The Affordable Care Act: History and Analysis

The Affordable Care Act – ACA

A public policy that expressed shared responsibility successfully changed health insurance in the United States.  A reform that covered the entire insurance market eliminated a major discriminatory practice of excluding pre-existing condition.  These statements confirm the effective implementation of the Affordable Care Act of 2010 (ACA) or the Patient Protection and Affordable Care Act (PPACA) or simply Obamacare as it ensures coverage for all Americans through tax credits that make insurance affordable for everyone.  The ACA reforms the health insurance industry and the American health care system as a whole and provides Americans more rights and protections as it expands access to affordable quality health care to millions of uninsured.

Before the implementation of the ACA the health care system is very difficult for many Americans to participate in because health insurance is very expensive.  Those who live in poverty qualify for free healthcare paid by the government or the Medicaid; and those who are older than 65 obtain Medicare in which the government subsidizes for its premiums.  However, there are still many unqualified including the self-employed, those persons who are not able to obtain health insurance through their jobs, and minors (Willis, 2017), hence they have no means of paying for healthcare. Most frequently are the instances in which insurance was even denied to people with medical conditions thus, without any insurance to pay for treatments.

The Uninsured

It has been a misconception that the uninsured are those who do not have jobs are those who just do not want insurance.  The majority of these uninsured were working families who cannot afford or do not have access to health insurance.  The primary reasons for Americans being uninsured are cost and job loss with poor working families as the most likely to be uninsured.  In America, “the uninsured are more likely to die than those with insurance; are less likely to have a usual source of care outside of the emergency room; often go without screenings and preventive care; often delay or go without needed medical care; and pay more for medical care” (Obamacare Facts, 2017).

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Affordable Care Act (ACA): Definition

The Patient Protection and Affordable Care Act (PPACA) is most commonly known as the Affordable Care Act or ACA is a health reform legislation signed into law by President Barack Obama in March 2010 (ObamaCare Facts, 2016) which puts in place comprehensive health insurance reforms to provide Americans with better health security such as: expanded coverage; holding insurance companies accountable; lower health care costs; guaranteed more choice; and enhanced quality of care for all Americans. The ACA’s major provisions include the following descriptions:

1. Eligibility                                                                                9.   Dual eligible
2. Financing                                                                               10.   Provider payments
3. Information Technology Systems and Data                          11.  Program transparency
4. Coordination with Affordable Insurance Exchanges             12.   Program integrity
5. Benefits                                                                                  13. Prevention
6. Community-based long term services and supports              
7. Quality of care and delivery systems
8. Children’s Health Insurance Program (CHIP)

The ACA was signed into law on March 23, 2010 and upheld by a Supreme Court ruling on June 28, 2012.  “The ACA was signed into law to address the national health care crisis and to make insurance more affordable and available for the 44 million uninsured people. This law requires all Americans to have health insurance by 2014 or pay a per month fee for each month without minimum essential coverage” (ObamaCare Facts, 2016).  This shared responsibility provision is referred to as a tax and not a mandate and is introduced as a new way to purchase insurance.  The ACA allows the possibility of being able to purchase insurance through state health insurance marketplaces that provides buyers with cost assistance and be able to compare plans.  As the ACA requires that all Americans purchase a private health care plan, and get an exemption or pay a tax penalty on their federal income taxes, the law also implements new benefits, rights and protections leading to better quality and more affordable health insurance. “The ACA refers to two separate pieces of legislation of  the (PPACA) (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152); and both of these laws expand Medicaid coverage to millions of low-income Americans and makes numerous improvements to both Medicaid and the Children’s Health Insurance Program (CHIP)” (Medicaid, 2016).

The ACA improves the health care industry including the minimum standards of what health insurance must cover.  The 44 million Americans who are currently without health insurance are projected to be covered under this health care law and be included among the recipients of better preventive care, women’s health services, and better care for seniors and expanded coverage of the poorest people in America.  ACA’s provisions protect consumers by holding the insurance companies liable as they can “no longer deny individuals for pre-existing conditions or being able to drop their coverage for being sick, free preventive treatments, and the elimination of discrimination, and annual and lifetime limits on essential health benefits; and that all plans sold on off the insurance exchange include ten essential benefits and have a minimum actuarial value” (ObamaCare Facts, 2016).   

 Why has ACA been so opposed?

The ACA boasts of its capability to save low to middle-income families and small businesses billions of dollars by providing reduced costs and reduced premiums to millions of Americans through marketplace subsidies.  “The ACA was passed by a Democratic Congress and signed into law by a Democratic president in 2010 with the consistent opposition from Republican congressmen, governors, and Republican candidates” (Dalen et al., 2015). 

The opposition to a government role in health care is based on the fact that that the large majority of American citizens do not trust the American government, particularly Republicans who are much less trusting of the federal government and much less supportive of a government role in health care than Democrats. Those in the opposition generally ignore the most important goal of the ACA which is to improve the health of Americans by increasing the number covered by health insurance.  “People have lost the doctors and health plans they valued, many are being forced to pay penalties for not buying ObamaCare’s expensive mandated insurance, others are finding they must pay back subsidies they received last year; many workers have lost jobs and hours because businesses couldn’t afford to provide ObamaCare’s expensive benefits or pay thousands of dollars in penalties” (Turner, 2015).  It is significant to note that with just on the first year of ACA’s implementation is a recorded more than 10 million citizens who have gained health insurance.  “The percentage of Americans without health insurance decreased from 18% in July 2013 to 13.4% in June 2014. In addition, the ACA has eliminated many of the negative features of private insurance such as the denial of coverage for those with prior conditions” (Dalen et al., 2015).

Total Costs of the Affordable Care Act

The Congressional Budget Office (CBO) has presented its estimates on the ACA’s costs and impact on insurance coverage with the “total net cost of the insurance coverage provisions of the law to be over $1 trillion after 10 years from 2016 through 2025. This gross cost includes spending on subsidies for insurance from the exchanges, tax credits to small businesses and expanded Medicaid coverage (Fatcheck, 2015).  The insurance-related provisions implies that “6 in 10 Americans can get covered for $100 or less on the Health Insurance Marketplace, with the average plan costing just $82 after Premium Tax Credits in 2014.  This trend of low costs for those with cost assistance has generally continued each year due to the way premiums are capped based on income” (ObamaCare Facts, 2016).  The CBO stated that gross amount that will be spent in the following 10 years is for insurance subsidies from exchanges and related spending and revenues, for Medicaid and CHIP, and for tax credits for small employers.

The ACA does not sell health insurance, but creates a marketplace for Americans to buy regulated and subsidized private insurance.  “Most Americans have to either: obtain health insurance known as minimum essential coverage and maintain it throughout the year, or pay a shared responsibility fee for every month they go without coverage.  Many qualify for lower costs on monthly premiums and out-of-pocket costs via cost assistance subsidies through the marketplace” (ObamaCare Facts, 2016).  Cost assistance is based on income and includes “Premium Tax Credits, which lower monthly premiums, and Cost Sharing Reduction subsidies, which lower out-of-pocket costs like co-pays, coinsurance, deductibles, and out-of-pocket maximums.  However, those who have access to affordable employer-sponsored insurance won’t be eligible for subsidies” (ObamaCare Facts, 2016). 

Impact of ACA on Small Businesses

The ACA mandates an employer to provide full-time employees with comprehensive health insurance.  The enforcement of this mandate was initiated on 2015 for employers with more than 99 full-time employees.  Employers with 50 to 99 full-time workers began to comply on 2016. Businesses with less than 50 employees will not be sanctioned with penalties.  Employers are also prohibited to place burdensome amount of premiums on some employees as payment based on a percentage of their wage income (Herrick, 2014).   

Much of the burden of complying with the ACA falls on small businesses as it affects how businesses operate such as the hiring of employees, employee compensation, and growth. The ACA provides small employers a temporary health insurance tax credit as they are able to employ moderately-paid workers. The credit is only available for six years for those businesses that have 25 or lesser employees with average wage of less than $50,000.00 (Herrick, 2014).  Small businesses obtain group health coverage from insurers with cost-increasing regulations, and must renew annually their coverage compared to large corporations, thus it is to self-insure by paying the medical bills of their employees and hiring insurers to manage health benefits (Herrick, 2014).  Health benefits are included in the significant expenses for employers as a substantial portion of the total compensation of workers. The CBO evaluation indicates that the required coverage for an individual will cost $5,800 or more in 2016 which is equivalent to an additional $3 per hour of minimum health wage. Family coverage is estimated to cost more than twice that amount as illustrated by the cost of employee health benefits at $2.70 per hour which is, according to the Bureau of Labor Statistics, 8.5 percent of the private industry worker’s total compensation (Herrick, 2014).   

What are the Health Insurance Exchanges?

The ACA’s Health Insurance Exchanges is also called the Health Insurance Marketplace, and was opened on October 1, 2013.  “Exchanges are State, Federal or join-run depending on your State” (ObamaCAre Facts, 2016).   The ACA health insurance exchanges or ObamaCare exchanges are online marketplaces for health insurance where Americans can obtain coverage from competing private health care providers. “Shoppers can use a price calculator to see if they qualify for cost assistance subsidies (as well as Medicaid and CHIP) and see side-by-side comparisons of qualified health plans ensuring the best deal for them and their family.  The health insurance marketplaces (also known as exchanges) are estimated to provide up to 29 million people with affordable health insurance by 2019” (ObamaCAre Facts, 2016).   Marketplaces going into open enrolment 2015 offers enrolling in a new plan, change plans, verify cost assistance, enroll in Medicaid and CHIP, and to apply for cost assistance which can include premium subsidies and out-of-pocket subsidies depending on income. 

One must obtain or maintain minimum essential coverage (all marketplace plans are minimum essential coverage), or qualify for an exemption, during open enrolment to avoid owing the per month fee for not having coverage.  In the individual and family market open enrolment is the only time you can switch plans or buy a new plan, this is true whether you use the marketplaces or shop outside of the marketplaces.  Missing out on open enrolment renders one unable to buy a major medical health plan that counts as minimum essential coverage unless the person qualifies for a special enrolment period” (ObanaCare Facts, 2016).  One must have coverage by the end of each year’s open enrolment to avoid the per month fee for not having health insurance for that year (ObamaCAre Facts, 2016).  

Impact on Medicaid and Medicare

The benefits of Medicare are demonstrated in the decreased cost of prescription drugs and the elimination of co-pays for preventive services. The following are the effects of ACA on Medicare:

• ACA protects one’s Medicare coverage.
• One need not replace his or her Medicare coverage with Marketplace coverage as Medicare is not part of the Health Insurance Marketplace established by the health care law, thus ACA maintains the current and same benefits and security with an obtained Medicare, whether through Original Medicare or a Medicare Advantage Plan.
• ACA provides more preventive services, for less making Medicare cover specific preventive services – mammograms or colonoscopies, without charging a person for the Part B coinsurance or deductible.
• ACA can save money on brand-name drugs and even provide a 55% discount in the purchase of Part D-covered brand-name prescription drugs.
• Doctors get more support with new initiatives to support care coordination and get additional resources to make sure that the patients’ treatments are consistent.

“The health care law ensures the protection of Medicare for years to come. The life of the Medicare Trust fund will be extended to at least 2029—a 12-year extension due to reductions in waste, fraud and abuse, and Medicare costs, which will provide you with future savings on your premiums and coinsurance” (Medicare, 2016).

The Pros and Cons of the ACA

The pros and cons of the ACA reflect the complex nature of the new health care law.  The ACA contains many benefits for low and middle income families and businesses, but it also contains some obstacles for high earners, larger firms that do not insure their employees, and certain sectors of the healthcare industry.  The ACA regulates private insurance to ensure an individual more rights and protections despite much opposition which explain the need to illustrate ACA’s pros and cons just as provided in the ObamaCare Facts online source:

Pros:

• Uninsured people have access to affordable, high-quality health insurance through Medicaid expansion, their employers, and the Health Insurance Marketplace.
• Uninsured Americans can get free or low cost health insurance, and some can get help on out-of-pocket costs using their state’s Health Insurance Marketplace.
• More private coverage options with all major medical coverage options providing minimum essential coverage.
• Provides cost-curbing measures.
•  Small businesses with less than 25 full-time equivalent employees can get tax credits for up to 50% of their employees’ health insurance premium costs.
• Medicare has improved for seniors by measures that eliminate the donut hole, keep rates down, cut wasteful spending and fraud, and expand free preventive services.
• The ACA remains a free market and allows our $3 trillion dollar healthcare industry to thrive. (ObamaCare Facts, 2016)

Cons:

• To get the money to help insure all these people, there are new taxes that may affect an individual directly are the individual mandate and the employer mandate.
• All Americans who can afford health insurance have to obtain health coverage, get an exemption, or pay a fee which creates an extra complication with regards to filing taxes. Some folks who just barely miss the Federal Poverty Level limit of 400% are hit the hardest as they don’t qualify for assistance. Those who do get cost assistance will need to adjust tax credits on the 8962 – Premium Tax Credit form.
• More options mean more complicated shopping for coverage. Keeping a private health insurance system means that shopping for health insurance can be confusing, and consumers risk over-buying or under-buying. Coverage options also, by nature, create a tiered healthcare system where more money equates to a better quality of care. However, in that respect, nothing has changed.
• Insurance companies must cover sick people, and this increases the cost of everyone’s insurance. Most people must obtain coverage or pay a per-month fee. Some people were benefiting from being in a low-risk group than men in good health with no pre-existing conditions, who were not responsible for anyone but themselves, and who remained healthy had low insurance costs.
• Medicaid expanded using Federal and State funding. Not all States have to expand Medicaid.  
•  Employee health benefits can be expensive. Lower wage workers may end up getting better value through the marketplace, but having employer-sponsored coverage means that they can’t get cost assistance. (ObamaCare Facts, 2016)

The ACA Health Insurance exchanges continue to prove its effectiveness in reducing the number of uninsured as they provide the essential information for people to make an informed selection about which plan is best for their needs.  The ACA has brought about major improvements in how health coverage is purchased, but also in lowering cost and increasing quality outcomes.  The ACA has established universal coverage and shared responsibility as well as set federal standards for health insurers offering products in both the individual and small-group markets and employer-sponsored health benefit plans.  There may be the technical challenges in the establishment of the law  because “the question of whether the law falls within Congress’ constitutional powers rests on whether the courts come to view the legislation as regulating our economic approach to the purchase of health care (because we all use care, the issue becomes how to pay for it), or instead (as the law’s opponents argue) as a law that forces individuals, as passive non-economic actors, to buy a product they do not want” (Rosenbaum, 2011).  

The ACA has set an array of federal standards for insurers that sell products in both the individual and group health insurance markets, as well as for self-insured group health benefit plans sponsored by employers.  The ACA has proven its worth in: “improving health-care quality, efficiency, and accountability, making primary health care more accessible to medically underserved populations, improving the public’s health and training health professionals, and providing long-term care” (Rosenbaum, 2011).  “The ACA is transformational and has faced the great task of implementation with opportunities for major advances in public health policy and practice are simply unparalleled. The Act represents a singular opportunity not only to transform coverage and care, but also to rethink the basic mission of public health in a nation with universal coverage (Rosenbaum, 2011).  The ACA has brought significant changes which include among others the following:

• Lowered spending posting the slowest growth rate in healthcare expenditure after 1960 and brought huge reduction in uninsured rates as it provides access and increases affordability.  The June 2016 Urban Institute report on total coverage and costs stated that the long-term projections of spending are found to be $2.6 trillion less. Spending projected by 2020 should ideally be 13% less, while the rate of uninsured has fallen to 9.1% in 2015.
• Increase in enrollment: auto-renewals, renewals, and new enrollments in the Obamacare Health Exchange plans at the end of 2014.
• Enrollment- Federal and State Health Insurance Marketplace: With the open enrollment at end of 2015, around 11.7 million Americans were enrolled in the Federal and State Health Insurance Marketplaces. Only Medicaid and CHIP had covered 10.8% and 5.7 million youths less than 26 years were able to stay on their parents’ health insurance coverage. Millions of others were covered under the expanded coverage provided by employers under Obamacare and with private players who worked out of the marketplace.
• Around $11.5 billion was saved by 8.2 million senior citizens since 2010 in their prescription drugs. That means about $1047 for each beneficiary.
• ACA has helped in saving more than $19.2 billion that America incurred through fraud activities. This amount is around $10 million more than what was found five years back in 2010.
• $12 billion savings in health care costs (Bhattacharya, 2016).

Affordable Care Act of 2010: To Reform or to Repeal

Health Care Reform

Before the ACA was signed into law, there were growing numbers of uninsured people as well as personal debt and bankruptcy due to medical costs.  Health care costs continue to increase that only result in the ever-growing profit for the health care corporations.   There was a growing national debt and deficit reflecting a US health care system that has been out of control for many years that it was referred to as unsustainable trends in healthcare or the health care crisis.  However, despite the notable impact of the ACA the real healthcare reform still needs to be in place and dramatically change the current broken model that is unaffordable and is not consumer-centered.

Transforming toward a serious healthcare reform must entail coverage on accountability, transparency, cost and quality. Policy makers must set the essential fundamentals for a market-based and patient-centric system to ensure that all Americans get a fair treatment by health care providers.  Reforms must be continuous to help make health insurance more affordable to lower and middle income Americans and small business employers. “Although the ACA has reduced the number of uninsured by about 3 percentage points from 2013 to 2014, the primary source of new coverage is Medicaid, which provides more restricted access to care than most private insurance. as the ACA is showing increasing signs of instability” (Antos et al., 2015).  A new health program for low-income Americans is currently needed and wherein it pays primary care physicians a minimum amount a month to see each patient, whether they are healthy or sick, and that it would give Medicaid patients what they really need: first-class primary care physicians to manage their chronic cardiovascular and metabolic conditions. Expansions of state and local clinic systems can be helpful considering the current health care trends.

The Quest to Repeal the ACA

America’s Obamacare ensures that everyone has access to medical treatment, but the current dilemma it faces is abolishment.  The following are noteworthy facts about ACA that are also being currently viewed by the present administration as contributors to the need for abolishing the act: 

• Obamacare ensures that every American legally acquires health insurance through legislation. There are also government subsidies available to make the insurance more affordable for individuals.
• Obamacare also makes it a legal requirement for companies to provide healthcare if they have more than 50 full-time employees.
• A government website was made available so everyone requiring health insurance was able to compare rates, sign up and learn about public subsidies.
• The Obamacare law monitors health insurance companies to ensure everyone’s coverage as well as flag them down if they deny anyone cover (Willis, 2017).

President Donald Trump aims to repeal and replace the ACA through Congress despite its increasing appeal with its rule on prohibiting insurers from denying coverage for pre-existing conditions.  Obamacare is at its highest popularity levels today despite facing the challenge of a replacement as proposed by Trump which consists of “a series of reforms that follow free market principles such as allowing the sale of health insurance across state lines and requiring price transparency from doctors and hospitals” (Willis, 2017).  With the work to repeal and replace the ACA in place, more Americans are expressing their views favoring Obamacare.  A “reduction of 22% in the rate of uninsured ever since ACA has been introduced indicates that more families are assured that each member will be cared for because they have health coverage” (Bhattacharya, 2016).  Repealing the ACA is not an option now for most Americans as they see that repairing the law will bring better results.  Supporters of repealing the ACA have yet to come up with a meaningful and better alternative approach to healthcare reform.  “The Republican leadership has backed a plan to repeal many parts of Obamacare while replacing others, such as income-based subsidies to help Americans afford insurance. Those would be replaced by tax credits based on a person’s age” (Willis, 2017).

ACA is Progress

The ACA has succeeded in significantly increasing insurance coverage as it recorded the largest decline in the uninsured rate since the creation of Medicare and Medicaid.   The ACA’s major coverage provisions that have contributed to significant positive transitions include:

• comprehensive reforms in the health insurance market combined with financial assistance for low- and moderate-income individuals to purchase coverage;
• generous federal support for states that expand their Medicaid programs to cover more low-income adults; and
• and improvements in existing insurance coverage (Obama, 2016).

Thus, the aforementioned provisions have also contributed to the following outcome:

• States that decided to expand their Medicaid programs saw larger reductions in their uninsured. 
• Greater insurance coverage appears to have been achieved without negative effects on the labor market, despite widespread predictions that the law would be a “job killer.” Private-sector employment has increased in every month since the ACA became law, and rigorous comparisons of Medicaid expansion and no expansion states show no negative effects on employment in expansion states.
• The law has also greatly improved health insurance coverage for people who already had it. Coverage offered on the individual market or to small businesses must now include a core set of health care services, including maternity care and treatment for mental health and substance use disorders, services that were sometimes not covered at all previously (Obama, 2016).

Conclusion

The ACA has truly progressed to become the most important health care legislation enforced in the United States since the conception of Medicare and Medicaid in 1965.  More Americans continue to be served by ACA’s comprehensive reforms through improved accessibility, affordability, and quality of health care.  However, such progress must not impede major opportunities for greater improvements on the health care system. Americans want high quality health care from their health care system and that is its capability to provide the greatest benefits.   Freedom of choice, affordability and shared responsibility are features that are expected from a reformed healthcare system that will give more advantage to more people. Efforts to reform the U.S. health care system must consider the language of human rights, thus access to quality health care must be perceived as a right, and not just an option or privilege.  The ACA and health care reform embody greater moral gravity in ensuring that everyone deserves access to basic health care.  Many still claim of the ACA as defective, but the ACA proves that the government can be innovative through its ability to respond to the ever-changing health care environment.

References:

Antos, J., Capretta, J. and Wilensky, G. (2015). JAMA Forum: Replacing the Affordable

Bhattacharya, A. (2016). Performance of Obamacare in the Last 5 Years. True Coverage Insurance Marketplace. Retrieved July 9, 2017 from https://truecoverage.com/blog/performance-of-obamacare-in-last-5-years/

Care Act and Other Suggested Reforms. Retrieved July 9, 2017 from             https://newsatjama.jama.com/2015/12/21/jama-forum-replacing-the-affordable-care-act-    and-other-suggested-reforms/

Dalen, J. E., Waterbrook, K., and Alpert J. S. (2015). Why do so many Americans oppose the      Affordable Care Act? American Journal of Medicine Vol.128 No.8, pp.:807-10. doi:   10.1016/j.amjmed.2015.01.032.

Fatcheck (2015). Conflating costs of the ACA. Retrieved July 9, 2017 from http://www.factcheck.org/2015/02/conflating-costs-of-the-aca/

Medicaid (2016). Affordable Care Act. Retrieved July 9, 2017 from https://www.medicaid.gov/affordablecareact/affordable-care-act.html

Obama, B. (2016). United States Health Care ReformProgress to Date and Next Steps. The JAMA Network. Retrieved July 9, 2017 from http://jamanetwork.com/journals/jama/fullarticle/2533698

ObamaCare Facts (2016). ObamaCare Health Summary. Retrieved July 9, 2017 from http://obamacarefacts.com/obamahealthcare-summary/

Rosenbaum, S. (2011). The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice. Public Health Report Vol.126 No.1, pp.130–135. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3001814/https://www.ncbi.nlm.nih.gov/            pmc/articles/PMC3001814/

Turner, G. M. (2015). For Many Americans, Opposition To ObamaCare Has Become Personal. Forbes. Retrieved July 9, 2017 from http://www.forbes.com/sites/gracemarieturner/2015/03/23/for-many-americans-opposition-to-obamacare-has-become-personal/#367135b23226

Willis, A. (2017). What is Obamacare and why does Trump want to repeal it? Metro News.          Retrieved July 9, 2017 from http://metro.co.uk/2017/05/05/what-is-obamacare-and-why-does-trump-want-to-repeal-it-6617385/#ixzz4mLLqj8TP