Affordable Care Act and Healthcare Reforms

Affordable Care Act and Healthcare Reforms

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Affordable Care Act and Healthcare Reforms

            In years preceding the affordable care act, the media focused its attention of the rising healthcare costs in the country. Though, at the time, the healthcare costs were rising at a relatively lower rate than the first half of the century, the attention on this critical aspect of society was overdue. The healthcare industry and its mutual healthcare insurers in the United States were too commercialized making fundamental rights to health and wellness beyond the reach of the average citizens. Naturally, the healthcare industry had grown influential they have aggressively lobbied against healthcare reforms that mitigated their profits before and after the implementation of the Obamacare. The above health reform legislation was, in essence, the confluence of the culmination of pressure for healthcare reforms, the spirit for change and timing. The motivation to actualize campaign promises by the Obama administration was a key driving factor. The pharmaceutical industry was another beneficiary to the lucrative healthcare that had to involve in the consultation. The high profits of healthcare insurers when the economy was barely recovering from the 2008 financial crisis made the public awake to the extortionist tendencies perpetuated by these industry players. The general sentiment mitigated the effectiveness of the lobby groups giving politicians impetus to legislate reforms that they had hitherto to been manipulated to ignore. Given the high ground that the government held, the health insurance companies, pharmaceuticals, and medical practitioners had to make major compromises to accommodate the health reforms. The affordable care acts increased regulation of health insurers, and at the same time augmented the direct responsibility of citizens to their healthcare towards alleviating the burgeoning medical expenditure.

            The healthcare proponents highlighted that the government was also partly to blame for the high medical expenditure. Critics of the Affordable Care Act have argued that a disproportionate portion of blame for the high medical expenditure was attributed to the health care insurance industry (Buchmueller, Carey, & Levy, 2013). The 21st century was punctuated with advances in medicine and technology. The above was a costly venture as the pharmaceuticals had to attach high prices to their products to offset research and development costs. The price would gradually drop upon expiry of patents. Secondly, the average American was insulated from the costly reality of health care given their medical needs were covered by third parties, their employers, and government hence the consumption of medical services was exacerbated. If the patients were directly involved in their healthcare, the consumption for affordable quality care in the market would have lowered the prices (Longest, 2015). The politicians had previously passed insurance mandates requiring one-size fits all plans that increased their costs. Included in a single cover was marriage therapy, varicose vein removal and among other special target covers, aspects that an individual requiring coverage for the bare minimum medical services would be charged regardless his age or needs. The legislation further unduly burdened employers with mandated to cover employees regardless their preexisting conditions.

            Usually, insurance companies would charge higher for cases they perceived to be liabilities with an option of stopping the cover of the sick person when the condition worsened. It follows that the employers were left to withstand the worst of the costs (Day, Himmelstein, Broder, & Woolhandler, 2015). Addressing these issues, Affordable Care Act prevents insurers from halting the cover of a patient because of preexisting conditions, but the unique medical costs are to be covered by the patient when able. The employer offers their standard coverage for the average employer. Similarly, the legislative directives recommended community tariffs where the healthcare insurers had a singular price for members of a given demographic the high-risk patients notwithstanding. The above requirement exposed healthcare insurers to losses in light of the exposure to an apparent liability. States restricted buying covers to across state boundaries. As such, access to a cheaper cover in a neighboring state was prevented limiting market forces from working freely. Doctors and their hospitals felt that the Medicaid and Medicare were shortchanging them given their extremely low reimbursement rates thus made up by overcharging the privately insured patients. These government controls in pricing caused the doctors to create an artificial shortage to preserve the value of their offerings. The Affordable Care Act led to consultations between the insurers, medical practitioners and the government towards reaching equilibrium. This dialogue meant reducing unnecessarily stringent laws that led overregulation of the health care industry and eliminating the litany of intermediaries that punctuate the industry. Government inefficiencies had to be acknowledged rather than taking a high-handed stance and absolving itself of any blame. The premise of Obamacare is elevating self-interest to mutual interest. In the same light, the healthcare insurance industry had hidden behind the above arguments to hike prices as evidenced by their 2009 profits.

            The administrative costs of Medicare and Medicaid had to be reduced in order to shift the savings to expand the latter’s scope and the quality of the former. Fraud by both medical practitioners and patients had to be curtailed. The patient would directly be given a taste of the healthcare burden thus by 2014 every individual had to be covered or levied a tax to facilitates coverage of others. Private ownership of insurance covers would awake the patients to the reality of burgeoning medical expenditure inclining them to pursue a medical cover that suited their needs rather than settling for the employer offered one. Those earning less or four times the federal poverty rate would give tax cuts to in their purchase of insurance premiums, but they would cover a given portion of their insurance at least 15% (Sommers et al., 2013). The government enacted a lower limit of $750,000 annually on a premium cover. Small and medium businesses were equally given an avenue to cover their employees competitively. A provision for the business to access medical cover at a cheaper rate was availed.

            The medical reforms encapsulated in the affordable care act was not targeted at population segment with increasing disposable income but those with at had been left uninsured. These insured were those that were ineligible for the Medicaid but could not afford health care insurance cover as in its then state. As the dependency on third parties to bear the larger responsibility of citizen’s healthcare bills, the free market forces cannot effectively regulate the healthcare industry. The affordable care act was legislated in response to the increase in the medical expenditure. Cusp of change following the 2008 financial crisis provided an opportune moment for the Obama administration to materialize their campaign promises. The insulation from the real life repercussions of medical care causes the citizens of replicate their consumerism tendencies in healthcare. Other factors such as the cost of research and development contributed to the high medical expenditure.

References

Buchmueller, T., Carey, C., & Levy, H. G. (2013). Will employers drop health insurance coverage because of the Affordable Care Act?. Health Affairs, 32(9), 1522-1530.

Day, B., Himmelstein, D. U., Broder, M., & Woolhandler, S. (2015). The Affordable Care Act and medical loss ratios: No impact in first three years. International Journal of Health Services, 45(1), 127-131.

Longest, B. B. (2015). Health policymaking in the United States (6th ed.). Chicago, IL: Health Administration Press.

Sommers, B. D., Buchmueller, T., Decker, S. L., Carey, C., & Kronick, R. (2013). The Affordable Care Act has led to significant gains in health insurance and access to care for young adults. Health affairs, 32(1), 165-174.

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