Affordable Care Act
The ACA (Affordable Care Act), also known as the Obamacare, is a U.S federal statute that became operational on March 23, 2010. This Act represents the most noteworthy regulatory overhaul and revamp of the health care system in the United States since the Medicaid and Medicare were passed in 1965. The goal of the ACA was to increase the access, affordability and quality of healthcare insurance, reducing the uninsured rate by spreading out the private and public insurance coverage, as well as reducing the costs associated with insurance for both the government and individuals (Torinus, 2013, p. 3). It introduced several mechanisms such as insurance exchanges, subsidies, and mandates, which were meant to enhance the affordability and coverage. This law mandates the insurance companies to provide all applicants with insurance coverage within new minimum standards. It also the insurance companies to offer uniform rates irrespective of gender or preexisting conditions.
According to the Congressional Budget Office, the ACA had the potential to reduce both the Medicare expenditure and the future deficits. On June 28, 2012, in the case of NFIB vs. Sebelius, the Supreme Court maintained the constitutionality of the Act’s individual mandate as an exercise of taxation powers by the Congress (Persily, Metzger& Morrison, 2013, p. 73). Nonetheless, the court also ruled that states could not be compelled to participate in the Act’s Medicaid expansion scheme under penalty of forfeiting their current federal health care funding. Following this ruling, the law, as well as its administration continues to face dispute in federal courts, in the Congress, and from certain conservative advocacy groups and state governments.
The ACA includes a number of provisions that become effective between 2012 and 2020. The grandfather clause exempts policies that became operational before 2010 from most of the amendments to insurance standards, even though other provisions affect them. Noteworthy reforms, most of which become effective by January 1, 2014, comprise minimum standards for healthcare insurance, guaranteed issue that preclude insurers from refusing coverage to individuals because of preexisting conditions, and health insurance exchanges, which commence operations in all states.
An individual mandate requiring all persons not covered by Medicare, Medicaid, and employer sponsored health plan, or public insurance schemes to obtain an approved and official private insurance scheme or pay a penalty is also a provision. The Act also enforces a provision that allows low-income families and individuals with incomes between 100 percent and 400 percent of the federal poverty level to obtain federal subsidies when they procure the insurance through an exchange (Heilemann & Halperin, 2010, p. 41). However, the ruling in the NFIB vs. Sebelius case provides states with the leeway to abscond from the Medicare expansion, and a number of states have done so.
The Affordable Care Act comprises of a myriad of measures aimed at regulating the cost of healthcare and the increase of coverage through private and public insurance. An individual mandate, together with extensive subsidies for private insurance was considered as the most effective way of ensuring senate support for a universal healthcare scheme because it had featured in prior healthcare reform proposals. The ACA espouses two principal mechanisms for enhancing insurance coverage (Jones, 2013, p. 11). The first includes expanding the eligibility to encompass persons within 138 percent of the federal level of poverty while the second includes the creation of state-based insurance exchanges to sell health insurance plans to individuals with incomes ranging between 100 and 400 percent of the federal poverty levels.
A July 2012 by the Congressional Budgetary Office raised the anticipated number of uninsured individuals by three million, which reflected the successful legal problem in the implementation of the ACA in expanding Medicaid. Among the groups that will remain uninsured include unauthorized immigrants, citizens who have not registered for Medicaid even though they are qualified, citizens living in states that have opted out of the program, and citizens not covered by the plan but prefer to pay the yearly penalty over purchasing insurance (Jones, 2013, p. 14). The architects of the ACA believed that increased coverage of healthcare would both improve the quality of life and assist in reducing medical bankruptcy. Additionally, many were of the conviction that the expansion of coverage would help in ensuring the successful functioning of cost controls.
According to the proponents of the ACA, healthcare providers could easily adjust to reforms in payment systems that incentivized value more than quantity if mechanisms existed to offset partially their costs. Under the ACA, workers whose employers provided reasonable coverage are not entitled to subsidies in the exchanges. For one to be eligible as outlined by the Act, the costs associated with employer-based health insurance must surpass 9.5 percent of the employee’s household income (Dietrich & Anderson, 2012, p. 49). The Act sets up regulated, state-based health insurance exchanges. These are online marketplaces managed by either state or federal government, where small businesses and individuals may pay for private insurance schemes.
The insurance exchanges are structured to provide market for private insurance while addressing the market breakdown in the current system, which include coverage limits, medical bankruptcies, inflation, lack of affordability, and high number of the uninsured population. The ACA is designed to permit some level of flexibility by permitting states, from 2017 and beyond, to apply for an exemption for state innovation that permit them to conduct trials with their unique state-based systems, as long as such systems meet predefined conditions.
To be granted waiver, states must enact legislation that establish an alternative healthcare system providing insurance that is at least as ample and cost effective as the one offered under the ACA, does not raise the federal deficits, and covers as many residents. The ACA comprises regulations that establish the standards of insurance, some of which are defined by the law. Among the new standards are the prohibition on the dropping of policyholders when they get sick, a prohibition on price discrimination based on gender or pre-existing conditions, and permitting children and dependants to be covered by their parent’s insurance scheme until they attain the age of twenty-six.
In the wake of Supreme Court ruling in the case of NFIB vs. Sebelius, a number of states with governorship or legislatures controlled by Republicans chose to throw out the Affordable Care Act. More than fifty percent of the uninsured United States citizens reside in these states. Twenty-five states, together with the District of Columbia, had adopted the Affordable Care Act as of September 2013 (Persily, Metzger& Morrison, 2013, p. 73). A small number of states remain undecided. The states that have rejected the implementation of expanded Medicaid before the year 2014 have the option of opting in the future. Bureaucrats in a number of states have decided to contest the provisions of the Affordable Care Act over which they can exercise discretion. For instance, Missouri refused to set up a health insurance marketplace or expand Medicaid, but also pursued a program of non-cooperation and insolence by enacting a statute that prohibited any local or state official from rendering any aid not expressly necessitated by the federal law with regard to the operation of the Affordable Care Act.
A tough partisan difference in Congress has precluded any amendments to the provisions of the Act. Nonetheless, at least one amendment, the proposed rescission of tax on medical equipment, has received bipartisan endorsement. Some republicans have been against the amendments to the Act on grounds that such an undertaking would erode the arguments for its repeal. The argument advanced by republicans for the repeal of the ACA was that it would lead to loss of jobs. They contended that the Act would occasion the loss of approximately 650,000 jobs, attributing this estimate to the Congressional Budgetary Office report (Boehner & United States, 2011, p. 3). Nevertheless, the CBO noted that the figure was not included in any of its reports and that the statement by Republicans badly misrepresented the stand of CBO regarding the law.
This ACA represents the most noteworthy regulatory overhaul and revamp of the health care system in the United States since the Medicaid and Medicare were passed in 1965. This law mandates the insurance companies to provide all applicants with insurance coverage within new minimum standards. It also the insurance companies to offer uniform rates irrespective of gender or preexisting conditions. The Congressional Budget Office contends that the ACA had the potential to reduce both the Medicare expenditure and the future deficits.
References
Boehner, J., & United States. (2011). Obamacare: A Budget-Busting, Job-Killing Health Care Law : A Report on the Economic and Fiscal Consequences of the Patient Protection and Affordable Care Act (public law 111-148) & the Health Care and Education Reconciliation Act (Public Law 111-152). Washington, D.C.: U.S. House of Representatives.
Dietrich, M. O., & Anderson, G. D. (2012). The Financial Professional’s Guide to Healthcare Reform. Hoboken, N.J: Wiley.
Heilemann, J., & Halperin, M. (2010). Game Change: Obama and the Clintons, McCain and Palin, and the Race of a Lifetime. New York, NY: Harper.
Jones, D. A. (2013). The Simple Reader’s Guide to Understanding the Affordable Care Act (ACA) Health Care Reform. Bloomington, IN: Abbott Press.
Persily, N., Metzger, G. E., & Morrison, T. W. (2013). The Health Care Case: The Supreme Court’s Decision and its Implications. Oxford, UK: Oxford University Press.
Torinus, J. (2013). Opt Out on Obamacare, Opt Into the Private Health Care Revolution. New York, NY: BenBella Books, Inc.
