Health Insurance and Insurance Research Paper

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Affordable Care Act

What is the ACA?

The 2010 Affordable Care Act or the PPACA (Patient Protection and Affordable Care Act - HR3590), nicknamed Obamacare, is the latest American healthcare reform legislation. The PPACA encompasses the Patient Protection Act, the Affordable Health Care for America Act, and portions of the Student Aid and Fiscal Responsibility Act and Health Care and Education Reconciliation Act, connected with health care. Additionally, it encompasses revisions to the Food, Drug and Cosmetics Act, Health and Public Services Act, and other legislations. Further regulations and rules have served to expand upon the ACA since its enactment in March 2010 (Affordable Care Act Summary). Summaries of the act have been updated as and when changes were effected.

The 2010 ACA represents an extensive, elaborate law which is designed to transform the U.S. healthcare system, through the provision of quality healthcare coverage within the means of nearly all citizens of the nation, as well as through checking the growing national healthcare expenditure. Reforms under this act include new rights, safeguards, and benefits, rules to be adhered to by insurance firms, tax breaks and taxes, expenditure, fund allocated, committee creation, creation of employment, and education. One must bear in mind the fact that this legislation, under several circumstances, accords authority to ongoing endeavors by governmental initiatives such as the HHS (Health and Human Services) for reforming the nation's health care structure. Hence, health care reform does not begin and culminate in the ACA itself. Under this law, risks are spread uniformly to every insured entity for putting an end to health care discrimination and disparities (Affordable Care Act Summary). Earlier, it was possible for one to suffer discrimination when receiving health care services, on the basis of health status or sex. Further, health costs could vary disproportionately on grounds of age and other factors. Since the ACA's enactment, discrepancies in fees charged to patients have been restricted. For ensuring this, the Act required every American citizen who could pay for Minimum Essential Coverage (MEC) to do so beginning from 2014. A large share of individuals unable to afford this would be excused from this requirement. This would serve to direct the nation's economy and budget along a steadier path, by bringing about a deficit reduction of over a hundred billion dollars in the next decade, and over a trillion dollars in the next two decades, by controlling governmental profligacy and curbing waste, misuse and fraud. The ACA instituted a competitive novel healthcare coverage market (healthcare.gov) capable of providing group purchasing power access to several million American citizens, and enabling them to receive cost-related aid and compare different schemes.

All insurance exchange participants pay into ACA, with exchange pools' purchasing power improving affordability of private healthcare coverage schemes for individuals. These schemes will vie for organizations, thereby unintentionally regulating quality and costs. Small employers can purchase coverage on their own, and will be able to obtain tax credits amounting to about half the workforce's health insurance costs, thus rendering it more convenient for organizations to provide their workforce with benefits. The ACA ensures insurance firms remain honest to their clients by establishing well-defined rules which curtail the worst exploitations of the insurance sector (Affordable Care Act Summary). Additionally, it prohibits coverage refusal by insurance firms on grounds of an individual's preexistent health problems, whilst simultaneously according healthcare service consumers a novel power of appealing insurance firm decisions denying covered physician-prescribed treatments. Medical deductions are also curtailed. Several million households will enjoy the benefits of fresh tax credits that decrease premium costs, thereby enabling them to purchase insurance. Households with an overall income of not even 250,000 dollars will witness tax cuts amounting to several hundred billion dollars. The implemented health reform will be totally disbursed, and the deficit will decrease by over $100 billion over the next decade. Although it is not very easy to construe the legislation by itself, the majority of what an average American citizen perceives to be "Obamacare" is covered under the Act's first title, labeled "Quality Affordable Health Care for All Americans." This covers nearly all of the freshly offered benefits, protections, and rights; fresh regulations to be followed by insurance firms; mandates; insurance exchanges; tax credit rules, and so forth.

Opposition to the ACA

The central function of the ACA is, in fact, redistribution of wealth and reformation, targeted at the healthcare coverage sector. There are both clear losers and winners.

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Although an individual or group may be in support of improved healthcare services for populations direly in need of it, they may simultaneously hold a strong belief that the Act is not the right way to go about it. Besides arguments pertaining to the Act's ineffectiveness, the legislation has been actively damaging and disruptive to a large number of individuals who previously had access to healthcare, in a number of different ways, which include cost, accessibility, quality, freedom, and other elements (Murch). Obamacare is and, in fact, has mostly always remained unpopular with the masses. Therefore, it is not only a few, but a majority of American citizens, who speak of it in an unfavorable light. Such an extensive criticism of the Act is astonishing, not simply because of its duration and strength; an astounding 70% of existing enrollees are covered by Medicaid, a one-hundred-percent subsidized scheme. To put it more clearly, as many as 70% of the enrollees do not pay a dime for the healthcare services delivered to them, and quite a large share of the remainder (i.e., 30% enrollees) also receive subsidized care. In view of the above, it is surprising to see such strong opposition to the legislation.

There are numerous drivers responsible for the widespread negative attitudes towards the act. A majority of opponents voice a sort of combination of the concerns listed below (Murch):

• Increased out-of-pocket charges as compared to the previous coverage

• Annoyance with the repeated and intentional lies fed to them during the schemes' selling stages

• Concerns with regard to the long-run actuarial implosion of the Act

• Irritation with regard to the one-sided way in which the law was enacted

• Annoyance over the wasteful and inefficient manner of the law's roll-out

• Coercion into participating in the insurance market

• Coercion into paying for benefits one does not need or want

Total Costs

As a major portion of insurance coverage gains arises from the growth in Medicaid enrollment (which, together with the Children's Health Insurance Program (CHIP), currently covers as many as 70 million Americans, a steady growth from the 2010 figure of nearly 52 million), expenses of this state-federal joint endeavor will definitely grow, burdening the state as well as federal budgets. The Congressional Budget Office projects the federal Medicaid spending to be approximately 335 billion dollars for the fiscal year 2015. Expenditures are anticipated to witness a 75% increase in the succeeding decade, such that federal Medicaid spending will reach 588 billion dollars by the year 2025. Averagely, states cover about 43% of Medicaid costs (O'Neill and Ryan, 2015), adding up to about 181 billion dollars for the fiscal year 2012, prior to the implementation of Medicaid extension provisions of the Act, thus radically increasing enrollment. Although the total cost of expansion population coverage through the year 2016 is covered by federal funding, which will continue covering 90% of costs, the budgets of state governments are already stretched and will probably get overtaxed by this fresh expense. Moreover, even the non-expansion U.S. states will have to bear a cost of as much as 700 million dollars owing to "woodwork effect."

Following an assessment of healthcare insurance market reforms and the associated costs to citizens, the next step would be examining these reforms' costs to taxpayers. When the ACA was enacted in March of 2010, the Congressional Budget Office estimated a federal deficit decrease by 143 billion dollars from 2010 to 2019, by the legislation and associated reconciliation legislations (O'Neill and Ryan, 2015). Such an overall decrease would lead to 788 billion dollars in fresh spending towards the legislation's many health coverage provisions, reduced expenditure of up to 511 billion dollars in Medicare and other areas, and a growth in revenue by 420 billion dollars, from fresh taxes and service fees. The Congressional Budget Office predicted a drop in the number of non-covered individuals by 27 million, from 2010-19, with a 24 million exchange enrollment and mean exchange subsidy per individual reaching 6,000 dollars, for an overall 358 billion-dollar cost of coverage provision via exchanges, over one decade.

Impact on Small Business

The ACA has led to considerable changes for small employers, with more changes anticipated this year. Ever since its enactment, numerous revisions to the legislation have been witnessed, necessitating alertness and quick response by small enterprises, for continued compliance. For the next year, a larger percentage of.....

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