American Health Care Reforms: A Research Paper

American Health Care Reforms

Overview and Significance

In March 2010, the health reform legislation got passed, introducing a broad range of changes in healthcare payments and delivery systems in the United States (US). President Obama signed the health reform legislation to increase health insurance coverage for more Americans. The law restructured health insurance coverage, medical costs, and preventive care measures. For instance, through the Affordable Care Act (ACA), a portion of the federal budget would help families and small businesses that struggled to cover their insurance (Gruessner, 2016). More so, the law got enacted in two parts with the Patient Protection and Affordable Care Act, first adopted on March 23, 2010, followed by its amendment through the Health Care and Education Reconciliation Act on March 30, the same year (Skinner & Chandra, 2016). Similarly, subsidies and or premium tax credits offered to households within the poverty line through the Act aimed to broaden the health care coverage to the poor.

The 2010 healthcare reform policy increased healthcare coverage to United States citizens while reducing the annual growth rate of public health expenses. Since the ACA, also known as Obamacare, would ideally extend health insurance coverage to all Americans, the impact of the new coverage led to an initial increase in medical spending, with uninsured individuals spending up to $25 billion to enhance high-risk pools and reinsurance programs (Gruessner, 2016). ACA also significantly improved healthcare coverage by reducing the uninsured rate from 19 percent in 2010 to 9.1 percent in 2015 (Obama, 2016). Additionally, the healthcare reforms became important in improving citizens’ financial security, access to healthcare by the elderly, and restructuring healthcare payment methods.

History of ACA

In July 2009, the speaker of the House, Nancy Pelosi, and some democrats in the House of Representatives initiated a plan to redesign the health care system in the United States. With the Democrats holding a majority of the seats needed to pass an act, their 219 votes, along with a single republican, overwhelmed the 176 republican opposition to the ACA in November 2019 (Skinner & Chandra, 2016). During the Senate vote on their version of ACA called America’s Healthy Future Act, the bill led by Senator Max Baucus gained 60 democratic votes against and 39 opposing Republican votes that December (Skinner & Chandra, 2016). However, the Democrats lost their 60^th seat in the Senate when a Republican senator got elected to finish off the term of deceased senator Ted Kennedy. Since the democrats lacked the 60^th seat needed to pass the bill in the Senate, the budget reconciliation passed the bill to the President’s desk for signature with the required 51 votes (Skinner & Chandra, 2016). On March 21, 2010, the Senate passed its bill version, and President Obama signed it into law two days later.

Challenges Associated with ACA law.

The ACA faced obstacles in implementing healthcare for low-income families and people with serious medical problems due to the financial costs of these programs. Even though Obamacare managed to reduce uninsured rates to approximately 9 percent, the insurance company faced decreasing profits due to the costs of covering pre-existing conditions and preventive care in the health policy (Kantarjian, 2016). Payers in the health sector also felt the increased burden of the older and sicker clients, pushing healthier and younger patients to prefer tax penalties due to the insurer’s high rates. Additionally, in 2012, the Supreme Court allowed states to decide whether to include poorer families in Medicaid coverage, further complicating the implementation of Obamacare (Skinner & Chandra, 2016). Similarly, the Act reduced the competition in the insurance markets since its regulatory policies impacted insurance revenues (Romney, 2012). Thus, some national payers began pulling out of public marketplaces due to their challenges.

Stakeholder Analysis

The four significant stakeholders affected by ACA are patients, employers, states, and healthcare providers. Apart from the federal government, the states became significant players in the ACA as they could accept whether to accept or reject federal financial assistance on state-run Medicaid programs. Furthermore, following the 2012 Supreme Court ruling, the states could provide state-run or a combination of state and federal healthcare exchanges if they did not want to operate in the federally-facilitated Marketplace (Skinner & Chandra, 2016). Thus, the states became crucial in determining the level of implementation of the ACA following its signing into law. Since the law faced fierce republican opposition in its enactment, only 26 states operate in the federally-facilitated exchanges entirely.

For healthcare providers, their financial interests in the healthcare industries got impacted by the ACA since they came as a significant participants in the payment methods of the medical sector. The providers now covering larger populations became affected by several initiatives under ACA, including bundled payment programs and prevention coverage (Housten et al., 2016). As a result, the ACA initiatives pushed providers to integrate to continue providing quality healthcare at lower costs. Actions such as 10 percent bonuses for Medicaid physician coverage improved the incentives for healthcare providers to cover low-income families and increased access to primary care and preventive care (Marks, Weiner & Polsky, 2017).

Employers and individuals benefited from improved access to competitive coverage rates by insurance providers. With the introduction of open enrollment in October 2013, the more transparent competition in the insurance market benefits employers who will be able to save money covering their employees (Marks, Weiner & Polsky, 2017). Nonetheless, ACA also requires employees with more than 50 workers to offer coverage to their staff operating more than 30 hours per week (Gruessner, 2016). The impact here could see larger employers change their workers’ timetables to avoid incurring extra costs or keep smaller companies from expanding their workforce.

For customers, the uninsured American population became the most affected portion of the citizens as millions became expected to register for the program. The congressional budget office expected the number of uninsured young Americans to drop significantly, impacting ACA’s success (Housten et al., 2016). Most citizens already enrolled in employee insurance plans and government programs did not feel the impact of the policy reform. Still, persons with pre-existing conditions enjoyed mainly participated in the initiative due to the inclusion of the new coverage programs.

Policy Options and Analysis of Trade-Offs

All healthcare reforms face trade-offs between different policy options that emerge from the competing parties in the government in the effort to reach a preferred goal. The ACA faced similar contention as the involved stakeholders in the private and public sectors pushed for the reform policies to meet their interests in insurance coverage, health care spending, affordability, and coverage, among other issues (Housten et al., 2016). For instance, the ACA trade-offs between spending and coverage ensured more than 20 million other Americans got health insurance by implementing policies to finance the additional coverage (Marks, Weiner & Polsky, 2017). New requirements for the newly insured to access essential health benefits became financed through new health spending through federal marketplace subsidies (Marks, Weiner & Polsky, 2017). Surtaxes in high-income groups and taxes on health in the health sector funded the increased coverage to more Americans through the ACA initiative.

Similarly, the trade-off between younger and healthier populations against the older and sicker caused insurers’ affordability of health coverage to become pricier. On one end, ACA needed to make healthcare accessible to the older population and citizens with pre-existing medical conditions. On the other, healthcare premiums became required to remain affordable and available to customers. Thus, the policy meant that younger and healthier populations ended up paying higher premiums for their coverage since the risk pool for the insurers grew to include individuals with health conditions (Marks, Weiner & Polsky, 2017). As a result, the younger and healthier incentives faced more incentives to forego the APA plan and opt-in when they fell sick. The ACA policy included a penalty for people that did not get enrolled in the coverage and specified the enrollment period to ensure people did not join when they fell ill.

Healthcare Policy Recommendation

Current policy recommendations in the healthcare sector include changing the federal government’s involvement in expanding the level of coverage. Some policymakers believe that federal programs burden taxpayers at the expense of offering broad coverage to more Americans. For instance, President Trump’s proposal includes cutting federal government support to States and individuals that acquire their insurance coverage by themselves (Oberlander, 2017). President Trump’s recommendations involve federal-state grants to cover their health, but these grants offer less financial support than Obamacare (Young & Fielder, 2019). On his side, the President argues that the state is better at managing the allocated resources than the federal government. Nonetheless, the recommendation would decrease the number of insured individuals. Thus Trump’s healthcare policy will reduce the healthcare budget in the United States while reducing coverage.

Another policy recommendation in healthcare reforms involves eliminating regulations in the health insurance industry and limiting funding for Medicaid. The trade-offs between the costs of covering pre-existing conditions in individuals and the profits of these companies push some policymakers to recommend eliminating the regulations on the health insurance companies (McCarthy, 2017). In this case, removing the guidelines will allow insurers to offer healthier people cheaper plans but increase the cost of healthcare for the sickly population. Another recommendation is to determine the federal government’s contribution to Medicare based on the states’ federal input (McCarthy, 2017). Here, the states would be required to increase their contributions to the federal government with an increase in the number of their citizens covered by federal-funded Medicaid programs. As a result, states might become less capable of offering their citizens Medicaid and covering their health sector costs.

Recommended Roles for Federal Government, State Government, and Current Markets.

The federal government’s role in the healthcare sector should involve formulating policies that improve healthcare quality through fostering competitive healthcare practices. The federal government should implement policies that increase the scope of practice by medical providers to enhance the level of healthcare through competitive practices (Dafny & Lee, 2016). For example, systems that can improve the medical workforce mobility and encourage innovation will empower the health sector to meet the patient’s needs efficiently. Additionally, the federal government can contribute to creating affordable access to medical education and increasing the funding for graduate programs to enhance the strength of the medical workforce and meet the shortages in the health sector (Dafny & Lee, 2016). Addressing the scarcity in the health sector will increase patient choices and improve the competition in the healthcare sector, leading to a higher quality of healthcare while maintaining affordable prices.

State policies and regulations can contribute to healthcare innovation and cost-effectiveness by offering additional incentives to providers and insurance players. Systems that improve the choices and competition in healthcare markets can be formed through the state’s role in repealing or scaling back the Certificate of Need laws. Similarly, enhancing value-based payment structures in healthcare systems improves flexibility and offers market players risk-based incentives (Dafny & Lee, 2016). Therefore, insurance markets can use these incentives to provide their customers with broader coverage choices and play a more significant role in increasing the accessibility of their coverage to an individual to purchase policies that meet their needs. Currently, citizens are forced to choose between limited coverages that offer services they do not need and increase their premium costs. In these ways, the states can utilize flexible insurance packages to increase their insurance coverage for their citizens.

Implications of the Healthcare Policy Recommendations

Population health implications

Healthcare policies from policymakers that push for rebalancing in healthcare systems trade-offs could impact the population’s health by reducing insurance coverage and increasing costs for older and sick patients. More Americans will become unable to access affordable healthcare decreasing the health of a significant portion of the population. President Trump’s recommendations to slash Medicaid can increase the number of uninsured Americans by twenty-three million individuals by 2026 (Young & Fielder, 2019). With fewer insurance covers, more Americans become susceptible to skipping essential preventative health services, which can reduce disease rates through early intervention. Additionally, President Trump’s recommendations might lead to decreased health among older populations due to the increment in the cost of their insurance coverage. The policy calls for the permissible age rating band to change from 3:1 to 5:1 to allow insurance providers to charge older people more for coverage while reducing the premiums for younger people (Marks, Weiner & Polsky, 2017). Consequently, population health can reduce significantly if the old and individuals with pre-existing conditions continue to face increased premium costs.

Economic implications

President Trump’s recommendation reduce the short-term federal spending on the health sector by slashing the spending on Medicaid and Marketplace subsidies. Additionally, it allows insurance providers to work on more economically favorable terms by loosening the regulations around health insurance coverage for the sick and elderly. Federal spending on Marketplaces faced cuts along with Medicaid expenditures of approximately $1.111 billion between 2017 and 2026 (Marks, Weiner & Polsky, 2017). However, the economy might end up spending more money to treat diseases that could be preventable through affordable access to preventive care. As a result, the economy could lose its workforce and resources to treat such cases. Additionally, the $385 billion annual costs of medical care through Medicaid come substantially lower than that of private coverage (Mody & Blackwood, 2018). Thus, while the government budget will gain from cutting funding to Medicaid, the result is that states and individuals will be forced to spend more to acquire private insurance coverage.

Political Implications

ACA lacked bipartisan support during its enactment bringing sharp opposition from states and districts when it got implemented. As a result, the Supreme Court’s ruling in 2012 allowed states to choose their insurance coverage systems. Similarly, Trump’s policy recommendation lacks public and bipartisan support in its formulation, pushing millions of Americans out of Insurance coverage. Democratic candidates like Bernie Sanders look to improve and build on Obamacare, but Trump’s policies aim to repeal and replace the ACA (Krugman, 2020). While the 2017 move by the republicans to phase out the ACA failed to make it through the United States Senate, Trump’s policies look to push through with the effort to cut Medicaid spending and the ACA (McCarthy, 2017). In 2017, congress repealed the individual mandate under the ACA, with the Tax Cuts and Jobs Act (TCJA) coming into force in 2019 (McCarthy, 2017). The republican congress members supported the TCJA policy, which led to zero penalties for people that did not maintain essential healthcare coverage. As a result, ACA’s ability to sustain broad coverage through premiums from healthy populations faced more challenges that could lead to economic imbalances. Ultimately, the Republicans seek to repeal and replace the ACA in single attacks or take it entirely down.

Implications for Health Care Organizations

Healthcare organizations such as insurers and hospitals were also impacted by President Trump’s initiative to cut down on funding for Medicaid and deregulation of the insurance sector. On the one hand, the government comes as a primary payer in the healthcare industry, and its move to reduce Medicaid means that more Americans will be forced to turn to private insurers. As a result, private insurers seek to gain from the millions of Americans that might get pushed out of government-sponsored Medicaid. The President’s reform policy also focused on more enormous tax breaks for drug and insurance companies providing billions of dollars of tax relief (Young & Fielder, 2019). Both the President and Speaker Paul Ryan acknowledged that the health reforms come as tax reforms too. Health insurers will also benefit from lifting policies on unlimited premiums for people with pre-existing conditions.

Conclusion

ACA healthcare policy offered significant initiatives to increase health insurance coverage to Americans that significantly reduced the number of uninsured people following its implementation. However, the plan lacked bipartisan support in support and execution, which later saw the application of the Act limited by the Supreme Court in the states. Additionally, the policy faced significant challenges in the initial cost of increasing coverage, while some of its guidelines reduced competition in the health sector. States became vital stakeholders in ACA since the Supreme Court ruling allowed them to choose to engage in their state-run or federally-facilitated health insurance exchanges. Healthcare providers also became significant stakeholders since the policy introduced bundled payments and regulated policies covering older and sickly populations. Employees and consumers similarly featured as parties affected by the changes under ACA as policy options and trade-offs impacted the coverage and prices of healthcare insurance. Healthcare recommendations from the current administration currently call for the federal and state government and the market to play a more significant role in ensuring the market remains competitive and offering flexible insurance plans. However, President Trump’s recommendations will bring adverse impacts to the uninsured population while reducing federal spending on healthcare and still coming as partisan health reforms.

References

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