Patient Protection and Affordable Care Act of 2010 - Article Example

? Patient Protection and Affordable Care Act Patient Protection and Affordable Care Act of Introduction It is a fact that healthcare costs in America have spiraled out of control in recent years. Even with insurance, the burden of payment for even the most basic of medical procedures has bankrupted many families. For those that cannot afford to pay, the quality and standard of care is low and the burden of payment is born by the taxpayer. Couple this with the fact that insurance has become prohibitively expensive for many families, a perfect storm has resulted that has truly bought the entire integrity of the healthcare system within the country to a breaking point. The Patient Protection and Affordable Care Act (PPACA) of 2010 has entered into the legislative arena as a valiant effort to begin to address these very issues of cost-containment and quality of service. It has been billed as the most comprehensive reform effort in the country, in terms of healthcare services, since Medicare was introduced nearly 48 years ago. While the legislation itself and quite complex and far beyond that scope of this paper, the basic premises are rather simple to understand. In essence, PPACA strives to immediately make insurance more affordable and accessible to all Americans, thereby increase the percentage of the population that are covered. This would result in reducing the overall costs currently inherent in the system by providing a series of mandates, subsidies, and tax credits. Both employers and the working public, in theory, will benefit from PPACA. This paper will examine the development of the Act, how it is funded, and the benefits to the American public and the nation as a whole. Immediate and Positive Development for the U.S. Healthcare System The Patient Protection and Affordable Care Act of 2010 is meant to require that insurance companies cover all applicants, according to new minimum standards as set forth by the legislation, and to offer everyone the same prices no matter if there or pre-existing conditions or not. In addition, the rates are designed to be the same, regardless of the sex of the customer (Kaiser Foundation, 2013). This is a positive development for the healthcare system because it standardizes the manner in which costs are allocated across the system. In addition, by requiring individuals to have a certain level of insurance coverage, the burden of paying for necessary medical procedures should immediately be lessened. In addition, the best medical care will no longer be reserved for the wealthy and elite, as the legislation provides mechanisms designed to improve the overall quality of medical services offered nationwide and to greatly streamline the manner in which those services are delivered. The name of this piece of legislation actually implies its anticipated positive impact on the country. Medical care today is simply not affordable for the vast majority of Americans. Therefore, county hospitals and clinics are overworked, understaffed, and poorly equipped. Americans deserve better access to the medical services that have made the industry the model of the world. This Act accomplishes that by making such care affordable once again. In addition, cost-containment measures will be implemented that will reduce the wasteful spending habits of hospitals and will also serve as a way to streamline operations to keep prices down. Forming more elaborate and structure health provider networks, for example, will serve to centralize billing options and eliminate redundant services that, to this point, have causes prices to skyrocket (Kaiser Foundation, 2013). The effects of PPACA should be immediate and should also be seen as a positive development the U.S. healthcare system, while understanding that there will certainly be some growing pains along the way. Impact on Patients Naturally the title of this legislation itself implies that patients will receive a direct impact and benefit from its implementation. Historically, the poorest among us have been denied access to many healthcare services that the elite take for granted. This is primarily due to factors stemming from the astronomical costs of medical procedures and the lack of affordable insurance options. As such, many individuals simply go without insurance, banking their hopes on the fact that their health will hold out. The PPACA works to provide an immediate and direct impact on all Americans, particularly those living at, near, or below the poverty line. An example of this is the provision that provides low-income Americans (those living at between 100 and 400% of the poverty line) with federal subsidies that they can use to purchase private insurance via an exchange network. The premiums would be tied to their income, averaging just 3 to 4 percent of their salary (Lemieux, 2013). Currently, most individuals in a particular demographic group incur the same insurance premium, so tying the cost of insurance to a person’s actual salary is a bold and creative move aimed at getting everyone insured within the first few years of the law’s implementation. Perhaps the most felt impact of PPACA on patients will be aspect of the legislation that is labeled ‘individual mandate’. Simply put, this requires every American, who is not already covered by some approved type of medical insurance plan, get their health coverage. Failure to do so will result in a financial penalty, unless the individual qualifies for an exemption or financial hardship. As a result of this, however, health insurance exchange networks will become commonplace in each of the 50 states. Such exchanges will provide individuals with a marketplace where they can compare different health insurance policies and premiums (Lemieux, 2013). This also allows individuals and small business to buy insurance at rates below those existent today, even using federal subsidies if qualified. Funding and Costs One of the criticisms from that outset of even proposing this new piece of legislation was the potential cost associated with its implementation. This has been tempered somewhat with a detailed accounting for ways that the program will be paid for. As such, there are a variety of funding options that will be utilized in order to account for the expenses that are expected to become reality in the coming years. To being with, the Patient Protection and Affordable Care Act of 2010 includes a heightened Medicare tax on individuals earning more than $200,000, with a separate threshold of $250,000 for joint tax-filers. A fee will also be levied on companies that provide health insurance, and this will be paid annually. In addition, there is a provision to include a 40% excise tax on any insurance policy that is deemed excessive and not really necessary (Kaiser Foundation, 2013). To ensure that more taxes are collected in the future, there is no policy of adjusting income levels in the future due to inflation. This ensures that a healthy pool of taxpayers will likely be contributing more the revised healthcare system as decades go by. Additional taxes to be collected will come by way of higher taxes of prescription medication, high-cost diagnostic equipment, and a mandatory 10% federal tax imposed on indoor tanning services. The implication is that elective beauty procedures that could compromise one’s health may be subject to additional taxing measures in the future. In order to appease legislators and to explain how the new healthcare act would be paid for, the government issued 10-year projection figures. As mentioned, the Medicare tax on all earners would increase by .9%, while high-income earners would be subject to an added 3.8% tax. This equates to an estimated $210 billion over the first ten years that the legislation is implemented. The annual fee on health insurance providers is estimated to generate $60 billion during the same time frame. The excessive insurance policies tax kicks in when an annual premium rises over $10,200 for an individual, or $27,500 for a family. This would amount to a 40% excise tax, which is estimated to generate more then $32 billion in the first ten years alone (Lemieux, 2013). A tax would also be imposed on companies that manufacture and import brand name prescription drugs. This is estimated to bring in $27 billion over ten years to offset the costs of PPACA. The 2.3% excise tax on companies that manufacture and import certain listed medical devices will generate an additional $20 billion in ten years that will be designated for the healthcare act as well. Currently, taxpayers are able to deduct taxes when their medical expenses are more then 7.5% of their Adjusted Gross Income in a given year. That will now be raised to 10%, which will save an estimated $15 billion over 10 years in tax deductions, which will be directly allocated to pay of PPACA. There are also multiple other funding options listed that will generate an additional $28 billion dollar over ten years (Lemieux, 2013). This is quite a detailed accounting of methods that will pay for the program, as long as estimated costs associated with its implementation are truly realistic and stay within a given range. Benefits to the Country The United States serves to benefit from the implementation of the Patient Protection and Affordable Care Act. From the outset, states will be permitted to make a wider range of health care decisions that, in the long run, will drive the costs of medical care down and provide more individuals with better and more effective medical services. Kathleen Sibelius (2013) stated, “PPACA gives specific powers to states in order to provide for and safeguard the health needs of their citizens”. By creating the health care exchanges described earlier in this paper, individuals will be able to get their own insurance at rates never before seen in modern times. This includes small businesses as well. The benefits to the country are potentially enormous, as the number of uninsured patients will decrease almost overnight once the provisions of the individual mandate begin to kick in. Employers nationwide will also reap benefits from PPACA. Beginning in 2014, individuals and small-business owners will be able to combine their resources to negotiate lower insurance rates. Under the current system, this reality is seen only by large companies that offer employer sponsored health coverage. Under the new system, individuals will become part of the marketplace, being able to effectively gain themselves group health coverage on their own. States will then be able to create their own policies to ensure that rates are adjusted down to meet the mandate of the legislation and ensure that everyone is truly covered. A large country, such as America, has different geographical needs. There is likely no one policy that services the needs of the entire populace. Under PPACA, states will have the flexibility to determine what plans best serve their citizens, and then work to get them covered (Sibelius, 2013). Upon implementing the individual mandate provision as early as next year, states across the country will see taxpayer expenses lowered as federal subsidies kick in, and more individuals have insurance to cover necessary medical procedures. Impact on Society and Economy Currently, hospitals across the country are obligated to treat sick patients with the highest of care, even if they lack insurance or the financial means to pay. It is common knowledge that this does not imply they received the best medical care possible, but they do receive treatment nonetheless. This has put a financial burden on the industry that has bought many hospitals and clinics around the country to a near breaking point. The individual mandate provision of PPACA helps to close this reality be requiring individuals to secure their own insurance, thereby providing a direct and immediate impact on society and the economy. Not everyone agrees with the forceful suggestion that every person must get insurance. Some would argue that it is their right to choose not to do so. In a society that values human life, however, patients cannot simply be turned away when in need of medical assistance. As such, it is society that bears the burden, not the individual. The individual mandate, then, is seen as a responsible answer to this dilemma moving forward (Lemieux, 2013). There was a lot of give and take in this legislation. To be fair, there are many in the country that are saddened to see the passage of PPACA. Their voices should be heard. In fact, in terms of societal impact, the effects will be felt far and wide. There were modifications made to the legislation, however, to mollify some of the criticism lodged at this particular piece of legislation. With a vast percentage of the country opposed to abortion procedures, for example, there are provisions in PPACA specifically barring the use of federal funds for abortions, except in cases of rape, incest, or to save the life of the mother (Kaiser Foundation, 2013). Insurance programs that receive federal subsidies cannot be used for these procedures, or for other listed and morally questionable activities. While the program will never make everyone happy, the reality is that the legislation makes an attempt to address certain social issues that form the basis for many objections and causes for concern. The economy will also be greatly impacted on many fronts. The initial cost of implementing these new policies will understandably be quite high, yet as mentioned previously, most of the expenses will be funded in a matter of one decade. In addition, small businesses who were previously priced out of being able to offer the employees health insurance options, will now receive federal tax credits to do just that (Kaiser Foundation, 2013). Small businesses form the backbone of America. By focusing on the needs of employers with fewer than 10 workers, PPACA has revitalized access to quality medical care that was previously denied to this demographic. Conclusion While there is arguably strong criticism lodged at the Patient Protection and Affordable Care Act of 2010, there are few individuals who would not content that something had to be done to right the path that the healthcare system in America was taking. With costs spiraling out of control, little government oversight, and millions going uninsured, the current system is literally nearing a breaking point. While the country can no longer shoulder the burden of paying for uninsured patients, the nation cannot morally turn people away from receiving the care that they need. In the end, however, insurance premiums are currently too high for many to even consider taking out the most basic of policies. Until that day arrives, millions more will likely hedge their bets that they will remain absent and not need any major medical services to speak of. The PPACA is a valiant effort to set the nation on a course towards responsible healthcare once again. It is not perfect, and there will understandably be changes that become necessary along the way. The fact of the matter is, however, that no other plausible solution exists. The time to act is now, not in the future, so the individual mandate and the cost-containment measures contained in the legislation should serve as a buffer in the coming decade. The nation should begin to see reduced expenses associated with healthcare, fewer uninsured patients, and all the while experience resurgence in the quality of medical care and service that has made America the model of the world in terms of health care provider networks. References Lemieux, S. (2013). The individual mandate: Not a slippery slope. American Prospect (14 Feb 2013). Sebelius, K. (2013). Health care reform lets states make health care decisions. Health Care Legislation, Washington Post (10 Feb 2011). The Henry J. Kaiser Family Foundation. (2013). Washington Offices: Washington D.C. Read More