The Patient Protection and Affordable Care Act
Healthcare policies play an instrumental role of informing the public about government intentions and initiatives in the health sector. The directives of these legal instruments guide decision making, legal action, and oversee important operations in healthcare. The propositions of the Patient Protection and Affordable Care Act detail the transformations that the government wishes to implement in the sector. After underscoring the rationale for the changes, this paper explicitly explores its provisions. Then, it proceeds to provide an in depth critical analysis of the provisions. As it will come out from the study, the policy has various shortcomings that can compromise its fundamental goal of reducing costs and improving accessibility and affordability. The government should prepare itself to deal with these limitations in order to ensure effectiveness.
Key Words: Policy, healthcare, Patient Protection and Affordable Care Act, critical analysis
Good health is an important aspect that enables individuals to perform well at all times. Governments are responsible for ensuring that populations access quality and affordable health services. They recognize that sound health contributes positively to the economic wellbeing of their nations. The provisions of an excellent health policy govern decisions and oversee operations within this sector. A comprehensive health policy ensures that all facets of the population access quality healthcare services. America’s Patient Protection and Affordable Care Act (PPACA) provides insightful provisions that aim at reforming healthcare. It recognized that the healthcare costs were rising at a higher rate than the nation’s income. Statistical evidence shows that in 2007, they constituted a significant 17.4 percent of the gross domestic product (Reid, 2010). Yet irrespective of this increased spending, the health of the populations did not improve.
The PPACA seeks to address the problem of increasing government expenditure on alternate health programs like Medicare and Medicaid. Due to the fact that the elderly population is likely to increase exponentially in future, these programs are not financially sustainable. Coupled with related challenges like fraud and waste, Pipes (2010) believes that these medical programs are counterproductive. Notably, there is a glaring challenge between health insurance and employment. The conditional nature of the relationship discourages employees from exploring other job opportunities. In addition, it makes it difficult for individuals who lose employment to retain and benefit fully from health insurance coverage.
Proponents of this policy instrument also realize that a significant percentage of the American population does not afford healthcare and lacks essential insurance. Notably, the number of individuals that do not have insurance increased to a worrying level. This implies that they have the responsibility of paying for their medical services from their pockets. Research evidence points out that in most instances; the uninsured individuals lack access to critical health care (Barr, 2011). Besides failing to access essential preventive care, they seldom get quality treatment for injuries and illnesses. The undesirable state of affairs is inconsistent with the provisions of the universal health policy that America holds in high regard. Undoubtedly, the preceding concerns have far-reaching implications on the health and general wellbeing of the American population. The PPACA seeks to address these issues and thus safeguard the health of this nation. However, there are challenges that compromise its effectiveness. It is against this background that the paper provides a critical review of this policy.
Provisions of the Policy
Generally, this policy aims at enhancing the accessibility as well as affordability of medical services. Its objective is to ensure that all persons from the high, middle, and low-income groups access quality health services at all times, irrespective of their employment status. To meet this goal, it begins by according individuals a personal mandate to attain health coverage (Davidson, 2013). This requires legal American residents to acquire health insurance and pay for the same or risk facing penalties. In order to ensure that populations comply fully with this provision, the policy provides guidelines and options with regard to accessibility to coverage. Relative efforts aim at ensuring that by the time the policy comes in effect; all persons have full medical coverage.
With respect to private health insurance coverage, the policy provides certain requirements that planners and insurers need to adhere to. In addition to preventing employees from losing coverage in certain instances, the changes ensure affordable coverage for all facets of the population. These modifications are wide and varied and include guaranteeing availability of coverage to employees, removal of pre existing exclusions, conditions, and refusals on the basis of an individual’s health status, expansion of depended coverage to include children up to the age of twenty six years, removal of unreasonable yearly limits, coverage of various other preventive health services like immunizations without requiring cost sharing, and provision of health insurance premiums (Long, Stockley, & Nordahl, 2012).
By establishing the American Health Benefit Exchanges, this legal instrument directly improves coverage. This provision allows small businesses and populations who lack access to employer coverage to acquire coverage. In addition to availing coverage to citizens, the exchange simplifies the very process of obtaining the coverage. According to Rashford (2007), the purpose of the exchanges will be to undertake premium reviews in a bid to establish their viability, accredit health plans, ease client access to important information, and undertake outreach functions. Further, the policy provides subsidies to individuals from the low-income category in order to ensure that they obtain coverage accordingly.
This Federal Law also expands the Medicaid program to include individuals who were not beneficiaries previously. Before the effect of this policy, Medicaid beneficiaries needed to be individuals from the low-income class or from other specific categories such as the disabled and pregnant. Currently, this policy requires coverage for individuals that are less than sixty-five years and expands to include childless adults. Furthermore, it accords states the alternative of establishing basic health plans (Rashford, 2007; Staff of Washington Post, 2010). Arguably, this will benefit immigrants whose incomes disqualify them for the Medicaid program. Besides the preceding policy provisions, the government provides various other incentives in an effort to improve healthcare. These benefit researchers, health providers, and states amongst others.
The intention of the government’s implementation of this law is to ensure that its population has access to affordable medical services. While some of the consequences may be beneficial to certain populations, others will probably disadvantage different facets in significant ways. Bodenheimer and Grumbach (2012) cite that one of the problems that the sector struggles with pertains to underuse of medical resources. Notably, effective treatments that are likely to improve patient outcomes are seldom used because physicians and other medical professionals lack adequate relevant information. The PPACA advocates for use of sophisticated information systems by all healthcare professionals during the execution of duties. Undoubtedly, this will have a positive impact on the quality of healthcare because it encourages increased use of effective treatment. However, it is worth noting that use of this system may not motivate providers to improve performance. In such a case, McCaughey (2012) recommends that employment of other types of incentives will enhance the quality of health care. Besides using subsidies, the government can directly offer other forms of financial incentives to these personnel.
Ideally, provisions of this instrument increase the percentage of the population that benefits from health insurance exchanges facility; a measure that has positive impacts on quality competition conception. The US government and The Department of Health and Human Services (2010) assert that quality competition increases accessibility and affordability without compromising effectiveness. In order to reap optimal rewards, it is important for the exchanges to provide consumers with sufficient vital information regarding health insurance to ensure that they make informed choices. Because the policy offers insurance administrators a host of subsidies, it is likely that they will devote a significant percentage of their time to managing the respective subsidies and enforcing related mandates. The administrative tasks that are associated with estimating tax credits are complex and demanding. For this reason, they are most likely to raise costs and limit the amount of time that the administrators commit to providing invaluable information to the consumer base. This is unsustainable in the sense that it prevents clients from making informed decisions and choices.
In his review, Tate (2012) indicates that the effects of the policy on health costs will be varied. By requiring health insurance companies to extend coverage to all individuals and refrain from increasing charges for persons with poor health, the policy raises the costs of providing quality medical services. Companies will most likely grapple incidences of adverse selection that stem from individuals of poor health paying less for what their health problems actually cost. Further, the policy requires insurance companies to set premiums that cover the health costs of an average person. Healthier individuals are unlikely to purchase the premiums because of the fact that they may not make medical visits, and thus are unlikely to incur related costs. Persons with poor health may consider the premiums a bargain and resort to purchasing insurance. This state may lead to an increase in the cost of premiums as well as insurance.
This policy increases the percentage of the population that benefits from insurance from private companies as well as the government. This will increase the cost of healthcare especially considering that very few individuals put in consideration the cost of their medical services. The fact that third parties pay for these costs discourages them from assuming any form of responsibility. As such, they do not undertake important research regarding the implications of their choices. The findings of the research undertaken by The Staff of the Washington Post (2010) ascertain that individuals who pay for their medical expenses spend less than those who do not assume financial responsibility for the medical costs.
The policy makes it difficult for insurance companies to participate actively in controlling medical costs. In his report, Reid (2010) reveals that insurance companies focus on developing ways through which they can limit consumption of healthcare especially by the insured. Some of the notable ways through which they attain this includes providing incentives and increasing out-of-pockets costs. Currently, the PPACA requires insurance plans to cover up to sixty percent of the healthcare and medical costs (Reid, 2010). Although the provision benefits consumers, it undermines the ability of the insurance companies to control costs and function profitably. In addition, it encourages wasteful spending within the sector and ultimately increases the cumulative costs.
According to the directives of the policy, insurance companies assume the responsibility of paying for the entire cost of preventive care. Medical literature indicates that various preventive measures are not cost effective (Davidson, 2013). Undoubtedly, they ensure that the health of the affected population improves. However, the health improvements do not have a direct positive impact on cost reduction and enhancement of economic productivity. Further, the government’s decisions with regard to the preventive care to incorporate in the costs are greatly influenced by politics. This makes it difficult for the relevant stakeholders to make credible choices with respect to the most beneficial preventive measures. Seemingly, health care providers pressurize the government to focus more on saving financial resources than on providing quality and sustainable packages. At this point, it is worth noting that cost effectiveness is a function of various factors including the health history, age of the clients, and patient characteristics (Kocher, Emanuel & DeParle, 2010). Including these in critical decision-making can make the insurance policies to determine the percentage of the cost that the patients should assume. Since insurance companies have this information, they are in a better position to make informed decisions than the government.
By requiring all individuals to purchase insurance, the policy aims at addressing the problem of adverse selection (McCaughey, 2012). However, it is unlikely to address the issue because the related penalties are very low and thus, individuals will prefer to pay the penalties as opposed to purchase the premiums. Currently, for an individual to purchase health insurance premiums, s/he requires an average of $4000 dollars. According to McCaughey (2012), this is lower than the $695 penalty that an uninsured individual requires to pay. Particularly, healthy individuals will prefer to face the penalty than pay for the insurance that may not benefit them in any way. Davidson (2013) agrees that indeed, there are facets of the population that will remain uninsured regardless of implementation of this policy. The immigrants and persons that do not qualify for Medicaid will thus find it difficult to access quality healthcare. The fact that the provisions prevent them from purchasing insurance exchanges implies that their medical coverage is at stake. In this respect, the government faces the challenge of determining ways through which these individuals will access healthcare and remain productive members of the society.
One of the objectives of this policy is to ensure that all individuals access healthcare. By providing subsidies in this sector, the policy seeks to make sure that the low-income groups access health care services at all times. Although it will ensure increased access, it may limit the ability of certain groups within the population to attain important medical services. From an economic point of view, Goodson (2010) indicates that this is a consequence of scarcity that requires rationing in order to ensure availability of services. Ideally, providing affordable healthcare increases the demand for healthcare professionals such as nurses, pharmacists, and physicians. This will increase provider charges in the short run and compel the government to enforce rules for rationing and price controls. Coupled with existing shortages, The US Government and The Department of Health and Human Services (2010) assert that increased access is likely to worsen the scenario. Put differently, it will raise the medical costs by increasing expenses.
Another vital goal of the policy is to reduce Medicaid as well as Medicare fraud. In this respect, Altman and Shactman (2011) point out that fraud occurs naturally in systems where a significant percentage of payments are made by third parties. Stringent regulations and tight rules regarding insurance and government reimbursements exacerbate the problem and promote fraud. For instance, such scenarios force physicians to make inaccurate diagnosis in order to receive specific reimbursements. The fact that healthcare professionals often deceive the government and insurance companies is indisputable. Patients encourage this practice because they equally benefit from the deception. A study undertaken by Weissert and Weissert (2012) established that an estimated forty percent of physicians exaggerate the severity of patient symptoms, report symptoms and signs that patients do not have, alter the patients’ diagnoses, tamper with billing procedures, and engage in other deceptive acts on the premise of helping patients to secure medical coverage.
Currently, the provisions of this policy intend to reduce and or curb the practice. Specific guidelines related to required compliance to certain programs by providers and stringent entry requirements for individuals that might bill the government for medical services will enable the later to meet its goal in this respect. However, increasing the percentage of the medical costs that the government needs to pay might generate opportunities for fraud (Long et al, 2012). Notably, incidences of fraud within the sector emanate from patient’s mentality that they spend other people’s financial resources and not their own. For this reason, they tend to be extravagant and pay minimal attention to accountability. The carefree attitude encourages pursuit of the abovementioned vices by both the health professionals and the patients. Ultimately, it increases the costs of healthcare and compromises effective implementation of the proposed reforms.
Expansion of healthcare entitlements by this policy has direct negative effects on the economic wellbeing of low-income populations. According to Altman and Shactman (2011), the reforms discourage employment and compromise economic growth. In this regard, uncertainties surrounding its mandates and tax increases discourage companies and firms from employing more staffs and expanding operations. Certain provisions like tax incentives for small companies and subsidies to households encourage hiring and employment. However, higher taxes and the costs that the government will incur during implementation discourage private capital investment. Since the provisions favor employees, some of them may assume counterproductive tendencies such as dropping out employment or working for few hours. Resultantly, companies and firms might resort to limiting hiring.
Governments formulate, implement and enforce health policies that govern healthcare and oversee operations in related fields. America’s Patient Protection and Affordable Care Act details various reforms and transformations that the nation seeks to enforce in its health sector. The underlying goal of this policy is to ensure universal access to medical services and ensure that all nationals access affordable healthcare. Increasing health care costs, depreciating health conditions of populations, and an increasing percentage of uninsured population inform decision making in this regard. The objective of the policy is to ensure that all populations from varied economic backgrounds access healthcare services at all times. Besides directing individuals to assume responsibility for insurance, the policy provides incentives for healthcare providers, researchers and states, expands Medicaid, addresses incidences of fraud, transforms the private insurance coverage, and establishes health benefit exchanges. However, effective implementation and enforcement of its provisions faces various challenges. As identified in the preceding evaluation, the government needs to develop alternative options to address the current loopholes that undermine effective implementation. Only then will it be able to achieve its goal with regard to reducing medical costs and enhancing affordability and accessibility.
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