Implication of President Obamas Patient Protection and Affordable Care Act to Health Care - Research Paper Example

 Implication of President Obama’s Patient Protection and Affordable Care Act to Health Care I. Background Obama’s health care policy known as “The Patient Protection and Affordable Care Act to Health Care was enacted into law in 2010. The law intends to rehabilitate “some of the worst practices of the insurance companies” such as insurance companies refusal to cover due to pre-existing condition and hefty fees associated with it, lifetime caps and rescission clauses which insurance companies stretches to avoid paying expensive insurance claims. One of the salient implications of the law when it is fully implemented in 2014 would be the enforced coverage of patients which insurance companies presently deem as “high risk”. It will also refocus the policy orientation of health care practices from being reactive (as coverage focuses on treatment) to being proactive as the new health care policy will also put importance on preventive therapies. Where before check-ups, consultations and preventive therapies requires a co-pay from policy holders, it will no longer be required under the new law so as not to discourage patients from availing preventative measures in looking after their health. Obama’s new health care policy will also address the present inequitable distribution of health care spending. Previously, half of the total expenditures in health care were spent on the 5% of the population and only 3% were spent on the 50% of the population. As it currently stands, the majority of American population receives only a miniscule fraction of health care expenditure while half of its total health care expenditures were spent on a small privilege number of Americans. Clearly, there was an uneven and inequitable distribution of health care cost allocation which the law would like to address. The effect of the new law on the underwriter’s bottom line meant that insurance companies can no longer make profits through the avoidance of “sicker applicants”. Obama’s administration also aims to save 1.5% of its current health care expenditure by banking on the government’s capability to negotiate for a discounted medical cost. Government’s funding for Medicaid, the US government’s health care program for lower income families will also be expanded. In addition, the new health care policy will also expand its coverage to employee’s children the age of 27. II. General Issues and Implications of the Patient Protection and Affordable Act Although well intende, President Obama’s Patient Protection and Affordable Care Act however was met with rabid criticism. Among those issues leveled against it and its implication are as follows; a. Added cost The expanded coverage of Medicaid and Medicare will require additional funding from the federal government. This initiative has been questioned because the law was enacted at a time when America is still reeling from the recent financial crisis that additional expenditures on the health care of the America’s will make its recovery more difficult. This reservation about the new health care policy was aired by Rep. Broun of the 10th Congressional District of Georgia in his critique about the new law that Obamacare, as the new law was labeled by its critics, is a “118 billion doll unfunded mandate on the states through 2023”. The additional funding required for the expansion of Medicaid’s coverage will strain further the federal budget and will contribute to the government’s widening fiscal deficit (LaRocco cnbc.com). There was already $630 billion that has been allocated “to be used to finance health insurance coverage over the next 10 years. . . This amount, however, was characterized only as a “down payment” on additional spending for government-provided health coverage”(Clemens 26). According to Karen A. Campbell of the The Heritage Foundation, Obamacare will only widen the government’s budget deficit instead of reducing it. According to estimate, the added deficit would amount to $75 billion per year (The Heritage Foundation). b. Fees and penalties associated with the law is a disincentive to business One of the criticisms hurled against the new health care policy is the additional costs associated in its implementation. The added fees and penalties were thought to be counterproductive as it will hamper business growth and burden government’s initiative to recover from the crisis. Critics said that the new law is untimely because the economy is still in the process of recovery where unemployment is still at an all time high and the new law might discourage business to expand and hire. Critics were worried that this new law will make businesses hold back their expansion plans and reinforce their current conservative outlook about the economy. If such would be the case, unemployment will not be reduced and America may not be able to recover from the crisis. This anxiety about the new law was articulated by The Heritage that this new health care policy may “lower economic growth by $706 billion and costing 800,000 jobs”(Campbell The Heritage Foundation). c. Patient Protection and Affordable Care Act to centralized planning. It cannot be denied that Patient Protection and Affordable Care Act intend to implement universal health care coverage among Americans. This is done through increased funding in Medicare in Medicaid, compelling insurance companies to cover applicants with pre-existing condition and to make it illegal to rescind insurance coverage if the patient is sick. This is a well intended health care policy but it does not sit well with many Americans because it is similar to the health care policy implemented in the Socialist states. As many critics have pointed out, Obamacare is not reflective of American values and is acting like a big government such as those government’s in centralized economies. It may not be true but imposing socialized health care will not be really perceived as good in a country known to be a bastion of neoliberal market based health care policy (W.W. economist.com). III. Patient Protection and Affordable Care Act (PPAC) specific implication to America’s health care system a. Adults With Pre-Existing Conditions Covered This means that when Obama’s Patient Protection and Affordable Care Act will be fully implemented, health insurance companies can no longer refuse coverage adults who have pre-existing conditions. The previous health care system p b. No Lifetime Caps The lifetime limitation of the amount of insurance coverage which is the current practice of insurance companies on individual policies will also be removed when Obama’s new health care policy will be fully implemented in 2014. c. The End Of Rescissions Perhaps this component of the Patient Protection and Affordable Care Act made the law a “true patient’s bill of rights” (Picker, 2010). The law that will be fully implemented in 2014 will end one of the most unpleasant practices of insurance companies to unilaterally rescind or cancel a health insurance policy which were becoming a frequent practice among insurance companies to bend the legalities of an insurance coverage to avoid expensive insurance claims. d. Medicare Expansion To Rural Areas The budge for Medicare will also increase significantly. This increase of budget in Medicare has an implication to rural hospitals and other health care establishments that have a small number of Medicare patients will also be included in Medicare payment (Huffington Post, 2011). e. Seniors get donut hole rebate Seniors will get a rebate to fill the so-called "donut hole" in Medicare drug coverage, which severely limits prescription medication coverage expenditures over $2,700. As of next year, 50 percent of the donut hole will be filled (The Huffington Post, 2010. f. Deductions For Blue Cross Blue Shield Non-profit Blue Cross organizations will be required to maintain a medical loss ratio -- money spent on procedures over money incoming -- of 85 percent or higher to take advantage of IRS tax benefits (The Huffington Post, 2010). Meaning, non-profit organization such as Blue Cross will be required to spend 85 percent of its fund to medical procedures for it to take advantage the tax break component of the new law. g. More Young Adults Covered On Parents' Plans Employees who will be covered by the insurance policy of their employers can now include their children under the age of 27 in their insurance coverage with Obama’s new health care law. This component of the new law will be very advantageous to employees who has/have sickly child/children because the cost incurred in the health care of their children can now be shouldered by their present insurance when the new health care law will be fully implemented. h. Better Coverage For Early Retirees The bill establishes a temporary program for companies that provide early retiree health benefits for those ages 55‐64 in order to help reduce the often-expensive cost of that coverage (The Huffington Post, 2010). i. Customer Appeals Process Any new plan must now implement an appeals process for coverage determinations and claims. In the old health care system, the appeal process lies as a sole prerogative of insurance companies and may opt not to integrate appeals in the coverage determination and claims. j. Indoor Tanning Services Tax Means that cosmetic procedures which are not necessary and non-life threatening will be taxed more. The new health care law will impose a ten percent tax on indoor tanning services. This tax, which replaced the proposed tax on cosmetic surgery, would be effective for services on or after July 1, 2010 (The Huffington Post, 2010.). Preventive Component of Obama’s health care policy a. Check ups and other preventative care will no longer require co-pays. Unlike the old health care system which is reactive whose insurance health coverage focuses more on treating diseases, the Obama’s health care bill has a proactive component of preventing diseases as a measure to minimize health care costs in the long run. Such, new plans must cover checkups and other preventative care without co-pays. All plans will be affected by 2018 (The Huffington Post, 2010). b. Nutrient Content Disclosure Chain fast food restaurants, which are known to serve unhealthy foods, would now be required under the new health care law to provide a "nutrient content disclosure statement" alongside their items. The calorie and fat content of their offerings will soon be required to be disclosed both on in-store and drive-through menus of fast-food restaurants. c. Encouraging Investment in New Therapies To fully substantiate the preventive component of the new health care law, A two year temporary credit (up to a maximum of $1 billion) is in the bill to encourage investment in new therapies for the prevention and treatment of diseases (The Huffington Post, 2010). IV. Conclusion Perhaps of all the public policy that was initiated by President Obama, Patient Protection and Affordable Care Act is the one that was met with one of the most rabid criticism. He was even accused of being a Socialist that intends to aggravate America’s budget deficit and delay its recovery from the financial crisis. True, Obama’s health care policy may seem costly initially because of the enhanced coverage of Medicare and Medicaid. The 1.5% saving that will be discounted by the government’s ability to negotiate for lower health care cost may not be enough to defray the cost associated with the implementation of the Patient Protection and Affordable Care Act. But in the long-run, America will stand to gain from it because of the policy’s proactive componenet of preventing disease. It may have a socialist component such as the intention of universal health care coverage among Americans that made the new health care policy unpopular but as what President Obama has told, this was done “to eliminate the worst practices of the insurance companies” and “it is the right thing to do”. The implementation of the new health care policy may be ill timed because it is being implemented at a time when Americans are very sensitive about cost and still in the process of recovering from the financial crisis. Moreso when the new health care policy was perceived as a disincentive for business to expand that would aggravate the high unemployment rate. When critics of President Obama agitated the public that his health care policy will make jobs more difficult, the public will surely react even if it is not necessarily true. Despite of this all criticisms, there is no denying that there are aspects of the law that are beneficial to the patients that the bill was even touted as a “true patient’s bill of rights” by Kate Pickert of Time Magazine (2010). Insurance practices which used to be inimical to the patients are now clipped with the new law. The pre existing clause which prevents insurance coverage to those who really need it will be terminated in the new law. Medicare coverage will be expanded and made mandatory which means that regardless of anybody’s capacity to pay, as long as the adult is an American, the American government will cover its health care policy. The law’s expansion of coverage is not only through Medicare but also the extension of coverage to children of company employees under the age of 27 whose insurance policies are sponsored by their employers. The long practice of insurance companies to avoid expensive insurance claim through rescission will also become illegal with Obama’s new health care policy. Rescission in effect, works like the pre-existing clause because it has the tendency to deny insurance coverage to those who really need it. Under the new health care law, once an individual gets sick, it would be become illegal to cancel insurance coverage which was possible before. In the long-run, the new health care law may prove to be more cost saving than the present health care system because it invests in preventive measures of disease than treatment. Checkups and other preventative treatment no longer require a co-pay from patients which could become prohibitive especially in today’s economic climate. The new law also provides a two year tax credit to those who will invest in preventive therapies. It may be early to conclude whether Obama’s health care policy will improve the current health care system of America. But given its proactive component (such as encouragement of preventive therapies) and universal coverage (expansion of Medicare, elimination of pre-existing clause, ending rescission), the law deserves to be given its chance to work. Works Cited Campbell, Karen. “Obamacare: Impact on the Economy. The Heritage Foundation. 22 September 2010. Web. Read More