Introduction
Obama's Health Care Plan popularly known as ObamaCare is officially termed as the Patient Protection and Affordable Care Act (ACA as abbreviated) which has been made in law as on 23rd March in 2010. The bill purports to provide "affordable, quality health care for all Americans and reduce the growth in health care spending and for other purposes". As per the report of PBS, 44 million Americans are without health insurance and the primary reason for this is the exorbitant cost of health insurance in USA. President Obama by enacting this law wants to make sure of every American gaining an access to healthcare. Since its inception ObamaCare has been subjected to a widespread criticism due to the whopping cost of estimated $1.5 trillion to put this plan into action. This paper will discuss the key features of ObamaCare touching upon the pros and cons of the policy and the view of different stakeholders on the same.
The key features of ObamaCare healthcare policies include the following:
Coverage for All:
- This plan will make a new national healthcare plan, similar to the healthcare insurance available to the members of Congress, available to all American residents including self-employed individuals and small business owners.
- ObamaCare allows citizens the benefit of paying affordable premiums, co-pays and deductibles. People who are unable to qualify for Medicaid or State Children's Health Insurance Program (SCHIP) will receive a federal subsidy based on their income to be able to purchase a private healthcare plan. Further, participants of these new healthcare plans would be able to move from job to job without bothering about changing their healthcare coverage.
- Until now healthcare insurance agency could refuse someone on the ground of pre-existing health condition or the benefits offered could be limited for that condition. Under this new healthcare plan, a child below age 19 could not be limited or excluded from an insurance coverage just because of an illness or disability he or she developed prior to the application for coverage.
- This new plan allows insurance coverage to children till the age of 26 years through their parents' insurance policy even though they are married, attending school, not living with their parents and financially independent.
- Earlier an insurance company could cancel the insurance coverage of someone if he makes an unintentional mistake or leaves out information on his insurance application but the ObamaCare prevents such retroactive cancellation of insurance coverage.
- Further ObamaCare ensures that someone can practice his right to appeal if an insurance plan denies paying for a treatment or service.
Costs
- Previously, many healthcare plans apply an annual limit or dollar limit on the yearly expenditure on covered benefits. Many plans even set a life time limit or dollar limit on the maximum coverage one would get throughout his life time under a plan. Any cost exceeding those limits was to be paid by the person from his own pocket but ObamaCare prohibits the lifetime limits on most of the benefits.
- ObamaCare mandates insurance companies to expend the premium dollars of the subscribers primarily on healthcare by enforcing the '80/20' policy. Under this new law, insurers will have to spend 80% premium on the improvement of the quality of healthcare and direct medical care (HHS).
- ObamaCare puts a Rate Review Program in place in order to protect the subscribers and small businesses from unexplainable increase in health insurance rate for about 10% or more. Under this program, insurers will have to post their explanations for the increase on HealthCare.gov so that the reasons could be scrutinized and be accepted or rejected by the state regulator.
- Prescription drugs are comparatively quite expensive in USA than Europe and Canada. Under ObamaCare, Americans are now allowed to purchase medicines from other developed countries if the drugs are available at low price.
Care
- ObamaCare makes it mandatory for many insurers to provide free of cost preventive healthcare services including vaccination, blood pressure, mammograms, cholesterol tests, colonoscopies, osteoporosis, gestational diabetes screening for women pregnant for 24-28 weeks or at high risk of gestational diabetes, syphilis, cervical cancer and many more.
- ObamaCare allows one to choose any primary care provider as one's doctor and invalidates the requirement of a referral from a primary care provider before seeking treatment from OB-GYN specialists. This plan also allows one to seek emergency care in a hospital outside the network of one's healthcare plan without prior approval (HHS).
Funding
As per the estimation made by the Obama campaign the new healthcare reform plan will cost about 1.1 trillion by the next decade when the plan is fully phased in. President Obama wants to pay for the total cost of this health care plan primarily through an increase of tax rates for people earning in excess of $250,000 a year by reducing their deductions on charitable contributions and mortgage interest. People who used to pay income taxes at 33% or 35% rates could claim deductions on those rates but under ObamaCare, they could get deduction of only 28% of the value of those income tax payments. High-earning families would also have to pay higher premiums to get benefits from a prescription drug plan or Medicare's doctor plan. Tax cuts would be extended to middle class and poor working families and the gap would be compensated by the sale of new carbon-emission permits for renewable energy projects (Meckler, 2009). Due to the cap and trade program being in place to fight global warming, companies would be forced to purchase these permits. Apart from the ObamaCare cost the policy plans to expand Medicaid which will result in $1.5 trillion additional cost. These costs are offset by new health care industry taxes, health care cost cuts, penalty payments, and a new excise tax on high premium health plans.
Pros and Cons of ObamaCare
The main objective of the ACA or Affordable Care Act is to make healthcare coverage plan available to all the people in USA so that people in the poor and middle class group can avail healthcare insurance plans under subsidized rate and in case of their inability to maintain medical insurance, they can get into Medicaid if their incomes fall under a defined level. A survey conducted by Commonwealth Fund came up with the finding that the percentage of uninsured young adults aged between 19-25 dropped from 48% to 41% between the years 2010-2012, going against the decade long trend of increasing uninsured rates in that age group prior to ObamaCare. This decline in the uninsured rates among young adults could be ascribed to ObamaCare which allows young adults the privilege of insurance through parents' health insurance plan. The survey also found that the percentage of uninsured and underinsured adults grew rapidly between 2003 and 2010 from 16 million to 29 million but after ObamaCare came into picture, this growth percentage has leveled off in last three years (Mahon, 2013).
ObamaCare will have different cost impacts on different people. On an average the estimated 'bronze' health care plan will cost between $4500-$5800. In 'bronze' plan 60% of the out of pocket will be covered. More expensive plans like 'silver'(70%), gold (80%) and platinum (90%) will cover more medical expenses providing a more comprehensive care. ObamaCare tries to extend the insurance horizon to the 30 million uninsured people and also extends the Medicaid services.
Most of the cost burden will be shouldered by the insurance companies and the employers liable to pay for the insurance of their employees. Users using Tan Beds are already burdened with a 10% tax hike. Wealthier Americans also will feel the impact as 3.8% surtax will be levied on high-earning people. This surtax will be charged if married couple filing together has income more than $250,000 or single filers reporting more than $200,000. High earning households will also earn Medicare tax spike by 0.9% on their earned income (Obama Care Facts). Pharmaceutical companies and insurance companies will also see a spike in government fees which will be implemented in a phased manner starting in 2012-2013.
The plan will provide 35% tax credit of the total health care cost to small businesses so that the cost of health plan is low for them. For very small companies with less than 10 employees a full tax credit will be provided. For individuals or families, the average health care cost is 20% of the total household income. It is projected that the average cost for the family will come down to around 7-8%.
Though the proponents believe that the quality of care will improve under ObamaCare because the law is making efforts to enhance the service of the existing healthcare facilities by recruiting more people in the healthcare workforce, funding 190 construction and refurbishment projects at health centers, supporting more than 485 new constructions and refurbishment projects of health centers and building 245 new health centers within next few years (Booze, 2013). The completion of these projects would result in providing service for at least 4 million people. But the opponents argue that the increasing number of insured patients will add to the difficulty in finding a doctor. The current state of doctor shortage will aggravate due to the negative view of doctors about ObamaCare. A survey results shows that 60% doctors believe that the pressure of reducing costs, improving quality and increasing volume will negatively impact the patient care while 43% physicians confess that they are contemplating the option of early retirement.
ObamaCare has some unintended consequences. The subsidized rate allowed to people making certain levels of income may give rise to the problem of losing about $5,000 if the income level of someone exceeds the respective cap even by a dollar. For example, if a couple is eligible for 3,452 worth subsidies to buy a silver insurance plan under the scheme of ObamaCare, they will lose the subsidy if they earn even $1 extra than the respective cap of their annual income level (Brophy, 2013).
Health Care Responses
Like the doctors, hospitals too are not taking a positive view on ObamaCare. A survey conducted by Commonwealth Fund finds out that 75% hospitals show no interest in forming ACOs or Accountable Care Organizations which are the unified networks of healthcare providers under ObamaCare meant to coordinate healthcare services for Medicare patients, control costs and remove waste (Pipes, 2012). ACOs are likely to burden the doctors and hospitals with significant amount of administrative work and financial risks and therefore, the doctors and hospitals are totally against it. As of now only 154 ACOs have been formed and that falls far below the expectation of Obama government.
In a recent study it was found that many of the uninsured people to whom the plan is mainly targeted at are unaware of the ObamaCare. However, many uninsured people do not know about the plan but those who know are optimistic and hopeful that they will at last get what they think is a basic need which was lacking. On the other hand many people who are currently insured don't feel the same way. They fear that the overall cost may not rise but the quality of service may decline after the implementation of the ObamaCare. Even some fear that they may lose the type of coverage they are getting from their employers and have to settle for an inferior health plan.
Many believe that ObamaCare will increase the cost for employers. However, employers are still committed to pay for its employees at least in the short term. At this point in time employers are not taking any action but waiting to see how the health care market shapes up in near future. Insurance companies are not the happiest lot. They feel that ObamaCare will make the insurance market inefficient and ultimately the overall cost will increase.
Conclusion
ObamaCare or the Affordable Care Act (ACA) is a plan meant to overhaul the current healthcare market in USA. The plan was designed and put in place by the Obama administration and ultimately was passed by the senate in 2012. The basic objective of the plan is to incorporate 30 million uninsured people of USA into insurance plans by providing affordable healthcare plans. ObamaCare ensures healthcare coverage for all the Americans by making it an affordable option. Though the healthcare cost may go up slightly for high income groups but the same for an average American will come down. Many perceive that after ACA is fully implemented the overall efficiency and quality of healthcare service will deteriorate. However, those are speculations and only will be understood as and when the plan is in full implementation phase. Overall the plan will do more benefit than harm to the society in the way of providing affordable healthcare.
References
Health Care Reform Timeline. Retrieved on 22nd August 2013 from <http://obamacarefacts.com/health-care-reform-timeline.php>
Key Features of the Affordable Care Act. U.S. Department of Health & Human Services (HHS). Retrieved on 22nd August 2013 from <http://www.hhs.gov/healthcare/facts/timeline/index.html>
Meckler, Laura (2009). $318 Billion Tax Hit Proposed. The Wall Street Journal. Retrieved on 22nd August 2013 from <http://online.wsj.com/article/SB123559630127675581.html>
Mahon, Mary (2013). New Health Insurance Survey: 84 Million People Were Uninsured for a Time or Underinsured in in 2012; Nearly Decade-Long Trend of Rising Uninsured Rates Among Young Adults Reversed. The Commonwealth Fund. Retrieved on 22nd August 2013 from <http://www.commonwealthfund.org/News/News-Releases/2013/Apr/New-Health-Insurance-Survey.aspx>
Brophy, Benjamin (2013). Unintended Consequences and Obamacare. American Spectator. Retrieved on 22nd August 2013 from <http://spectator.org/blog/2013/07/31/unintended-consequences-and-ob>
Booze, Alexandra (2013). Facts of ObamaCare: Inside Look at the Pros and Cons of the New Health Law. Retrieved on 22nd August 2013 from <http://www.policymic.com/articles/55015/facts-of-obamacare-inside-look-at-the-pros-and-cons-of-the-new-health-law>
Pipes, Sally (2012). Forget About Providers, What Do Doctors Think of Obamacare?. Forbes. Retrieved on 22nd August 2013 from <http://www.forbes.com/sites/sallypipes/2012/09/17/forget-about-providers-what-do-doctors-think-of-obamacare/>
Cost of ObamaCare: Obama Care Cost. Obama Care Facts. Retrieved on 22nd August 2013 from <http://obamacarefacts.com/costof-obamacare.php>
