The Patient Protection and Affordable Care Act (PPACA) signed into law by president Obama on March 23, 2010 is arguably the most extensive reform of health care law ever to be enacted in the U. S. It will impact the way professionals practice health care, the way insurance companies handle health care as a product, and the way consumers purchase and use health care as a service. The Affordable Health Care Act is primarily aimed at reducing the number of uninsured Americans and reducing the overall costs of health care from an administrative and consumer standpoint.
The PPACA requires insurance companies to cover all applicants and offer the same rates to all applicants of the same age regardless of pre-existing conditions, gender or any other intrinsic factors that may deem an individual a particularly “risky” investment for an insurance company. According to the U. S. Census Bureau, in 2009, there were 50. 7 million Americans living without health insurance; that amounts to 16. 7% of the population (DeNavas-Walt et al. ).
In order to increase the rate of coverage, the PPACA provides mandates, subsidies, and tax credits to employers and individuals. Since individuals will not be discriminated against on the basis of their health, insurance companies will have larger pools of individuals to cover and the price of insurance will decrease based on the idea that the collective or average risk of any given group of individuals will, theoretically speaking, be less risky than the highest-risk individuals in that group.
Because consumers will not be judged on their individual health, the insurance companies, instead, will have to compete for consumer attention and theoretically speaking, market prices of insurance will fall further due to the increased competition between companies (HealthCare. gov). In addition, there will be a mandate in place which will require all individuals not covered by their employer, Medicare, or Medicaid to purchase an approved private insurance policy or pay a fine. Again, mandating that people have insurance will lower costs for everybody.
Americans who are already insured and like what their insurance plans will not be forced to change anything. This will allow even the highest-risk individuals to enjoy quality healthcare at an affordable price and all Americans “will have the security of knowing that they don’t have to worry about losing coverage if they’re laid off or change jobs” (HealthCare. gov). Minimum standards for health policies will be set meaning that everyone will at least get basic essential care and both lifetime and annual coverage caps will be banned meaning that an individual will never be denied access to healthcare.
The Patient Protection and Affordable Care Act will reduce what families have to pay by capping out-of-pocket expenses and requiring preventive care to be fully covered without any out-of-pocket costs (HealthCare. gov). Families making between 100% and 400% of the federal poverty level will receive federal subsidies if they choose to purchase insurance that is on the market (Kaiser Family Foundation). Premiums will be subsidized so that families making between 133% and 150% of the poverty level will spend 3-4% of their income on premiums. The percentage of income taken by premiums will increase with increasing income.
For example, people making 300-400% of the poverty level will spend 9. 5% of their income on premiums which are higher than the percentage allotted for those making 133-150% of the federal poverty level. Very small businesses will also be able to receive government subsidies if they purchase insurance in the new insurance market. Medicaid eligibility will include all individuals and families with incomes up to 133% of the poverty level. This expansion of Medicaid will not take effect in all states so some people may be left in a circumstance where they do not qualify for Medicaid but cannot afford another plan.
Additionally, in the states rejecting the expansion, subsidies will not be available to those below 100% of the poverty line (Hislop III). This too could lead to a coverage gap in those states. The Act has not been fully instituted yet; it is set to be fully effective by the year 2020, but the provisions that are in effect now have benefited millions of Americans. For example, a little more than three million young adults in America who were uninsured have gained coverage by being able to stay on their parent’s health plan (HealthCare. ov) and 86,000 Americans with pre-existing conditions are receiving affordable insurance through a temporary plan called the Pre-Existing Condition Insurance Plan (HealthCare. gov). Insurance companies will be made to act more responsibly under the PPACA. They are already being made to spend their money more wisely. For example, the the health insurance companies of 76 million Americans are now required to spend 80% of premiums paid by the insured on improvements to health care.
If they do not use 80% of the money paid to them by their customers for that purpose, they will be required to provide rebates to their customers (HealthCare. gov). Nearly 1. 1 billion dollars in rebates have been provided to nearly 13 million customers. If insurance companies should feel the need to raise rates by 10% or more, they must publicly justify why they are raising their rates and the law gives states resources to review and block premium increases of this magnitude (HealthCare. gov). The primary goal of the new healthcare policy is to insure all Americans.
Prior to the Patient Protection and Affordable Care Act, it was becoming clearer and clearer that the amount of medical care that an individual receives in the United States was related to whether the individual had health insurance (Hadley et al. ). Studies show that the uninsured have fewer physician visits per year, they are less likely to have a hospital stay, and, if they are hospitalized, they have a shorter length of stay than insured individuals (Hadley et al. ). The uninsured’s limited access to healthcare suggests that they are less healthy than their insured counterparts.
In considering this, let us refer to a study comparing the two populations, the insured and the uninsured in hospitals. In 1991, Jack Hadley and a group of other researchers conducted a study to identify whether or not there were statistically significant differences between insured and uninsured people in terms of condition on admission, resources used in the hospital and outcome. More specifically, the study aimed to answer the following questions. Are the uninsured sicker when admitted to hospitals? Are fewer resources expended on their care in the hospital?
And do they have a poorer outcome, given their condition on admission (Hadley et al)? Data was gathered by analyzing the discharge abstracts for 592,598 patients hospitalized nationally in 1987 (Hadley et al. ). With such a large and diverse sample size, the results of this study are more generalizable to the nation’s uninsured as a whole than studies focused on specific localities or states. Further, the researchers controlled for diagnosis and analyzed the frequency of use of expensive invasive and noninvasive medical procedures between the two groups.
And the researchers used multiple measures of condition on admission and resource use to more meaningfully compare the care given to uninsured and insured patients (Hadley et al. ). Hospital death rates were also compared between the two groups (Hadley et al. ), which is perhaps the most consequential measure of outcome. The demographics of the patients in the study were varied further contributing to the legitimacy of the study. The patients were aged 1 to 64 years and they were of white, black, and Hispanic descent.
Their modes of payment were varied as well indicating that the patients came from different socioeconomic backgrounds; some of them paid full price for procedures out-of-pocket and some were covered by insurance companies while others paid nothing at all (Hadley et al. ). DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith, U. S. Census Bureau, Current Population Reports, P60-238, Income, Poverty, and Health Insurance Coverage in the United States: 2009, U. S. Government Printing Office, Washington, DC, 2010.
Kaiser Family Foundation, “Explaining Health Care Reform: Questions About Health Insurance Exchanges. ” http://www. kff. org/healthreform/upload/7962-02. pdf. Hislop III, Reginald M. , U. S. Department of Health ; Human Services, “HealthCare. gov. ” Last modified October 26, 2012. “Health Reform and Medicaid Expansion”. HealthCare Reform Magazine. July 13, 2010. Hadley, Jack, Earl P. Steinberg, and Judith Feder. “Comparison of uninsured and privately insured hospital patients. ” JAMA: the journal of the American Medical Association 265, no. 3 (1991): 374-379.