Health Law: Patient Protection and Affordable Care Act

The Affordable Care and the Patient Protection Act commonly known as the (PPACA-2010) is a federal statute signed into law in 2010. The design of the statute would be implemented in stages over eight years. The intentions of ACA were in reforming health care systems in United States of America (US). The law deals with laws on health insurance coverage. ACA has a clause that prohibits insurers denying coverage to people with pre-existing conditions. According to the law reviews, ACA will expand Medicaid eligibility while at the same time subsidize insurance premiums for American citizens. To increase on the people accessing insurance at work places, ACA will offer incentives to companies for them to offer health care benefits to their employees (Democrats’ senate gov/reform, 2010).

ACA expects small business or uninsured adults, through health insurance exchanges, created by states and federal government, to buy insurance premiums from a range of private insurances. Although large businesses are not required by law to offer insurance to their employees, they are nevertheless expected to pay penalties for employees who receive subsidized insurance on health.

The PPACA-2010 act requires states to create several agencies to manage implementation of the reforms. These agencies include National Prevention, Public Health and Health Promotion Council, a research institute on Patient Centered Outcomes. The research institute will be funding and conducting research on comparative effectiveness of the reforms. The other agency is the Medicare Independent Payment Advisory Board which will be making recommendations on Medicare spending, in cases where spending increases rapidly (Democrats’ senate gov/reform, 2010).

ACA extends insurance coverage for children up to the age of 26 years, even if they are not living with their parents and prohibits insurances companies from charging deductibles from preventive care. Equally, ACA prohibits insurance companies from dropping clients when they become ill. ACA will slow down the growth of Medicare costs and offer reimbursements to states in order for them to pay for the new expenditures proposed in the law.

The law will offers American a qualified health plan through Health Benefits Exchange. The benefits will include cost sharing and essential services. The law States that, out- of- pocket health benefits requirements should not exceed the health savings account. With the insurance coverage, actuarial values will define how much the insurer will pay and the coverage offered at four different levels: those receiving the Platinum coverage at 90%, Gold cover at 80%, and Silver cover at 70% while Bronze cover at 60% (Democrats’ senate gov/reform, 2010).

Estimates from the Congressional Budget Office (CBO) show persons who are not insured in America will drop considerably, by around 32 million people by 2019. This is after implementation of all the provisions of ACA. The number of people who will be left uninsured will be 23 millions on estimate. These are people who will opt out of health policies coverage as well as the illegal immigrants in the country. ACA will offer exemptions to people who will be paying more than 8% of their household incomes for health insurance. ACA expects to raise the rates of Medicare insurance for non-elderly people in America from 83% to 94 %( CBO & JCT’s, 2011).

ACA has strong consumer protections and provides Americans with new health insurance coverage options. It expects the Americans consumers of Medicare insurance to make informed choices. Although signed into law in 2010, many aspects of law have already been implemented, while the provisions of expanding Medicaid and introduction of health exchanges that are affordable launched in 2014.

Some of the disturbing aspects of the American health care systems that led to enactment of the PPACA-2010 are in the cost of health care in America. The cost of health care in America is prohibitive, accounting for more than 17% of the national GDP. Despite this cost or expenditure on health care systems, the health of American is no better than in those countries that spends less. The other issue with the American health care system is that, more people in America do not have health care insurance covers.

The cost and prohibitive nature of health care insurance, combined with the private sector insurance coverage complications, leaves many American uninsured. Thirdly, most people in America would like to make informed decisions about their health and the jobs they are now engaged in. Most Americans work jobs they would rather change simply to keep the insurance covers provided by their employers.

The PPACA-2010 addresses these issues by establishing affordable insurance exchanges expected to take effect in 2014. ACA provides that, where an employer does not offer insurance coverage for his employees, people will buy insurance coverage directly from state or federal managed market place exchanges. Market place exchanges will offer affordable and credible heath benefits plan. ACA however, to increase the number of insured persons, has provisions that limits insurers’ profits and eliminates lifetime and annual limits on insurance coverage.

To address the cost of Medicare in America, the ACA will strengthen Medicare by way of discounting and rebating prescriptions coverage gaps. On the other hand, ACA will expand cost-free preventive services and give oversight on increasing wastage, abuse and fraud in the Medicare system.

One glaring and unintended consequence of ACA is in the need for companies with more than 50 employees to offer health insurance covers to those employees working for 30 or more hours, failure to which, they will be paying heavy penalties. To navigate this provision, a company cuts the number of hours a single employee can work, change the number of shifts and cuts down the workforce. These ultimately will increase the cost of doing business and add up to unemployment in the country.

A review of the paper

A review of the Patient Protection and Affordable ACA paper indicates that ACA is one of the comprehensive health care systems reform in the US. According to ACA, review shows that it is going to transform the market on non-insurance in the country and mandate Americans to take health insurance. ACA will significantly expand the public insurance. ACA proposes various means of raising revenue to support health care services through a number of taxes. ACA will help in reorganizing health care expenditure and cut health care costs through a national health insurance plan.

Some of the key aspects of ACA are rights and protections of health care consumers by way of limiting insurer’s right of cancelling insurance coverage to some group of people. ACA will end the pre-existing conditions element in insurances covers and introduce affordable insurance exchange while expanding Medicaid. ACA will strengthen Medicare through prescription coverage gaps by discounts and rebates. ACA will expand cost-free preventive services and offer tax credits for non-profit, small business and reinsurance options for early retiree.

While establishment of affordable insurance exchanges will erode the employer-provided insurance, the erosion as indicated by the Congressional Budget Office (CBO) would be small. Persons covered by health insurance are in companies with more than 50 employees and these types of companies are not necessarily price sensitive when making decision of providing workers with insurance covers. The subsidies provided by ACA are not substantially big enough to offer workers with incentives to look for insurance outside the company plans.

Economically, the ACA provides offsets by the mandates, which will lead most companies in providing insurance to employees. The “free-rider” penalty, which charges companies with more than 50 employees between $2,000-$3000 if employees from these companies seek subsidies on health insurance is another reason companies will offer insurance coverage to their employees.

According to CBO public insurance expansion together with subsidies will cost federal government $940 billion by the end of 2019, covering more than 32 million people. This will have increased the numbers of persons in America receiving health care insurance covers. According to the CBO, there will be an increase in levels of revenues as spending cuts will exceed spending covering health care system. This will cut federal deficit by more than $100 billion in the first ten years. This argument, economically has some flows, although CBO indicates that increases in taxation and speeding cuts are back loaded and not front loaded (CBO &JCT’s ,2011).

The other argument by the paper is on how ACA will cut the cost of health care. According to the CMS, United States spending in health care sector accounts for 17% of the national GDP. CMS contend that, ACA will increase the expenditures. Similarly, Health care systems expenditure in America by 2016 will increase by 2% and 1% in 2019. But these increased expenditures are relatively small compared to the number of people expected covered within the same period (CMS, 2011).

Estimates from the Medicare and Medicaid service centre, shows 34 million more people covered by 2019 against a population of 254 persons insured. On the same line, the Medicare and Medicaid service center indicates that, without ACA reforms, between 2010 and 2019, the cost in the health care system would grow at 6.6% per year. This shows that ACA will increase the number of people insured by 13% at a cost less than national health care expenditure growth (CMS, 2011).

The position taken by the paper clearly indicates that it actually stands the theoretical and economic analysis and stands up to the empirical findings as shown from the reports provided by the CMS and the CBO. As for changes that need made after completion of the course, they would probably be in researching on how the ACA reforms would end up reducing the federal deficit.

References

CBO and JCT’s (2011). Estimates of the Effects of the ACA on the Number of People Obtaining Employment-Based Health Insurance. Web.

CMS (2011). Administrative Simplification Provisions in the Patient Protection and Affordable Care Act of 2010. Web.

Democrats’ senate gov/reform (2010). The patient protection and affordable care Act; detailed summary. Web.