The Affordable Care Act (ACA) was signed into law in 2010 to expand the healthcare insurance coverage to millions of uninsured people in the US. The increasing cost of healthcare had made it difficult for millions of Americans to access proper medical care. Besides extending healthcare insurance coverage to the poorest population, ACA aimed at reforming the insurance market and improving the standards of quality healthcare. While the expansion of healthcare insurance coverage was good, the challenge of adverse selection must also be addressed to improve the efficiency of healthcare insurance. Adverse selection occurs when more people with complicated medical conditions buy healthcare insurance at a specific price that is costly for the insurance providers ( Jost, 2010) . Sometimes, an individual fails to reveal their medical history when making claims under a specific plan while providers can also fail to reveal the medical condition to the client due to some factors such as anti-discrimination laws. The introduction of the ACA eased insurance load from people with complicated medical conditions thereby solving the challenge posed by adverse selection, hence ensuring the stability of the operation of the healthcare insurance market.
Adverse selection is the most significant threat to insurance markets and can occur in a combative pricing environment in the healthcare insurance industry. Clients usually evaluate their current healthcare condition and often select a specific healthcare insurance plan that meets or comes close to meeting their healthcare needs ( Jost, 2010) . For instance, providers can offer two different plans with one offering fully comprehensive coverage and another one that offers limited coverage ( Jost, 2010) . The one with a limited coverage can be targeted for the young and healthy individuals while the aged would choose a comprehensive plan as they are vulnerable to diseases. Adverse selection can also occur between insurers, benefit plans, and markets because it often goes unchecked as individuals tend to wait until they feel they need insurance for them to purchase insurance coverage. As a result, insurance providers are strained as fewer people are paying for health coverage while the number of contingencies is high. Ideally, the insurance industry works efficiently when the majority are purchasing and paying for insurance coverage to cater for the contingencies incurred by a few individuals. Also, evidence indicates that high-risk individuals are more likely to purchase insurance plans to take advantage of the younger and healthier individuals while the young and healthy might decide to stop paying for their insurance cover since they believe they are less likely to fall sick (Jost, 2010). As a result, the cost of healthcare insurance cover significantly rises. Thus, it makes great sense to minimize the impacts of adverse selection in the healthcare insurance industry to make healthcare insurance a feasible financial product.
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The opponents of ACA argue that the expansion of healthcare insurance is expensive as it comes with a significant financial cost. Several attempts aimed at repealing ACA based on the belief that it has severe economic effects have been failed in recent times. Sheils and Haught (2011) explained that the inception of ACA in 2010 was expected to cover about 21–24 million of the uninsured. Shartzer, Long, and Anderson (2016) noted that although the coverage among the uninsured population had significantly increased by 2016, the expansion is still insufficient. The Kaiser Family Foundation indicated that the ACA template aimed at reducing the number of uninsured people from 50 million to 22 million by 2016 but more than 30 million people were still uninsured by the end of 2016 (Artiga & Damico, 2016). While the current administration has been keen on the economic burden associated with expanded healthcare coverage, Artiga and Damico (2016) indicated that expanding healthcare insurance coverage to about 32 million uninsured population in America would not require significant financial resources.
One of the most significant challenges of expanded healthcare insurance is its impact on the quality of healthcare services that patients receive. In the case of ACA, it was unfortunate that the lowered insurance premiums reduced the number of doctors available in a patient’s network under their provider. As a result, many people were more likely to lose their primary care physicians with expanded insurance coverage.
Meeting the standards set out by ACA regulations had emerged as one of the challenges of healthcare expansion in the US. For instance, many citizens failed to meet the regulations although President Obama had hinted earlier in 2009 that citizens were free to keep their plans if they were comfortable with them. Nevertheless, healthcare expansion outcomes have significantly deteriorated with regards to the competitiveness amongst the insurance providers as far as an individuals’ choice of providers and insurance plans offered is concerned. Records from the senate indicate that the number of healthcare insurance providers decreased by 6% by 2016 (Senate.gov, 2016). Some states were adversely affected than others with the number of insurers in Alabama declining from 23 to 3, Wyoming from 21 to 1, and Arkansas declining from 24 to 4 healthcare insurers (Senate.gov, 2016). However, the state of Georgia did not receive a significant change.
Although the initial plan of ACA healthcare insurance expansion was to increase the affordability of healthcare insurance, the immediate outcomes were unfavorable. For instance, evidence indicates that ACA resulted in higher deductibles and higher premiums, which increases the cost of healthcare insurance. There was a 10% increase in the Family Silver exchange plan from 2015 to 2016 (Cox et al. 2016). Also, the cost of a benchmark silver plan in the lowest- and second-lowest-cost silver marketplace plans in major cities in ten states and the District of Columbia increased by about 4.4% from 2015 to 2016 (Cox et al., 2016). Thus, healthcare insurance expansion might burden the economy with the increased cost of healthcare insurance while at the same time reducing the choice of insurance plans and doctors.
The expansion of healthcare insurance had positive effects on the state of Georgia. It was estimated that between 2010 and 2015, some 581,000 individuals from Georgia benefitted from the ACA as they gained healthcare insurance coverage (Norris, 2020). Nevertheless, the state of Georgia did not expand Medicaid under the ACA (Norris, 2020). Thus, it can be said that Georgia has not taken full advantage of insurance coverage expansion opportunities provided by the ACA. If the state of Georgia was to expand Medicaid as stipulated under the provisions of ACA, it is estimated that the rate of uninsured individuals would drop by about a third (Simpson, 2020). Based on the small benefits that the citizens of Georgia have reaped and the estimated number of people that are set to benefit from the expansion of Medicaid as provided by the ACA in Georgia, it can be concluded that any attempts at repealing the ACA would result in a significant loss of healthcare insurance coverage for the people of Georgia.
In summary, the expansion of healthcare insurance coverage has both benefits and costs but the benefits by far outweigh the costs. The benefits are evident in the increased number of people who are covered by ACA. However, the negative impacts are evident when the reduced the number of doctors available in a patient’s network under their provider. As a result, several people are more likely to lose their primary care physicians with the expanded insurance coverage as in the case of ACA. In Georgia, healthcare insurance expansion has not been expanded. Expanding the coverage would see more people benefit from the federal insurance plan at affordable prices.
References
Artiga, S., & Damico, A. (2016). Health and health coverage in the South: a data update . Henry J. Kaiser Family Foundation. doi.org/10.1002/9781119085621.wbefs530
Cox, C., Claxton, G., Levitt, L., Long, M., Gonzales, S., & Sroczynski, N. (2016). Analysis of 2017 Premium Changes and Insurer Participation in the Affordable Care Act's Health Insurance Marketplaces . Henry J. Kaiser Family Foundation. doi.org/10.1001/jama.2015.121
Green, L. V., Savin, S., & Lu, Y. (2013). Primary care physician shortages could be eliminated through use of teams, nonphysicians, and electronic communication. Health Affairs , 32 (1), 11-19. doi.org/10.1377/hlthaff.2012.1086
Jost, T. S. (2010). Health insurance exchanges and the Affordable Care Act: Eight difficult issues (p. 19). Commonwealth Fund.
Norris, L. (2020, June 10). Georgia health insurance marketplace: history and news of the state’s exchange: Obamacare enrollment. Health Insurance. https://www.healthinsurance.org/georgia-state-health-insurance-exchange/
Page, L. (8). ways that the ACA is affecting doctors’ incomes. The NEJM Career Center .
Senate.gov. (2016). Report From the Office of Senator Ben Sasse - Competition and Choice: A Report on the ACA’s 2016 Exchanges . US Senate. https://www.sasse.senate.gov/public/_cache/files/b091dd97-f3f6-4b6e-8a3c-f95171768dcc/competition-and-choice---a-report-on-the-aca-s-2016-exchanges.pdf
Shartzer, A., Long, S. K., & Anderson, N. (2016). Access to care and affordability have improved following Affordable Care Act implementation; problems remain. Health Affairs , 35 (1), 161-168. doi.org/10.1377/hlthaff.2015.0755
Sheils, J. F., & Haught, R. (2011). Without the individual mandate, the Affordable Care Act would still cover 23 million; premiums would rise less than predicted. Health Affairs , 30 (11), 2177-2185. doi.org/10.1377/hlthaff.2011.0708
Simpson, M. (2020, June 8). The Implications of Medicaid Expansion in the Remaining States: 2020 Update. Robert Wood Johnson. https://www.rwjf.org/en/library/research/2020/06/the-implications-of-medicaid-expansion-in-the-remaining-states--2020-update.html?cid=xem_other_unpd_ini:quickstrike_dte:20200608_des:medicaid%20exp
