How the Affordable Care Act Has Impacted New York

The healthcare sector in the United States continues to face various challenges undermining both healthcare access and delivery of quality medical services. Adoption of the Affordable Care Act saw a rise in insurance coverage especially for low-income households. Government subsidies on certain insurance packages have made access to healthcare services possible but only for a particular group across the country. In New York, middle-class families are suffering as the ACA mainly offers for poor families. As the soaring situation persists, in question is whether middle-class families will become the uninsured when it comes to healthcare. Those within the middle-income bracket already struggling with making payments for expensive insurance premiums, it is not likely that the situation will change soon. 

Problem 

The U.S. House of Representatives noted that repealing of the ACA would have a detrimental impact on New York residents. In this particular state, the rate of uninsured dropped from 9.5% pre-ACA to 5.5% post-ACA implementation (“Impact of ACA Repeal”, 2017). The 4% drop in those who were uninsured could, however, be reversed in the event that the act is partially repealed. Part of what the Trump administration was and is still seeking is that Medicaid expansion should be halted thereby leading to “… coverage becoming unattainable or unaffordable to the more than 14 million Americans” (“Impact of ACA Repeal”, 2017). Apart from that, elimination of premium tax credits and government subsidies will make healthcare coverage unaffordable for an estimated 10.4 million Americans who are already enrolled through the ACA (“Impact of ACA Repeal”, 2017). 

McCaughey (2017) explained that the middle-class are the big losers, as they are priced out of the individual insurance market. Notably, since the implémentation of the ACA, insurance premiums have increased considerably and that they are predicted to continue rising. The reason for the rise in insurance premiums is due to the fact that the ACA capped revenue generated by insurances. According to McCaughey (2017), insurance companies are charging high premiums in pursuit of compensation to recover from the discounts on deductions and copays to low-income individuals. Pear (2017) noted that the cheapest healthcare plan for a family of four was more than $2,400 a month which rounds of to about $30,000 annually. These figures demonstrate the pressure that the middle-class are facing due to the ACA. Thus, the middle-class has become the new uninsured not only in the state of New York but also in other regions across the country. 

Nature of Problem 

A thorough research of the nature of the problem facing the middle-class in New York as pertains to the ACA does not reveal case-specific data focused on this particular group. However, there is extensive information addressing how the ACA has led to middle-income families remaining uninsured. Dorsey (2016) explained that despite the decrease of the financial impact of purchasing health insurance for poor families, this has not been the case for the middle-class. There are about three million individuals falling under the middle-class bracket who do not qualify for financial assistance and hence are paying more for health insurance coverage (Dorsey, 2016). 

Further demonstration of the situation facing middle-class individuals involves a review of the percentage of tax returns for those paying the ACA penalty. For individuals earning about $25,000-$50,000, the percentage of tax returns was 8% nationally (Lai & Parlapiano, 2017). This percentage is inclusive of the middle-class in New York. While that is the case, for those earning under $25,000, the percentage of tax returns was 2-4% (Lai & Parlapiano, 2017). Thus, one can notice that the percentage for those falling under the middle-class category is higher than those earning below $25,000. Lai and Parlapiano (2017) emphasized that “ The $25,000 to $50,000 income group had the highest share of people paying the penalty in 2015, and several Republican senators have cited similar statistics to promote the repeal of the mandate” (para. 9). Hence, such information reiterates the considerable impact the ACA has on the middle-class. 

Figure 1: Percentage of tax returns paying ACA penalty 

(Dorsey, 2016) 

The figure above demonstrates the impact of the high insurance premiums on middle-class individuals nationwide, which also covers New York residents. There is sufficient reason to believe that middle-class residents in New York comprise a higher percentage of those paying for ACA penalty. New York is one of the most populous states in the US alongside others such as California, Florida and Texas which could mean that the middle-class comprise of the group that is paying ACA penalties. Additionally, the high rate could be due to the increasing insurance premiums account for 23%-28% of median income for New York residents (Schoen et al., 2014). 

Existing Policy 

The policy in question is the ACA which has had different effects on Americans across the country. The law was intended to promote access to healthcare insurance among uninsured populations across the country. Dorsey (2016) acknowledged that since its inception in 2010, the ACA led to an estimated 20 million Americans who acquired health insurance coverage. Initially, this was the main objective of the act, but that has not been the case when one considers income levels across populations. Section 1.36B-2(b)(1) under the Internal Revenue Service, Department of Treasure, read: 

“ In general. Except as otherwise provided in this paragraph  (b) , an applicable    taxpayer   is a    taxpayer whose    household income   is at least 100 percent but not more than 400 percent of the    Federal poverty line for the    taxpayer 's family size for the    taxable year . ” 

A review of the clause above demonstrates that those with incomes falling between the 100% and 400% of the Federal poverty line are considered as being eligible to apply for Medicaid and Medicare insurance services. However, statistics demonstrate that those at the 100% level are the ones enjoying the benefits of the ACA. 

Understandably, insurance companies have been unrelenting towards the middle-class in that they have increased premiums thereby becoming too expensive for individuals within this particular income category. Schoen et al. (2014) noted that middle-income families are exposed to high out-of-pocket fees for medical services which are computed relative to their incomes. Consequently, such a state of being forces these individuals into not seeking medical insurance, or of they do, they acquire lower level insurance plans thereby becoming underinsured. The ACA did not anticipate the growing cost of health insurance which has surpassed the incomes for the middle-class. Pear (2017) emphasized that “ Subsidies are available to help low- and moderate-income people pay premiums, but no financial assistance is available to a family of four with annual income over $98,400 ” . For such a family, the options are acquiring a lower-cost plan, but pay a higher deductible. 

Origins of the Issue 

The ACA came into effect in 2010 and since then, there has been considerable progress as pertains to acquisition of health insurance across the country. New York went to the extent of initiating expansion of Medicaid in 2014 to achieve even broader coverage hence providing eligible taxpayers with an opportunity to enroll. Schoen et al. (2014) addressed the relationship between Medicaid and income-related premium assistance. The issue is that the ACA limits individuals who already have insurance plans provided by their employers. Dorsey (2016) noted that about 4.5 million individuals are ineligible for assistance to employer state insurance, while 3 million are ineligible due to income. These statistics confirm that as the ACA has continued to be effect since 2010, it has imposed strict limitations on the middle-class, in part, when it comes to access to both Medicaid and Medicare. 

Glied and Jackson (2017) noted that by 2016, there were reduced payment rates in health care spending following coverage expansion. This was a move focused on ensuring that individuals could afford healthcare services. However, drafters of the ACA did not anticipate after implementation of expansions, hospital operating margins increased considerably. That being the case, health institutions had to look for alternatives to cover the high cost of providing healthcare services. This resulted in an increase in pricing for medical services thereby prompting insurance companies to increase their premiums. Consequently, in states such as New York which expanded Medicaid coverage “ The largest absolute gains in coverage were among those with the lowest incomes ” (Glied & Jackson, 2017, p. 539). Thus, middle-income families especially those with employer-based insurance plans could not access Medicaid, and even without such a plan, affording the high insurance premiums became difficult. 

Group Affected 

Following an extensive review of information about the ACA, it becomes clear that low and middle-income families suffer the greatest effect. Both of these groups suffer ineligibility due to their respective level of income. However, for the middle-class those eligible cannot have any other existing insurance plan whether public or employer-based. Even without such coverage, insurance premiums are expensive and families cannot afford the rather high deductibles they are supposed to pay. 

Conclusion 

Despite the ACA’s positive impact of promoting access to healthcare services among low-income households, there is evidence demonstrating that the middle-class have assumed the status of those uninsured and underinsured. A review of the ACA shows its limitations which are based on income earned and whether there is provision of public insurance or employer-based plans. Families falling within this category find themselves paying high insurance premiums thereby making it difficult for them to acquire health insurance under the ACA. Middle-income alongside some of the low-income households continue to suffer the negative effects of the ACA as has been explained. While there is little information focusing on New York alone, the data gathered is representative of the national impact of the ACA on the middle-class hence its relevance. 

References 

Dorsey, J. (2016, October 19). Who are the remaining uninsured Americans? Health . Retrieved from https://www.healthedeals.com/articles/who-are-the-remaining-uninsured-americans 

Glied, S., & Jackson, A. (2017). The future of the Affordable Care Act and insurance coverage.  American Journal of Public Health ,  107 (4), 538–540. http://doi.org/10.2105/AJPH.2017.303665 

Impact of ACA Repeal on the 19th Congressional District of New York. (2017). Retrieved from http://hcfany.org/wp/wp-content/uploads/2017/03/NY-19th-John-Faso.pdf 

Lai, R. K. & Parlapiano, A. (2017, November 28). Millions pay the Obamacare penalty instead of buying insurance. Who are they? The New York Times . Retrieved from https://www.nytimes.com/interactive/2017/11/28/us/politics/obamacare-individual-mandate-penalty-maps.html 

McCaughey, B. (2017, September 6). Obamacare is making the middle class the new uninsured. New York Post . Retrieved from https://nypost.com/2017/09/06/obamacare-is-making-the-middle-class-the-new-uninsured/ 

Pear, R. (2017, November 6). Middle-class families confront soaring health insurance costs. The New York Times . Retrieved from https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.html 

Schoen, C., Hayes, S. L., Collins, S. R., Lipa, J. A., & Radley, D. C. (2012). America ’s underinsured: A state-by-state look at health insurance affordability prior to new coverage expansions . The Commonwealth Fund.