Analysis of the Patient Protection and Affordable Care Act

Overview

Health care and healthcare policy has continued to evolve over the last century. At the end of the 19^th century due to the advancements made in the medical and research field, public health projects were implemented to fight some of the leading causes of disease and to provide health awareness and to raise the overall health of the general population. Some disease were practically eradicated. With concern of the general health and welfare of the nation, healthcare programs were extended into the schools through school nurses. (Fillmore)

During the first part of the 20^th century, the US witnessed the establishment of the first large medical insurance company, the rise of private health insurance, and employer and labor union sponsored health care. (Fillmore) However, it was not until the 1930s-1940s that the federal government began to consider the true need for all citizens to have fundamental healthcare. Franklin D. Roosevelt, during his 1944 State of the Union Address, established the political idea that citizens of the United States should have the fundamental right to adequate health care. This political philosophy been the premise on which governmental health care policy has founded upon. Over the past half-century, government’s involvement in health care and in the development of healthcare policy had increased due to the rapid rise in healthcare cost and general concern over rising health issues minorities, and individuals living in poverty. “Without adequate health care, no one can make full use of his or her talents and opportunities. It is thus just as important that economic, racial and social barriers not stand in the way of good health care as it is to eliminate those barriers to a good education and a good job.” (Kaiser Health News, 2009)

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Healthcare Reform Legislation

            Historically
the United States has tried to avoid providing universal healthcare for all
citizens. Instead, financing healthcare continued to be linked to employment. (Landreanau, 2003) In part, this avoidance has been directly related to the
general public’s view of democracy, laissez-faire economics and a general fear
that government sponsored universal healthcare can lead to socialism. It has
only been during times of great economic and social need that the federal
government has been able to successfully implement healthcare policies and
programs on a broad spectrum. Debate over national health insurance has been
raging for over a half of century.

1930-1950s

Beginning with
the heavily contested Social Security program of 1935. The Social Security Act
provided grants for Maternal and Child health. As early as 1943, proposals by
Senators Wagner and Murray in conjunction with Representative Dingell
introduced a bill to provide a universal comprehensive health insurance as part
of social security. The proposed changes would have provided a birth to death
social insurance for the American public. The proposal did not pass during the
1943 legislative session. In 1944, the Social Security Board advocated for a
compulsory health insurance as part of the Social Security System. In 1946,
even with a new executive in the White House, advocacy for a national health
program continues. In 1946 and 1947, a revised Wagner-Murray-Dingell bill is
reintroduced to Congress for a National Health Program. This bill has executive
support, but Congress failed to act upon the bill. The nation continues to
grapple with how to deal with the increasing number of citizens’ without
healthcare. In 1954, to provide incentives for employers to provide employee
healthcare coverage and in keeping with the philosophy of limited government
intervention into this area, the Revenue Act of the 1954 was passed. This act
provided tax deductions for employers that contributed to employee health plans. (Kaiser Family Foundation, 2017)

1960-1970s    

In the 1960s,
the United States healthcare system continued to grapple with the question as
to how to provide healthcare coverage for unemployed individuals, the elderly,
and children. In 1965, the US began to see major healthcare change. With the
passage of the Social Security Amendments Act of 1965, Medicare and Medicaid were
established. These programs are still in existence today and have continued to
be expanded upon. (Kaiser Family Foundation, 2017)

The 1970s
brought a season of inflation, high unemployment, and unrestrained rising
healthcare costs. These concerns were creating a growing concern politically,
socially, and economically. Once again, policymakers began to advocate for
National Health Insurance. In 1973 President Nixon signed the Health
Maintenance Organization Act. This piece of legislation was beneficial because
it removed barriers that prohibited HMOs at the state level, provided
subsidizes for qualified HMOs and mandated employers who provided employee
health insurance to offer HMO options when possible. President Nixon hoped that
HMO Act would be a springboard for his Comprehensive Health Insurance Plan. ”The national health insurance bill that I will be submitting
to the next session of this Congress will allow patients to use such insurance
to join HMO’s. For that reason, it is particularly important that this
demonstration effort get underway immediately and build upon the momentum which
has already been achieved in this field.” (Nixon, 1973) This proposal
never saw fruition because it was overshadowed by the political scandal
surrounding his presidency and subsequent resignation. As the economy continued
to decline, policymakers began to focus on the necessity to contain healthcare
cost in addition to providing coverage for uninsured. (Kaiser Family
Foundation, 2017)

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1980-2000

Each decade continue to expand government’s role in healthcare and the provisions provided to the public. Debate was often heated among policymakers about the expansion of government into healthcare, but governmental programs continued to expand due to concern for the general health and welfare of the public. In 1980, the Medicare Catastrophic Coverage Act was passed. In 1990, the Clinton Administration decided to make National Health Coverage a priority. Even though the proposed Health Security Act of 1993 failed to pass, once again the Nation is facing the questions of how to deal with rising healthcare cost,
the free market, and the uninsured. Despite the expansion various government sponsored health program and government based incentives, the number of uninsured continued to rise. (Cohen, et.al, 2009)

From 1968-1980, for individuals under age 65, private insurance coverage was 79%. This percentage remained relatively until the recession of the 1980s. From 1980 until 2007, the percentage of individuals under the age 65 with private coverage continued to decline at an average rate of 1% per year. This downward trend of private, employer-sponsored insurance continued to illustrate national need for healthcare coverage for all citizen. (Cohen, et.al, 2009)

As states
began to realize that comprehensive healthcare reform was not going to happen
quickly at the national level, several states began to invest research and
funds into designing comprehensive healthcare reform at the state level. Massachusetts
and Vermont successfully pass legislation in 2006. These plans become a working
model for the Patient Protection and Affordable Care Act of 2010.

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Patient Protection and Affordable Care Act of 2010

            The
Patient Protection and Affordable Care Act, frequently called “Obamacare” was
signed into law March 23, 2010. This revolutionary, controversial, single piece
of legislation expanded government’s role in healthcare and mandated a basic
level of healthcare. It transformed the relationship between the individual,
business, and the federal government. (Twight, 2009) Prior to this sweeping
piece of legislation, the decision to have or not have health insurance was an
individual choice. It was considered a fundamental right to make an informed
choice. Prior to the passage of the Patient Protection and Affordable Care Act,
access to health care was limited to those that could most afford it, despite
governmental programs such as Medicaid and Medicare.

            One
understands how this sweeping piece of legislation was initially favored and
supported by many. The “policy window of opportunity” was open due to
skyrocketing health cost, limited access to health services, rising health
problems, increasing premiums, and patient spending on deductibles outpacing
wages. (Altman, 2016) In 2008, 27% of the nonelderly with three or more chronic
conditions spend more than 10% of their income on healthcare. In 2010, the
United States spent 2.6 trillion dollars on health care. (Henry J Kaiser
Foundation, 2012)

 After an approximate 50 year period of
increasing governmental involvement in healthcare and public acceptance through
programs such as Medicaid, Medicare, Veteran Health Affairs (VA), a large
portion of society seemed eager to see this type of legislation become a
reality. Proponents of a national health care system were able to garner the
support of the majority in the Legislative Branch and Executive Branch and with
creative marketing and “politicking” ensured that the bill became law.

After a decade
it is time to evaluate the policy.

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There are
several main components to the Patient Protection and Affordable Care Act. First,
it prohibits insurance companies from denying coverage for individuals with
pre-existing conditions and coverage cannot be revoked except for incidences
involving fraud. Second, each state is required to establish a Health Benefit
Exchange to allow businesses and individuals to purchase insurance and states
are required to establish a minimum of one reinsurance entity to expand available
coverage. Third, individuals must purchase basic health insurance or incur a
fine. Fourth, employers with fifty or more employees must provide health
coverage for incur a fine whereas, business with twenty-five or fewer employees
can receive a tax credit for the company’s health coverage expenses. Fifth, states
would be allowed to prohibit qualified insurance plans from covering abortions
and no federal funds would be allowed to be used for abortions. Sixth,
beginning 2014, sates are allowed to expand Medicaid coverage to low-income
residents under the age of sixty-five. Finally, expanded coverage for seniors
and low-income residents through Medicaid was provided and reimbursement plans
were reformed to curb fraud and to help curb the rising costs of prescription
drugs. (Auerbach, 2017) After
taking a comprehensive look at the Affordable Care Act, two broad categories
exists: (1) expansion of health insurance and (2) reformation of the healthcare
delivery system. (Blumenthal, Abrams,
& Nuzum, 2015)

Effectiveness

One of the
primary goals of “Obamacare” was to ensure that Americans have affordable
healthcare coverage, access to services, and to control health care costs. Under
the law, the number of uninsured nonelderly Americans decreased from 44 million
in 2013 to less than 28 million as of the end of 2016. (Henry J Kaiser Family
Foundation, 2017)

Many Americans
would forego medical treatment due to lack of insurance or lack of funds. The
Affordable Care Act was created to ensure that the over health of the
population improved. Medical professional and government officers agreed that
lack of medical care often led to higher medical costs due to untreated illness,
lifestyle diseases such as Type 2 Diabetes, Obesity. Since the passage of the
Affordable Care Act more Americans report that they have a primary doctor and
have sought preventative medical care within the last twelve (12) months.

Surveys show that the newly insured are pleased with
their coverage. Three quarters of those seeking to make an appointment with a
primary care physician or a specialist secured appointments within 4 weeks or
less. (Blumenthal,
2015)

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The Council
of Economic Advisors (CEA) reports improvements in the area of individual
health. Reports show the rate of hospital-acquired infections in the United
States declined by 21 percent between 2010 and 2015 with an estimate 125,000
fewer patients died in hospitals. Medicare patients’ hospital readmission rates
declined substantially; an estimated 565,000 readmissions were avoided between
2010 and 2015 as a result of the Hospital-Acquired Condition Reduction Program (HACRP) of the
Patient Protection and Affordable Care Act (ACA). (The Advisory Board Company, 2016)

The data clearly supports that more individuals have access to health care
and improved health conditions due to measures provided in the Affordable Care Act
such as the Hospital-Acquired Condition Reduction Program (HACRP), individual
wellness programs, preventative care, prohibitions for health care policy
recissions, elimination of annual and lifetime limits for benfits and coverage,
enrollment denials due to pre-existing conditions,and most importantly capping
out of pocket expenses.

 Yet, in 2016, 27.6 million
Americans still remained uninsured. The uninsured still site cost as the main
reason for lack of coverage. Despite the ACA’s insurance subsidies, many still feel that
insurance costs are too high and unaffordable. (KFF Updated: Nov 29, 2017 | Published: Sep 19, 2017, 2017) One
of the reasons that individuals may find the cost of coverage prohibitive is in
part due to the regulations in the ACA. An example being a married couple in
North Carolina. The husband is self-employed and the wife is eligible for
employer sponsored health care. The wife may purchase spousal insurance from
her employer. The cost of the wife’s spousal plan may be more costly than the
couple can afford to purchase. In this scenario, the husband will not qualify
for insurance subsidies should he wish to purchase insurance outside of his
wife’s employer.

The total
number of newly insured fell short of the original estimate because many them
had previous coverage but had to reenroll because their plans did not meet the
new standards. (Blumenthal, 2015) Of the 17.7 million persons who gained access
through the ACA, 14.5 million were enrolled in Medicaid and CHIP programs.
(Mofit, 2016) Which questions the success of the healthcare exchanges.

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            Prior to 2010, medical costs were skyrocketing. Uncontrollable costs were
outpacing the public’s ability to pay for healthcare. An essential part of the
ACA is directly related to health care cost containment. Part of the ACA’s cost
containment plan involved incentives and penalties for medical performance,
coordination of care, bundling payments, and the development of Accountable
Care Organizations.        

Beginning in 2012, hospitals with higher than expected readmission rates were penalized. Progams were expanded to reduce the number of patient related conditions acquired while the patient was hospitalized. Costs and payments were restructued to help contain rising medical costs. Through Accountable Care Organizaitons (ACOs) doctors, hospitals, and other medical entities come together to coordinate care. The goal is to ensure that medical servcies are not duplicated, ensure quality patint care, and coordinate overal services. Providers that are part of an ACO will share in the savings (financial incentives) but will also experience risk for patients that have greater expenses than what is deeped necessary. (Blumenthal, 2015) Despite strong advocay for this model, it has not been as successful as orginially hoped. Savings has not occurred on the scale that was estimated. “ACO growth has slowed and the downward trend is expected to continue (http://www.fiercehealthcare.com/story/3-reasons-slowed-aco-growth/2013-11-01) because the market is tapped out, there is no proven ACO model and payers are reluctant to offer ACO contracts.” (Sullivan 2013) “The Pioneer ACO Model is one of the more progressive initiatives coming out of the Obamacare health reform, but seven of the pioneer ACOs report no savings, and two others are leaving the program completely. Richard Foster, an analysts with the Centers for Medicaid and Medicare Services, estimates that national health spending would increase by an estimated $311 billion dollars. This projection exceeds increases that would have occurred had the Affordable Care Act not passed. (Mofit, 2016)

Efficiency

From the
beginning, the ACA has been problematic. Starting with legislative development.
“By our count at the Galen Institute, more than 70 significant changes have
been made to the Patient Protection and Affordable Care Act, at least 43 that
the Obama administration has made unilaterally, 24 that Congress has passed and
the president has signed, and three by the Supreme.” (Turner, 2016) Therefore,
the law that was passed is not the law that is in existence today. From the
start, it was easy to see that the original objectives of the policy would not
be achieved and that the cost of the program as designed would far outweigh the
benefits to society as a whole. (Turner, 2016)

One of the
first issues that must be addresses is the overreaching nature of the legislation.
Many individuals object to the ACA because the costs are considered to be too
high: politically and financially. According to Christopher Conover, Duke
University professor of health policy, “Obamacare has done more to eviscerate
the rule of law & constitutional design than any other major statute”
(Conover, 2016). Opponents claim that ACA will transfer one-sixth of the US
economy into the hands of politicians and agency bureaucrats. (Manchikanti, L.,
& Hirsch, J. A. (2012)

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Several major
issues have occurred causing Americans concern over the advisability of the
ACA. First, President Obama promised the American public “if you like your
plan, you can keep your plan”. This was not the case. Insured Americans were
upset and surprised when insurance companies canceled policies that did not
meet the new minimum standards set by the ACA. Second, new marketplace
restrictions were placed thereby restricting access to providers in an effort
to control costs. Third, increased premiums have forced individuals to purchase
plans with large deductible and high copayments. (Blumenthal, 2015)

Americans are
feeling the financial pressure due to the ACA. Premiums have soared. The
Congressional Budget office predicts that premiums growth will accelerate over
the period between 2016 and 2025. Projections show increases of approximately
60% with an annual increase averaging 8%. (Mofit, 2016)

            American’s
tax bill is rising due to the ACA. It is projected that between 2016 and 2025 “Americans
will pay an estimated in $832 billion in taxes, including taxes on health
insurance plans, drugs, and medical devices that will be passed on to the
middle class. (Mofit, 2016)

            The
ACA provides for health insurance exchanges. These entities are a “Health Insurance Marketplace, a service available in every state
that helps individuals, families, and small businesses shop for and enroll in
affordable medical insurance.” (Exchange – HealthCare.gov). Though touted be
similar to health insurance exchanges in the fee marketplace, instead, ACA
exchanges are heavily regulated and federally supervised. After six year and $5
billion dollars in expenses, only 13 states are operating their own exchange. Critics
site this a waste of funds. (Mofit, 2016)

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                In general, American’s have a
somewhat negative image of the Affordable Care Act. “Forty-four percent
surveyed in Gallup’s most recent update approve of it, compared with 51% who
disapprove. The public’s approval of the healthcare law has consistently been
below the majority level in recent years, ranging from a high of 48% shortly
after Obama won re-election in 2012 to a low of 37% approval in late 2014.

Equity

Reportedly,
this is one the ACA’s stronger points. With new ACA regulations, obtaining
coverage has been made less discriminatory. ACA legislation prohibits age,
race, gender, and disability discrimination. “Section 1557 extends
nondiscrimination protections to individuals participating in:

• Any health program or activity any part of which received funding from HHS
• Any health program or activity that HHS itself administers
• Health Insurance Marketplaces and all plans offered by issuers that participate in those Marketplaces.

Section
1557 has been in effect since its enactment in 2010 and the HHS Office for
Civil Rights has been enforcing the provision since it was enacted.” (HHS Office of the
Secretary,Office for Civil Rights & OCR, 2018)

 ACA has attempted to ensure that healthcare coverage is available and affordable for all. The legislation provides subsidies for those that are least able to afford the healthcare. However, administration delayed implementation of the Basic Health Program designed to provide more affordable coverage for certain low-income people not eligible for Medicaid until 2015. (Turner, 2016) However, disparities still exits for those that cannot afford to pay.

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Political Feasibility

The ACA’s
mandate requiring all individual to have healthcare has been unprecedented. The
requirement to maintain health insurance or pay a penalty has been highly
contested. Critics state that the ACA is a violation of personal liberty and a
prime example government overreach. Critics proclaim that individuals should
have the right to determine if they wish to engage in “commerce”; to join the
insurance market place to purchase insurance.

In other areas
the Affordable Care Act has been filled with problems and mishaps. Administratively,
the Affordable Care Act has proven to be a policy and political nightmare. Beginning
with the rollout of the program, technical and operational difficulties with
the computer programming and the federal government’s website made it almost
impossible for consumers to enroll in the health insurance exchanges during the
2013 rollout of the healthcare.gov website. Frustration levels were high and the
public rapidly began to become disenchanted with the process. According to the
Department of Health and Human Services Office of Inspector General, “ ‘Most
critical were the absence of clear leadership, which caused delays in
decision-making, lack of clarity in project tasks and the inability of CMS to
recognize the magnitude of the problem as the project deteriorated.’ “(Moffitt, 2016)

The best illustration of the political fallout over the
ACA can be seen in the results of the last election. Opponents of the ACA have
now taking political control of the legislative branch and the executive
branch.

Conclusions

            The Affordable Care Act is
a sweeping piece of revolutionary legislation that attempted to tackle too many
issues at one time. The ACA “launched too many divergent experiments and lacks
a coherent strategy.” (Blumenthal, 2015). The ACA has successfully expanded
healthcare coverage to millions of Americans but at the price of personal
liberty and the free market. The current law reinforces third-party payment and
restricts personal choice in health plans and coverage options. The ACA has
created a constitutional nightmare over challenges ranging from taxing
authority to separation of church and state issues. (Blumenthal, 2016)

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            It
is interesting to note, that for the past 15 years, according a Gallup poll, a
majority of American have rated the quality of their personal healthcare as
either excellent or good. Yet, when asked if the healthcare law had helped or
hurt the healthcare situation in the U.S., or if it has had no effect, forty-five
percent of Americans responded that it hurt the healthcare situation, 37%
responded helped it, with the rest (12%) responded saying it had no effect. Gallup
Polls show that if given a choice Americans prefer a privately run healthcare
system over a system run by the government. (Gallup Inc., 2016). Seventy-three
percent (73%) of employed Americans say the healthcare
system is “in a state of crisis” or “has major problems”. There
is little difference between American workers’ attitudes on the healthcare
system and the overall U.S. public, among which 71% of all Americans state that
the system is in “crisis”. (Gallup, Inc., 2017)

            It
is apparent that the current system is in need of revision. President Trump,
promised Americans that his Administration would repeal and replace
“Obamacare.” According to a Gallup poll in early 2016, 58% of American favor
repealing the healthcare law and replacing it with a federally funded
single-payer system designed to cover all American. It is interesting to note
is that the public wants a federally funded system, but did not mention a
system “run” by the government.

            Repealing
the Affordable Care Act would leave a huge whole in many American’s healthcare
and healthcare coverage without proper intervention and legislation. It would
be necessary to have a working plan, not just theory and political rhetoric. According
to the research conducted by the Heritage Foundation a good workable plan would
include several factors: (1) replacing the existing tax system for commercial
private health insurance with a national tax credit system, (2) provide funding
for the economically disadvantaged, and (3) transform Medicare into a premium
support program. (Politics &
Government Week, 2012) These are sound principals but should include a
defined contribution plan. A defined contribution plan addresses the health
care needs of Americans through the creation of a system that offers defined
contributions to an employee’s health plan. This would empower employees to
make decisions about their own health coverage. The program is similar to
approach of the health insurance system that currently covers 9 million federal
workers, dependents, and retirees. (Turner). This is a possible solution
but it would be necessary to adjust the tax liability of these plans. Continuing
to ensure that coverage is not denied to individuals and maintaining the social
equality of healthcare is essential.

                Prior to the passage of the ACA,
our healthcare system was in need of adjustments. However, ACA has proven to
not be the answer. Returning to a free market will encourage competition and return supply
and demand to the equation. Continuing to providing safeguards against coverage
being dropped and/or denied will need to remain part of any new plan
development.

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