disabled individuals (Kovner & Knickman, 2011). In the political scene, liberal politicians had argued without success in favor of government-sponsored health insurance that would ensure that the employer-sponsored private system is replaced. One of the achievements that have been registered by the liberal politicians includes the provisions in the Medicaid. Medicaid involves 50 state administered programs that ensure that the poor are given affordable health care. However, such health insurance has differing eligibility rules, benefits, and payment schedules (Barr, 2011). The patient protection and affordable care act has also been opposed politically by the congressional republicans. However, the passage of the reform legislation was a major step in the evolution of health care in the United States. The republican congressmen have constantly advocated for the repealing or the alteration of the ACA act. While the act was being discussed in the congress, the proposed health c is reform legislation exposed deep divisions among citizens and politicians concerning issues of health policy (Barr, 2011). The Government as Regulator According to Minkler (2012), the ACA act imposes comprehensive federal oversight over the private health insurance industry. In particular, health plans cannot deny coverage to children base on a preexisting condition. In addition, young adults can stay on their parent’s private c overage up to the age of 26 years. Moreover, health plans are expected not to deny any coverage to any individual in the coming future. Based on a preexisting condition, the will be no lifetime limits on healthcare coverage. Consequently, health plans will not charge higher premiums depending on gender or health status. The government is also charge with the responsibility of assuring health care to citizens. This is evident because each of the three levels of governments owns and operates numerous health care organizations. In particular, the federal government is in charge with the provision of health care to veterans through their department of veteran’s affairs health care system as well as the veterans’ health administration (VHA). The state governments provide health care for the mentally ill and developmentally disabled individuals. These services are provides in large institutional facilities and smaller group homes (Minkler, 2012). Conclusion The number of American citizens who lack heath insurance has been increasing for several decades from roughly 40 million to approximately 50 million. These figures show that more that 16% of the American population lack healthcare insurance. Several citizens are also underinsured since they cannot afford the medical expenses and the medical debts they encounter. The government must provide affordable health care for its citizens who cannot afford private health care insurance. The rise in the number of uninsured citizens should be stopped. The best explanation for the rise of the uninsured has been associated with the decline in the number of Americans with employer-sponsored private health insurance (Kovner & Knickman, 2011). Recommendations The patient protection and Affordable Care Act (ACA) reduces the number of uninsured people in United States by ensuring that they get access to affordable health insurance. The poor and the underinsured should not be left to suffer because they cannot afford to pay for the medical expenses. The government has the responsibility to ensure that appropriate social welfare programs are instituted to prevent the exploitation of citizens by insurance providers. A healthy nation that can fully participate in economic activities requires efficient health care programs that cater for every member of the society regardless of their income. The ACA act is a perfect social welfare program that aims at reducing the number of uninsured Americans. Politics and the controversies witnessed between republican and democrat congressmen should not be allowed to affect the rights of the citizens in getting access to affordable health care. The interest of the public should always be put first, more than political interests. References Barr, D (2011). Introduction to U.S. Health Policy: The Organization, Financing, and Delivery of Health Care In America, New York: JHU Press. Gluber, J. (2011). The impacts of the affordable Care Act: How reasonable are the projections? NBER Working Paper Series. National Bureau of Economic Research. Cambridge, MA. June, 1-26. Kovner, A & Knickman, J (2011). Jona’s And Kovner’s Health Care Delivery In The United States, 10th EDITION, New York: Springer Publishing Company. Maggied, A., & Schenker, J. (2010). Policy analysis: Patient Protection and affordable Care Act. November 11, 1-16. Minkler, M (2012). Community Organizing And Community Building For Health And Welfare, Rutgers University Press. Mueller, K. (2010). Patient Protection and affordable Care act: A summary of provisions important to rural health care delivery. RUPRI Center for Rural Health Policy Analysis, University of Iowa, College of Public Health. Read More