Good Report On The Patient Protection And Affordable Care Act Of 2010
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The Patient Protection and Affordable Care Act (PPACA) of 2010 was signed into law by President Barack Obama on March 23, 2010. The legislation is a comprehensive health reform effort that is also referred to as “Obamacare” or the Affordable Care Act (ACA). Due to the sweeping area of impact and massive complexity, the PPACA is highly controversial and serves as a political platform for Democrats and Republicans alike. Perhaps due to the wide scope of factors involved, including the intricate operations of the economy, the general public is informed of only parts and pieces of the law; taken out of context of the interacting systems, one portion of the law is easily misunderstood.
The PPACA is primarily concerned with mandating every American have some coverage of health insurance. Almost immediately after the law was enacted, health insurance marketplaces appeared and businesses hustled to create acceptable coverage for their employees. Frequently, employee responsibility for partial payments on the premiums increased. Co-pays and deductible amount increased, causing public outcry against the law. Many previous insurance customers were told they could no longer be covered under their original insurance. But while the yea- and nay-sayers of the PPACA are highly vocal and estimates of statistical effects vary from one source to another, there is no doubt that the PPACA has made huge headway toward improving the availability of health care of United States citizens.
However, the question remains as to whether the PPACA actually supports health care for all Americans or is it simply an elaborate way to reinforce the partnership between the government and health insurance companies? The answer to this question is the purpose of the literature review in this paper.
Berwick (2011) expressed his approval concerning the results of the PPACA in a statement presented from the House of Representatives to the Committee on Ways and Means from the United States House of Representatives. He addressed the creation of the revised Patients’ Bill of Rights; the document allows American families to regain the control of their health care insurance coverage. Richard Foster (2010), the Chief Actuary at the time, drafted a memorandum to the Centers for Medicare and Medicaid Services (CMS) stating the assumption that individuals and employers would required approximately 3 to 5 years to completey adapt to the options offered in the new health care marketplaces. Furthermore, he predicted that by year 3 of the implementation, the additional enrollment of people under the expanded Medicaid coverage program would be complete. His estimates did not include the full 10-years cost of the PPACA because of effects of transition and due to most provisions for coverage would be in effect only 6 of the 10 years of the budget period (Table 1).
* Excludes Title IX revenue provisions except for sections 9008 and 9015, certain provisions with limited impacts, and Federal administrative costs.
† Includes expansion of Medicaid eligibility and additional funding for CHIP.
‡ Includes estimated non-Medicare Federal savings from provisions for comparative effectiveness research, prevention and wellness, fraud and abuse, and administrative simplification. Excludes impacts of other provisions that would affect cost growth rates, such as the productivity adjustments to Medicare payment rates (which are reflected in the Medicare line) and the section 9001 excise tax on high-cost employer plans.
Provisions of the PPACA (Foster, 2010)
As shown above, the costs of the provisions supporting expanded health insurance coverage are predicted to total $828 billion through the fiscal year 2019. This includes changes in Medicaid eligibility and additional funding for the Child’s Health Insurance Program (CHIP). The categories of Medicaid, Medicare, immediate reform provisions, CLASS, and growth-trend are believed to create a net savings of approximately $577 billion; therefore, the overall net cost will be $251 billion before administrative expenses and increased Federal revenues from the excise tax imposed on employer sponsored high-cost health insurance coverage and other provisions.
Furman (2014) reported on the release of an analysis by the Congressional Budget Office (CBO) addressing the impact the PPACA was having on labor in the United States. It was laying the groundwork for future growth and providing for the financial security of American families by:
Putting money into the pocket of families while providing the security of healthcare insurance coverage. The analysis stated that 2 million people had selected plan from the insurance marketplace. They benefited from tax credits and assisted in cost sharing averaging $4700 per person. It estimated 11 million people would benefit by 2015; according to a report by the U.S. Department of Health and Human Services, that number is now over 8 million (HHS.gov, 2014).
The cost of health care is decreasing attributable to changes in Medicare; this allows lower insurance payments for employers, allowing more money to hire new workers.
Improving the health of workers makes them more productive with less sick days. This is accomplished through quick treatment of illness that is not put off for lack of finances and the preventive services offered through the PPACA. In addition, healthier people are more likely to get and keep jobs (Graph I). In addition, health care facilities are more efficient due to pay-for-performance incentives in place to reduce hospital readmissions due to improper recovery on the initial visit.
Before the PPACA, workers were locked into inadequate employment due to dependence on the health insurance provided. Now, personal provision of health insurance allows
Graph I. Self-Reported Health of Employed Workers
workers to move for better jobs with a higher income and possibly even become entrepreneurs.
The CBO estimates that between 2013 and 2022, the PPACA will reduce the federal deficit by $109 billion through the multiplier effect.
Sorrell (2012) addressed the ethical issues of the PPACA in a “theory of social justice” in providing for the many without detracting from the rights of even a few. The adoption of the law has shifted adequate health care from a privilege to a citizen’s right.
Somers (2014) discussed the relationship between health insurance companies and the PPACA. Initially, the insurance industry perceived the law and health plans as invasive and a number of large carriers such as Aetna and United Health to pull back operations to only a few states and participate in only a few marketplace options. Some companies merged in order to secure Medicare and Medicaid enrollments, as when Aetna bought out Coventry Health. The PPACA completely restructured insurance plans with the elimination of plan limitations, out-of-pocket maximums, rescissions, and medical underwriting. Whatever the fears of the insurance industry concerning the PPACA, in the third quarter of 2013, America’s five leading companies (UnitedHealth, Cigna, Humana, WellPoint, and Aetna) announced strong numbers, reflecting an increase in stock performance and sales.
Patrick (2015) debates the mandate on insurance companies to spend 80 percent of premiums on health expenses on companies that have 50 or less employees and 85 percent on large plans; otherwise, the insurance company is required to give rebates to their members. While medical costs are continuing the rise, the trend is slowing. This is attributable to the changes, particularly in payments for Medicare patients, set in place by the PPACA. The costs are reflected in insurance premium increases, but they also are not rising as quickly as before. Hospitals and other care facilities are given pay-for-performance standards that dictate better care, fewer hospitalizations, and the use of retail clinics are dropping expenditures. Patrick states that a study conducted by PwC Health Research Institute, when the total increases in medical costs are analyzed it can be seen that only 19 percent of the increases are attributed to care without hospitalization while 31 percent is credited to inpatient care or overnight stays in the hospital.
ETHICAL FORCES. Franklin D. Roosevelt issued the Economic Bill of Rights in his State of the Union Address in 1944 (Roosevelt, 1944); it mandated that "the right to adequate medical care and the opportunity to achieve and enjoy good health”, a sentiment that is echoed in the PPACA today. In essence, the ethical aspect of the law lies in correcting the social injustice of inadequate health care for specific classes of American society.
ECONOMIC ASPECTS. The economic results of the enactment of the PPACA depend on whether the reporting element is Democratic or Republican. The CBO issued an analysis stating distinct economic benefits in place from the enactment of the PPACA (Furman, 2014). These concluded with an approximate
However, a report by the ISIhr (2014) showed the CBO analysis did not mention the elimination of 2.5 million jobs due to the law’s effects. This is a result of workers not having to work as many hours for the same income as before, opting to drop to part-time employment since they are no longer dependent on fulltime employment for health insurance. Also, since employers are required to offer insurance to employees working over 30 hours a week, they will cut the hours of their workers to avoid having to pay for health insurance.
According to a news release from the U.S. Department of Health and Human Services, it is projected that in 2015 hospitals will save $5.7 billion in care costs that were previously uncompensated due to the PPACA (Hhs.gov, 2015). States that adopted Expanded Medicare are seeing approximately 74 percent of the national total savings in comparison to states that do not have Expanded Medicare. In addition, Nguyen (2012) estimates that each Medicare beneficiary from enactment through 2022 will save an average of $5000. This will occur in four ways: decreasing the growth of Part D premiums, lowering growth of Part A and b beneficiary copayments, closing the gap in prescription drug coverage (the “donut hole”), and providing preventive services at no cost.
POLITICAL INFLUENCES. Obamacare represents a massive Democratic influence on every American citizen. Consequently, the elected Republicans repealed the law 41 times in the House of Representatives (Minyanville, 2013). A 16-day government shutdown with huge financial consequences was an attempt to prevent funding the legislation for PPACA or at least stall its implementation. When the online website for the healthcare insurance marketplace experienced initial problems with implementation, former Obama Press Secretary Robert Gibbs called it “excruciatingly embarrassing” and Ezra Klein from The Washington Post (a vocal advocate for the PPACA) termed it a “disaster”. By January 2015, the website appears to running smoothly as a way for Americans to sign up for health insurance.
It’s difficult to argue that the PPACA has created a revolution in the United States concerning health care insurance coverage. After reeling a bit from the initial onslaught, insurance companies have adjusted to the change and while many people were upset and frightened when their previous carriers were no longer an option and they had to change with pre-existing conditions, the uproar seems to have settled down.
There have been some changes in the workforce as individuals opt for an early retirement or move to part-time employment since their insurance payments are assisted with subsidies in some instances. This opens the job market for the chronically unemployed comprising the unemployment statistics for the United States. Obamacare may be a significant cause of the dip in unemployment in the last quarter of 2014 to 6.3 percent (Noodls.com, 2015); people who had been looking for work for more than two years decreased by 25 percent, and those looking for less than a year decreased by 16 percent.
Plus, there’s just the good feeling you have from knowing you’re safe from hospital bills that could financially ruin you.
Conclusion The intricacy of the PPACA is based in part on how the government allocates funding and attributes results. The effects of the law are primarily based on a theoretical baseline from 2010 rather than what actually happened when the PPACA went into effect. For instance, when funding from Medicare expires is approximately 2016, the costs will be attached to the federal debt, increasing the deficit. It is important to realize that actual spending on the many facets of Obamacare and the resulting growth of additional debt is a consequence passing the Patient Protection and Affordable Care Act.
It is necessary to conduct further research and analysis to see of the positive result of the PPACA today will continue through the end of the fiscal year 2019. The law was signed into effect by a Democratic presidency which will end its term in 2015. The administration succeeding President Obama’s is expected to make changes in the PPACA secondary to negative public opinion regarding it. These changes will alter the predictions and possibly the economic trends currently in place. At that point, new analyses would dictate additional research on the effects of the changed PPACA or the replacement found for it.
But for this day in 2015, the question as to whether the Patient Protection and Affordable Care Act of 2010 supports health care for American citizens or whether it is a partnership between the government and health insurance companies is “yes” and “yes”. By creating a way for the government to work with health insurance carriers through the insurance marketplace, carriers are showing upward trends for sales. In the meantime, record numbers of people in the United States are obtaining health insurance and receiving not only medical treatment out of their financial reach previously, they are receiving the peace of mind of health insurance coverage.
Berwick, D. (2011). Impact of the Affordable Care Act on Seniors and Medicare. Hhs.gov.
Retrieved 12 February 2015, from
Foster, R. (2010). Estimated Financial Effects of the “Patient Protection and Affordable Care
Act,” as Amended. Centers for Medicare and Medicaid Services. Retrieved 12 February
2015, from http://Estimated Financial Effects of the “Patient Protection and Affordable
Care Act,” as Amended
Furman, J. (2014). Six Economic Benefits of the Affordable Care Act. The White House.
Retrieved 13 February 2015, from http://www.whitehouse.gov/blog/2014/02/06/six- economic-benefits-affordable-care-act
Hhs.gov. (2014). Enrollment in the Health Insurance Marketplace totals over 8 million people.
Retrieved 13 February 2015, from
Hhs.gov. (2014). New report projects a $5.7 billion drop in hospitals’ uncompensated care costs
because of the Affordable Care Act. Retrieved 14 February 2015, from
ISIhr. (2014). The Economic Impact of Obamacare - ISIhr. Retrieved 13 February 2015, from
Patrick, M. (2015). Why the Affordable Care Act hurts the managed care industry. Yahoo
Finance. Retrieved 14 February 2015, from http://finance.yahoo.com/news/why-
affordable-care-act-hurts 0603170.html;_ylt=A0LEVzdcj95U1 QUAGLdXNyoA;_y
Minyanville,. (2013). Who Holds the Most Influence Over the Fate of Obamacare? These 7
People. Retrieved 13 February 2015, from http://www.minyanville.com/business-news/politics-and-regulation/articles/The-Fate-of-Obamacare-Is-in/10/25/2013/id/52403
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Through 2022 Under the Affordable Care Act. Aspe.hhs.gov. Retrieved 14 February
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Roosevelt, F. (1944). Economic Bill of Rights. US Historical Documents. Retrieved 12 February
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