Affordable Care Act is among the U.S. federal statutes that were enacted by the United States to regulate its healthcare system. According to Cohn (2013), President Barack Obama “signed the Affordable Care Act into law in March 2010” with the aim of increasing affordability and quality of health insurance. It is through expansion of insurance coverage on all citizens and legal immigrants in the United States. The Affordable Care Act also sought to strengthen Medicare, provide more protection and rights for Americans regarding health issues such as security on health insurance. For example, it provided the options for the individual states to expand the accessibility of Medicaid by low-income families (Cohn, 2013). However, the Affordable Care Act led to various impacts on the health stakeholders such as Insurance companies, Hospitals, and the Healthcare Practitioners. This paper aims at identifying the reform initiatives that were established since 2011 for effective and efficient implementation of Affordable Care Act on Individual Insurance market. In addition, this paper provides analysis on how such reforms intended to influence the individual insurance market, as well as the alternatives that insurance companies adapt for survival in their competitive industry.
There are various changes associated with the Affordable Care Act that targeted to change the scope of the overall healthcare system, especially on a specific group of people. In this case, among the reforms that were established to shape the individual insurance market include the adoption of Insurance Standards in 2011. The reform stipulated that all insurers must spend 80% of the premiums sold on improving the quality of health care and direct patient’s care (Gruber, 2008). The provision also gives the individual state an option to waive the 80% medical ratio if the policy would destabilize their individual health insurance market. To survive the new laws proposed by the Affordable Care, the Insurance Companies reduced the operational and administrative costs through elimination of traditional brokers in selling of health insurance policies. Another alternative is to exit the individual insurance market if the 80% standard may hinder the insurance companies.
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The other fundamental change in the healthcare system was the adoption of Health Insurance Exchanges, which was projected to be operational by the end of 2012 (Long & Massi, 2009). The reform provided individual states with flexible procedures in establishing insurance exchanges. The procedural model of establishing exchanges in each state would depend on state’s political climate, funding, population, and existing infrastructure. The implication of Health Insurance Exchange reform includes variant accessibility of insurance services in the individual market where the individuals would consider the benefits and costs of exchange participation over remaining uninsured. However, the exchange-qualified plans that determine the rates of provider reimbursement may influence the willingness of the healthcare providers in joining the networks. The insurance companies streamline this reform by improving the consumer's experience such as attractive plans, efficient enrollment procedures, good customer service, and orientations, among others.
Another reform associated with Affordable Care Act is Flexible Spending Accounts (FSAs) that became effective in 2013. This healthcare reform limited the contributions for FSAs to $2, 500 per annum. Such contribution cap was indexed in consideration of all urban consumers including the inflation of consumer price index. Unfortunately, the limitation of premium charges may discourage the individuals from using flexible spending accounts. The FSAs funds are mostly used to cover eligible charges that are not covered by individual’s health insurance plan such as dental and vision expenses. To adapt to the laws by ACA, the insurance companies extend or formulates their premiums to cover such expenses.
Lastly, the reform that aimed to change the scope of health care system is the Individual Mandate that was slated to be effective at the beginning of Jan 2014 (Cohn, 2013). The provision stated that most citizens in the United States must have minimum health insurance coverage. Otherwise, they would face penalties that are payable by the 2014 financial year. The individual penalty is $95 or one percent of his or her income in 2014, $325 or two percent of the income in 2015. The individual’s penalty increases in 2016 to $695 or 2.5 percent of one’s income. For the family penalty, the reform outlines that $2085 or 2.5 percent of the overall household income should be charged. Unfortunately, the penalties are very low as compared to the average costs spent in purchasing insurance premiums or other healthcare plans (JAMA, 2008). In this case, it would be very difficult for the individuals to be influenced by the penalties outlined in the reform due to its less servere punishment for the offenders by opting to pay penalties. However, the insurance companies need to conduct or formulate affordable plans to attract the individuals in purchasing health insurance premiums voluntarily.
The effects of the Affordable Care Act on the Population it affected
The ACA is fit for extending its scope to a large number of the uninsured people countrywide (around forty-seven million nonelderly), which contains 1.6 million individuals from North Carolina, who are uninsured. However, ACA contains specific coverage which concerns workers who have high earnings and those with low wages. It is due to the progress of Medicaid grown-ups' eligibility that serves as the channel for those with low wages. Besides it helps people to buy insurance without difficulty through rich Health Insurance Marketplaces as it acts as a channel which covers people with little income.
The ruling of the Supreme Court in 2002 led to the relief on Medicaid, for instance, it was not mandatory for state members. On the same note, in 2013 December, some states, for example, North Carolina, was not ready to exercise the expansion. As such, several uninsured grown-ups for Medicaid stayed with no alternative for coverage. As the law coverage extensions stay affected and coverage modifications assessed, it stays important to think about the possible range of the law in this state
The Impact of the Economics of Providing Care to Patients from the Organizations Point of View
The ACA offers a reliable relief on financial costs to workers who have low income as well as those with high income through a rich tax credit to assist in payment of the cost of the insurance premium. However, these premium credits compensate for a huge part of the premium for medical coverage. The tax credit is a certain amount which controls the amount that should be paid by different families as insurance premium, and to avoid overspending on premiums.
Before the ACA usage, almost each organization and business that had more than one hundred workers were offering coverage of Medical Insurance Covers to their laborers. Moreover, in ACA, these organizations should continue offering the health insurance coverage to their employees. Consequently, recognized organizations providing as a lowest one permanent employee enrolled in the coverage which is subsidized experience similar punishments like the middle-level organizations. Organizations with more than two hundred laborers should give them insurance coverage and must enroll all its full-term employees. On the other hand, workers should have the opportunity to sidestep the arrangement in case they do not like the coverage plan. On the same note, ACA's focus on large organizations plans to heighten protection cover in relation to work and business commitments to medical coverage.
Impacts on Patients in Relationship to Cost of Treatment, Quality of Treatment, And Access to Treatment and the Ethical Implications on both the Organization and the Patients
Obamacare has a way in which operations are carried out in the departments of healthcare within the state. The whole duties conducted by health care organizations have been mostly influenced. Moreover, it has affected the clients and their families. As such, it has increased strain on provision of the high-quality care at lesser expenses and using limited money-related plans. Also, the leaders of healthcare remain focused with the duty of influencing change in all therapeutic services organizations to practice the suggestions of the Act. In this way, every pioneer has a general concern which is transformation. Consequently, they need to adjust the way they do their duties at all times through finding out whether the changes can turn into long-standing achievement. Social insurance associations use different techniques to ensure this transformation is affected. Regardless, the variations, the principle target stays the same for the whole associations (JAMA, 2008).
The provisions of the Obamacare is to control expenditures, build protection coverage, together with aiming preventions. The act brings important moral aspects of integrity, by individuals, and groups. In a similar way, the lawmaking body strives to ensure the ways of providing healthcare is of moderate costs to everyone, whether with any disability or without.
Although the Affordable Care Act is mainly referred to as Obamacare and President Barrack Obama had a lot to do with its final passing, the authority of the departments in Washington, the support of the Senate and the government played a similar role in the achievement of the healthcare bill.
The Advantages of Obamacare
The common advantage is that Obamacare makes medicinal services administrations reasonable and open to nearly everybody. The way that it requires all medical coverage arrangements to cover no less than ten critical health benefits and rights favors a huge number of clients and uninsured nationals by providing low or free medicinal services costs. As such, it permits parents to cover their kids up to their twenty-sixth birthdays, which in turn, gives more benefits to Insurance Agencies.
Obamacare aims at improving the health of all Americans by ensuring that they have health protections either by a private agency or by a program sponsored by the government. On the same note, if anyone does not have an insurance cover he or she must give a tax which is equal to one percent of his or her salary in 2014 and 2.5 percent in 2016. The care program has expanded the Medicaid to above 15million Americans, who had low income. As such, the current laws on health care has started to reform the health department by reducing waste, fixing what does not work, ensuring good health to Americans and reallocating funds given by the state government.
The Drawbacks of Obamacare
Despite its benefits, Obamacare is an exceptional rival in the insurance market since it aspires for giving superb health care with low costs or even free. JAMA (2008) points out that the Obamacare also offer coverage to sick individuals, which leads to expansion of insurance. As such, it contrarily influences the individuals who might not have any desire to buy the insurance through Obamacare charge punishments. In comprehensive logic, Obamacare is very sustainable and lead to the provision of quality and affordable medicinal services for workers who have low wages, the youthful generation, and the whole public (JAMA, 2008).
Economic consequences of Obamacare
Until amendment of the Affordable Care Act, the greater part of US Nationals had an organization sponsored protection plan, and the United States was the main rich country in which the situation was witnessed. Organizations started offering protection strategies during the second world war to draw in talent from the reduced supply of employees, a practice later upheld by taxed policies that supported untaxed advantages, (for example, health care) instead of taxable ones like cash. Consequently, offering insurance to (or “intending to”) getting money as compensation made companies take responsibility for the health of their employees. Besides, rising costs of insurance combined with increased compensations crushed both advantages and wage rates, until aging employees discovered their pay rates stagnating and their advantages cut (JAMA, 2008).
Starting 2014 large organizations’ strategies were still the standard, since duty laws until 2018 make advantages less expensive than money, but several workers have been losing their chances of being covered by the companies they work for, and they must locate their particular insurance. Also, with the protection framework presented under the Affordable Care Act, managers who ceased their organization sponsored plans for insurance eliminated one of their biggest payment benefits. As such, a lot of costs were shifted to the workers. These comprise the protection premiums ascending to twenty-eight percent in 2013, compared with twenty-six percent in 2003 (JAMA, 2008).
Opinions of the Public about Affordable Care
In general, polls from the public show that many people who stay in the United States support the reforms in the healthcare departments. Conversely, the perception of the public became more negative to only particular plans which are covered in the Obamacare. A statistic indicates that in the first year of the initiation of the Obamacare, around Fourty percent of the Americans supported it and around Fifty-one percent were against it. The number which supported the reformation of healthcare bills rose to Seventy percent with around Twenty-one percent of whites, Sixty-one percent of Hispanics, and Ninety-one percent of African-Americans.
In conclusion, the enactment of Affordable Care Act led to significant changes in the United States healthcare system. This article has demonstrated various reforms adopted in the U.S. healthcare system from 2011 to 2014 and their impacts on individual mandates and the Health Insurers. However, the discussed reform initiatives have demonstrated the way it would be difficult to implement them due to lack of clear measures of influencing the individuals in subscribing to the available healthcare insurance packages. It is because some of the reforms discourage individual participation or increase the costs of Healthcare Insurance that even discourage employers from paying for their employees as an additional benefit.
The rate of inflation rises due to the high levels of premium paid to the Insurance companies. As such, the employers have stopped paying for the insurance covers of their workers with the fear of losing a lot of money to the Insurance Companies. The Affordable Care suggests that wage limits should be raised so that the employees can pay their individual premiums and at the same time their families. According to Obamacare, the insurance plans require parents to cover their children until they reach twenty-six year of age. At this time, the child can also start paying his or her premiums to an Insurance Company he or she chooses to register at a time they are in employment.
Cohn, J. (2013). Obamacare's Individual Mandate Can't Wait. The New Republic. Retrieved from http://www.newrepublic.com/article/113851/obamacare-individual-mandate-republicans-push-delay
Gruber, J. (2008). Covering the Uninsured in the United States. Journal of Economic Literature 46 (3): 45-56.
Jama, J. (2008). Affordable Health Care for All Americans. JAMA , 300 (16), 1927. http://dx.doi.org/10.1001/jama.2008.515
Long, S.K., and Massi, P. (2009). Access and Affordability: An Update on Health Reform in Massachusetts. Health Affairs 28 (4): 34-29.