Health Care and Education Reconciliation Act - Coursework Example

TA Policy Paper: Ethics and Law in Business and Society Contents Contents 2 Introduction 3 History of the Act 4 Implementation of the Act 7 Impact on society and business 10 Policy Analysis 11 References 13 Appendices 15 Introduction The research study is based on an important public policy of United States of America. The policy that has been focused on in this study is Health Care and Education Reconciliation Act 2010. The main objective of this project is to highlight the necessity of this public policy and to analyze the impact of this policy on the society. The Health Care and Education Reconciliation Act was primarily centered towards improving the health care system and to enhance the education system of the society. A public policy is always considered to be a guide that helps in directing the society towards a common goal. These policies that are framed by the government are essential for societal benefits and are often implemented after a constant review of the various issues and problems that are faced by the society. The major objective of this research study is to analyze the positive impacts and negative impacts of this public policy on the society and business. The study would outline the history behind the Act and it would encompass the various impacts of this policy. The study would even further be extended to policy analysis so as to determine whether the policy would work throughout the future, the weaknesses and major strengths of the policy and even highlight certain recommendations that would be beneficial for policy makers in the future. The research study would help the audience to understand the pros and cons of a public policy and at the same time it would even outline the various dimensions of the policy. The hypothesis of the project is that the law that has been framed by the government is beneficial for the society. The analysis section of the project would help the researcher to determine whether the hypothesis is proved to be right or wrong. A public policy is implemented for changing the scenario of the society but it may not cause similar impacts on all the stakeholders of the policy. History of the Act This public policy was enacted through reconciliation process by 111th United States Congress. This policy was enacted so as to amend the Affordable Care and Patient Protection Act. In the year 2010 on March 30 this law was formally introduced by President Barack Obama. This law comprises of wide range of smaller policies such as Fiscal Responsibility and Student Aid Act. However during the process of reconciliation some of the technical parts related to the bill to Pell Grants was completely removed from the policy. This public policy was passed in the year 2010 by House of Representatives and came into existence by vote of 220-221. On this particular day the amended bill was also passed after few hours through the House 220-207. President signed this particular bill at North Virginia Community College that was then transformed into law (Geer, Schiller & Segal, 2011). In the past history of this Act the healthcare reform bills were passed separately by individual House of Congress, however none of the bill had been passed by other house as recorded in the end of year 2009.The Affordable Care and Patient Protection Act had become the most essential avenue to be reformed after the death of Ted Kennedy who was the Democratic Senator who was in the later years replaced by Republican Scott Brown. After achieving positive reviews from the Senate’s supermajority Nancy Pelosi the House Speaker and administration head of Obama had begun persuading the House so as to pass the bill and then even to pass a new bill in order to amend it during the process of reconciliation. At budget resolution in the fiscal year 2010 the reconciliation bill text needed to be submitted to Budget Committee which in turn also needed to be reported by other relevant committees at the end of the year 2009. The Democrats in turn combined the details of Affordable Health Choices Act 2009 as it was stated by Ways and Means Committee and Labor and Education Committee with that of Fiscal Responsibility and Student Aid Act as it was stated by Labor and Education Committee. The major objective of this form of combination was not meant for being passed by the houses but it was developed so that the reconciliation bill is aligned with Budget resolution. This bill was transformed into the version which would be passed as a special rule as stated by Rules Committee. The Reconciliation Act even comprised of Fiscal Responsibility and Student Aid Act as there was provision of passing only a single reconciliation bill every budget year and this in turn had to face a lot of turmoil because of centric Democratic Senator’s opposition and Republican filibuster. This form of move was considered to provide two possible victories to Obama in terms of student loan reform system and health care system (Pomante & Schraufnagel, 2014). From this move it was also clearly indicated that budget savings that resulted from student loan bill would be important in the overall bill of reconciliation through deficit reduction that would enable the bill to be qualified for the process of reconciliation. The legislation that was passed on the basis of self executing rule method was taken into consideration by the House of Representatives of United States but the House Democrats rejected the legislation. In the year 2010 there were series of votes in the House amongst them the first vote was on previous question ordering on the resolution of special rule that in turn set the debate terms, the second vote was focused towards the rule itself, the third vote was centered towards Senate bill, the next one was on the minority attempt so as to amend the bill of reconciliation and finally a vote was done on reconciliation bill. This bill passed through 220-211 vote with a total of 33 Democrats and 178 Republican who opposed it and voted against the bill (Maxwell, 2012).There were several amendments of Republicans that was faced by the bill but it failed. There were two provisions of Republicans that had association with Pell Grants which was stricken due to certain violations of the rules of budget reconciliation which in turn enforced the bill to return back to House. These two provisions are considered in the fourth paragraph of Sec.2101 (a) (2) (D) and Sec.2101 (a) (2) (C). The bill was passed in March 25 by a vote of 56-43 vote from Senate comprising of three democrats and all the Republicans voting against the bill. The major Democratic Senators who voted against the bill were Nelson (D-NE), Pryor (D-AR), and Lincoln (D-AR). On the same day the bill was modified and was send by the House with a vote of 220-207 vote to the President so as to get it signed and approved. The Act majorly comprises of two titles- one addresses the aspect of health care reform and the other part of the Act addresses the student loan reform. These two provisions were totally focused on bringing in changes in the educational system and healthcare system. However this policy has suffered significant market failure mainly because of the factor that this increased the cost on the employers and even required more pool of investment on the part of private health insurance firm. This policy though has gained its importance in most of the sectors specially related to the educational reform approach but it has a great scope in the health care system. The failure of the policy was also because of the factor that the revenue provisions was not equally distributed and focused on by the government which in turn resulted into much of complexity in the system. Though the policy has been able to create opportunities for the private healthcare organization but it has not been able to work effectively so as to take into account the backward class of the society. The provision that has been addressed in the policy has not been fully met in context of the market but the strategy of bringing in a reform has been successfully met by the government. Implementation of the Act The Healthcare and Education Reconciliation Act as stated by the Congressional Budget Office indicates that 945 of the total Americans would have access to affordable and quality health service that would bend the cost curve of health care and would decrease the total deficit by an amount of $143 billion in the following ten years that would be further decreased in the next decade. The program of student loan transformation would make colleges more accessible and affordable by students. The code of the Act is H.R. 4872. The agency that has been involved in the implementation of the Act is the House of Representatives of the assembled Congress of United States of America. The Act has two major titles that are known as coverage, Medicaid, Revenues and Medicare, and the other title is of Education and Health. In the Coverage section the major elements that are encompassed are individual responsibility, tax credits, income definitions and implementation funding. The Financial Committee for this particular provision makes plans so as to limit the premium costs and sharing the costs for all those individuals who lies under the 400% poverty line (Steurer, Langer, Konrad & Martinuzzi, 2005).This even ensures that if the overall costs increases above the expected standard then the tax credit amount would be reduced so as to track the inflation rate. There are even certain provisions for the responsibility of the employees such as $2,000 penalty cap for individual employees. It even enforces that the full time workers of a firm are eligible for issuing a penalty against the employer but no such provisions exist for the part time workers. The provision that has been implemented also eliminates any form of special rule designed for the construction workers. In the Medicare section the major factors that have been highlighted is the advantage payments of Medicare, payment for those hospitals that has been qualified, ownership-referral of the physician, updates based on markets, etc. This provision is implemented in the form of a rebate of $250 specifically for all those beneficiaries who are aligned with the “donut hole” or coverage gap. It is so implemented that it reduces the overpayments of Medicare advantages that highlights the differences between the rural and urban areas. The provision even ensures that 85% of the total revenue that are generated from plans of Medicare advantages would be given for improvement in the medical activities and to manage the costs that is associated with providing quality Medicare. The Medicaid section of the policy covers the major aspects such as federal funding that are given to the States, hospital payments in disproportionate share, payments to those physicians who are linked to primary care, territory funding, and drug rebates for those existing drugs that are being reformulated. This policy of the law has been implemented by providing funds for the expansion of Medicaid by a federal match of 1005 for the years 2014, 2015 and 2016 and in the later years it would be decreased to 90%. There is even additional federal funding provided for those adults who are non pregnant and childless and this form of funding is to be extended to all the other regions in the next coming years. The funds towards the territory have been increased to a total amount of $2 billion by the government and they are even provided with the facility to enhance Exchange. The rebate towards the formulation of new drug has been modified through narrowing down the conditions associated with the drug rebate. The next section of the Act is of reducing waste, abuse and fraud and the most important elements of this section are focus towards mental health centers of community, limitations of medical review and Medicare prepayments, accumulation of funds so as to reduce the factors of abuse, fraud and waste, and enhanced oversight in the form of 90 day period for those claims that are initially made by the DME suppliers (Kaptein & Schwartz, 2008).This provision has been implemented through the extended support towards mental health centers and even through increase in the funds by an amount of $250 million. There has been organizations developed who takes proper care towards handling waste in different parts of the region. The next section of the policy highlights the provisions that has been made towards the revenue and is been implemented through creating delays in excise taxes for those health plans that are of high costs till the year 2018 and it also increased the amount for threshold by $10,200 for tax imposition for those plans that are self-only and for family coverage the total amount is $27,500. The Medicare contribution has been equalized for unearned and earned income group through adjusting gross income for single taxpayer by $200,000 and for married couple it is implemented as $250,000. The provision even closed the loophole of black liquor which makes some of the taxpayers gain tax credit in relation to cellulosic biofuels. This particular provision even has established the doctrine of economic substance which prevents the usage of any form of transactions that does not have a particular business purpose but results into tax benefits. The other provisions of this title indicate the detailed conditions for higher education. This provision has been implemented through providing $2 billion for all the community colleges so as to improve upon the career training and educational programs. The next subtitle for this Act focuses on the educational factor and the elements encompassed in this title are investment in families and students, reform of student loan, and health related factors. This provision has been implemented through the formation of Direct Loan Program that would be focused towards providing federal loans to the students and even has incorporated an amount of $36 billion over the next years which has increased the Pell Grant in the year 2010 by $5,550 and aims at increasing it by $5,975 in the year 2017. In 2013 the Pell Grant has been indexed to CPI or Consumer Price Index so as to be aligned with the increasing costs associated with colleges. The policy has been implemented through the program of income based repayment which enables the borrower to pay the loan at 10% of their total income. This initiative has also made the government to invest $2.55 billion in minority serving institutions and historically black universities and colleges (Scherer & Palazzo, 2007).There has also been an investment of $750 million for completion support and college access programs for the students and even comprise of increased investments in Grant Program related to college access. The health provisions has been implemented in the form of insurance reforms related to existing plans, which even encompasses bans on annual limits and lifetime, coverage for conditions that are pre-existing, waiting period limitations, bans on various rescissions and coverage that has been expanded for all the young adults. Impact on society and business A law that is been implemented by the higher authority for the well being of a nation has certain impacts on the society and business. There is a symbolic relation that is shared between society and law. In each and every society it is observed that there is complexity in individual’s actions and there even exists conflict in their interests. This is majorly because of the fact that the demands of humans are unlimited but the resources required to fulfill such demands is limited. Max Weber in his theories stated that power is one of the probability factors that indicate that individuals in a society are often observed to carry out on their own in spite of their being resistance (McDonough, 2011).This is the condition that indicates the impact that is created on the society by the law. A policy or law is framed for the benefit of the society as a whole but every individual has their own way of analyzing a situation which results into a law creating an impact on the society. As in this case the public policy had majorly a positive impact on the society as it provided greater accessibility to students in terms of colleges and universities (Boehner, 2011). On the other hand it even enhanced the healthcare facilities which would be extended to the rural as well as urban areas. The insurance reform and family coverage that is being offered through this policy helps to restructure lives of many individuals. However the impact was not same on the business environment as it increased the cost of the employer and initiated a scope through which more of misunderstandings can be formed between the employee and employer. Though the policy has been formally implemented but there are small scale firms who are not aligned with the healthcare clauses of the policy. The Moral Impact Theory of Law states that a law to be categorized as good or bad depends on the psychology of an individual. This makes a law to be successfully implemented in the society or results into its failure. Policy Analysis The public policy that has been framed in the year 2010 has certain advantages that have made it a successful approach towards improving the conditions of the society. This policy states that there needs to be quality health care for citizens and at the same time there also needs to be proper educational systems so that even children belonging to lower income groups can easily access education. The policy has been able to work in certain condition such as bringing in educational reforms and making educational loan easily accessible by students. Through this policy majority of students are not deprived of basic education and they are provided with schemes through which they just need to pay 10% of their total income and this helps them to take care of their basic requirements along with that of loan repayment (Rosenbaum, 2011). So the policy has worked in this particular field and it has worked in the field of healthcare as there is more number of healthcare facilities in United States with increased percentage of health coverage. There are specific strengths and weaknesses of this policy. The major strength of this policy is that it has reduced certain unnecessary elements from the society and has made the higher authority align the revenue towards concern areas of the society. The policy also equalizes the requirements of urban areas with that of rural areas. The major weakness of the policy is that it poses a great burden on the employer as there is a lump sum amount that is associated with penalty which can be misused by the employees at any point of time. On the other hand the policy has not proved to be effective in every field. It encompasses huge investments with respect to educational system modification and there is no proper consideration shown by the policy towards educational development in rural areas. On the other hand there has been tax rebates given to the population on basis of certain clauses of the policy which would in turn make the operations of government more difficult as there would be less of revenue available for executing the operations related to healthcare and educational system reforms. The policy makers in the future years are recommended to analyze the situation from diverse areas before implementation so that it proves to be advantageous for all the stakeholders of the policy (O’Fallon & Butterfield, 2005). The recommended approach is that the policy makers should frame the policy in such a manner that the revenue outflow of the government can be substituted through expanding the sources of revenue inflow otherwise a project that is been undertaken cannot be completed successfully. This strategy can only be applied when the policy makers take into consideration not only the positive aspects of the law but also the negative impacts that the law would create on the society in the future years. References Boehner, J. (2011). Obamacare: A Budget-Busting, Job-Killing Health Care Law. USA: DIANE Publishing. Geer, J., Schiller, W., & Segal, J. (2011). Gateways to Democracy: An Introduction to American Government. USA: Cengage Learning. Kaptein, M., & Schwartz, M.S. (2008). The effectiveness of business codes, Journal of Business Ethics. Vol.111. Maxwell, N. L. (2012). The Health and Wealth of a Nation: Employer-based Health Insurance and the Affordable Care Act. USA: W.E. Upjohn Institute. McDonough, J. E. (2011). Inside National Health Reform. USA: University of California Press. O’Fallon, M.J., & Butterfield, K. D. (2005). A review of empirical ethical decision making, Journal of Business Ethics. Vol. 24 (1). Pomante, M. J., & Schraufnagel, S. (2014). Historical Dictionary of the Barack Obama Administration. UK: Rowman & Littlefield. Rosenbaum, J. (2011). The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice, Public Health Reports. Vol.126(1). Scherer, A.G., & Palazzo, G. (2007). Toward a political conception of corporate responsibility, Academy of Management Review. Vol. 32(4). Steurer, R., Langer, M. E., Konrad, E., & Martinuzzi, A. (2005). Corporate Stakeholders and Sustainable Development: A Theoretical Exploration of Business Society Relations, Journal of Business Ethics. Vol.61 (2). Appendices Read More