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History and Impact of Affordable Care Act

by Daniyal
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Introduction

Public policy is a crucial topic that deals specifically with safeguarding public values and ensuring that the government fulfills its essential and universal obligations. Almost every aspect of life including education, energy, economy, environment, jobs is affected by the policy making decisions made at all government level. It is therefore important that a public policy and law should be focused upon achieving its intended objectives.

One of the main efforts to improve health insurance in the United States of America was the Consumer Safety and Affordable Care Act. Obamacare, commonly recognized as the Universal Care Act, is one of the country’s most notable health-care measures. It was developed with the goal of decreasing the number of uninsured Americans and, as a result, increasing the overall amount of insurance coverage available to the majority of Americans. Apart from increasing total policy affordability, the priority was on lowering overall costs for Americans in order to render high-quality health insurance sustainable and open to the majority of the world. It recommends a series of mechanisms, such as tax credits, loans, and mandates, to minimize the overall cost of healthcare for ordinary Americans while also growing the quality of programs offered to them. the year 2012 (Cronin & Aponte)

This paper would objectively examine President Obama’s public policy program, evaluating its logic, effect on culture as a whole, whether it has been applied in its true sense, and how the public will profit from this legislation over time.

History and Impact of Affordable Care Act

History of the Act

The Affordable Care Act (ACA) is a new law that aims to improve overall health-care coverage in the United States. On March 23, 2010, President Barack Obama signed it into law. When coupled with the Health Care and Education Reconciliation Act, this act is recognized as the most substantial overhaul of the US health-care system since the 1960s, when Medic Help was implemented. The year 2011 (McDonough)

It’s worth remembering that during the 2008 presidential race, health-care reform was one of the most intensely discussed themes. Hillary Clinton and Barack Obama have announced plans to expand health benefits and programs to more than 45 million individuals in the United States. (2008, The New York Times). Following his inauguration, Barrack Obama presented his health-care overhaul plan and expressed his commitment to cooperate with Congress to get it passed. Before the bill was approved by the house and senate, it was exposed to extensive discussion in Senate panels such as the Energy and Commerce Committee and the Finance Committee.

The various versions of the bill as proposed by both the Senate as well as the House bore similarities with earlier proposals made specifically during 1990s. As such this act is also considered as the manifestation of the earlier efforts by both the Houses to actually make systematic reforms in health care industry. What is important to note however is the fact that Senate failed to take up the bill proposed by the House. Instead, Senate went to propose a completely new bill regarding health care reforms and passed its own version rather debating and taking up the health care reforms bill proposed by the House. It is also critical to note that proposal of Obama for comprehensive health care reforms were largely drawn from Senate Bill.

It is critical to note that this law will be enacted phase wise with last provisions of the law are to be implemented by Jan 2020. The overall funding for the proposed provisions are taxed according to the overall income level of the individuals. The cut off for the Medicare tax has been set on income levels over $200,000. As such the government has ensured that the funding comes through proper taxation. (Feldman, 2011)

Market based insurance products and services actually failed to deliver the required results under which the original healthcare reforms were initiated. Over the period of time, insurance firms made the affordable and quality health care coverage by further toughening their criteria for offering insurance coverage. Government potentially stepped in to provide more secure future and comprehensive health insurance coverage at all levels. (RICHMOND & Fein, 2009)

The overall rationale for the new law was to support those above the 133% of the Federal Poverty Level i.e. the current level is $30,000 for a family of 4 persons to receive federal funding support in order to pay for higher level of insurance coverage. Over the period of time, lack of policy initiatives has actually resulted into many Americans not being able to enjoy the quality healthcare.  (Schmidt, 2011)

Implementation

One of the key reasons for the implementation of this new law was based upon the fact that both the private sector as well as government failed to provide adequate insurance coverage to all the Americans. The new law therefore can be considered as the result of the failure of both the government as well as the market to offer affordable healthcare to all. Market clearly failed to design and develop health insurance products which can cater to the needs of all consumers whereas government failed to provide adequate social security support to improve the purchasing power of consumers so that they can afford quality healthcare.

It is important to understand that the new law will be implemented provision by provision and there is a long list of provisions which need to be implemented over the period of time. Effective from beginning of 2010, this law has been made effective and is being implemented through a phased approach. Certain provisions were implemented and affected at the time of enactment whereas some provisions are yet to be enacted or implemented upon. Under the law, Food and Drug Administration has been authorized to approve the generic versions of the biologic drugs. Medicaid drug rebate has also been increased suggesting that the government has taken measures to influence the manufacturers of drugs also to contribute towards the healthcare reforms. (Lawrence R. Jacobs & Skocpol, 2012)

Apart from this, adults with existing health conditions have been placed under high risk pool which will be subsequently transferred to the health care exchange in 2014. The last implementation of the law took place in Jan 2013, when the incomes of individuals in excess of $200,000 have been subjected to an additional tax of 0.9%. The next phase of implementing different provisions of law will be in August 2013 and further implementation will take place by the end of 2020. (Miller, 2011)

Impact on Society

One of the major advantages of this policy is the increased visibility provided to Americans. Furthermore, recent provisions also rendered it illegal for insurance providers to fail to insure anybody, thus expanding the total insurance distribution net. This therefore clearly indicates that the law has been effective in addressing the concerns of the core group of stakeholders i.e. the ordinary citizens of the country.

From the perspective of the society, this law seems to have been focused upon securing the interests of the ordinary individuals. Though on one hand, the law has taxed the high income individuals to pay for the increased expenditure on healthcare however, it has also benefited greater number of Americans to get comprehensive health insurance coverage.

The provision of individual mandate under which every American is required to have the insurance coverage or face the fine has attracted lot of attention. Under this provision, it has been insured that each individual in the society is comprehensively covered. This has been considered as necessary in order to reduce the overall chances of unforeseen illness which can put significant strain on the financial resources of the individuals. (Eibner & Price, 2012)

In order to evaluate the efficacy of any law or policy, it is important to note that the law must serve the interests of the core group of the stakeholders besides addressing the issues and concerns of other stakeholders. This law since was aimed at addressing the issues and concerns of poor Americans who could not afford the expensive insurance coverage, however, seem to have negative impact on the insurance industry. The setup of the insurance exchanges as well as other institutional reforms may not result into overall effective returns for the insurance companies.

In order to make the law more effective for all the stakeholders, it is therefore important that law should consider the interests of other stakeholders also. Since the overall health delivery services will be offered by the hospitals and health care services associated with the insurance industry, it is therefore critically important that the law should address the concerns of the entire stakeholder also.

It is also important to evaluate the social cost and benefit of the law also as it outlines as to whether the proposed policy changes actually resulted into the desired changes. It has also been argued that the increased taxes will have an impact on the supply of labor in the economy as it will make disadvantageous for the individuals to work more. Since this law propose to implement an additional tax, it is therefore important to labor may adversely react to the changes.  (Gonshorowski, 2013)

Policy Analysis

One of the immediate benefits of this policy would be an increase in the number of Americans getting insurance coverage. The systematic way through which the bill has proposed the changes will result into reduction of uninsured Americans by 30 million. By the end of 2020 when the bill will be completely implemented, only 25 million Americans will remain uninsured thus suggesting that the bill may be successful bringing in more Americans under the coverage. Such large numbers of persons getting affordable and quality health care coverage therefore suggests that the policy may be able to work on.

It is also critical to note that with the implementation of this law, the overall insurance premiums are going to increase. This may result into significant increase in the costs for the individuals besides decreasing the deficit for the Federal government. The additional tax imposed will help government to collect more revenue to support the overall health reforms introduced through this law.

In order to further improve the coverage provided under the law, it may be relatively possible that more amendments may be introduced in the law. More specifically, caps on federal government spending on the health care through this program should be defined more clearly in order to ensure that other segments of the society also receive desired level of funding. Diverting more funds to the health may reduce spending on other vital sectors of the economy.

Bibliography
  • Cronin, O., & Aponte, P. (2012). The Patient Protection and Affordable Care Act: Select Elements and Entities. New York: Nova Science Pub Incorporated.
  • Eibner, C., & Price, C. (2012). The Effect of the Affordable Care Act on Enrollment and Premiums, With and Without the Individual Mandate. Retrieved from Rand Corporation: http://www.rand.org/content/dam/rand/pubs/technical_reports/2012/RAND_TR1221.pdf
  • Feldman, A. M. (2011). Understanding Health Care Reform: Bridging the Gap Between Myth and Reality. New York: CRC Press.
  • Gonshorowski, D. (2013, March 11). The Affordable Care Act Negatively Impacts the Supply of Labor. Retrieved from The Heritage Foundation: http://www.heritage.org/research/reports/2013/03/impact-of-the-patient-protection-and-affordable-care-act-on-labor-supply
  • Lawrence R. Jacobs, & Skocpol, T. (2012). Health Care Reform and American Politics: What Everyone Needs to Know. New York: Oxford University Press.
  • McDonough, J. E. (2011). Inside National Health Reform. California: University of California Press.
  • Miller, D. A. (2011). The Uninsured. New York: Greenhaven Press.
  • RICHMOND, J. B., & Fein, R. (2009). The Health Care Mess: How We Got Into It and What It Will Take To Get Out. Boston: Harvard University Press.
  • Schmidt, P. L. (2011). Medicare and the Patient Protection and Affordable Care Act. New York: Nova Science Pub Incorporated.
  • The New York Times. (2008, September 26). The First Presidential Debate. Retrieved from The New York Times: http://elections.nytimes.com/2008/president/debates/transcripts/first-presidential-debate.html

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