Patient Protection and Affordable Care Act (PPACA) better known as Obamacare is a federal statute that was signed into law in early 2010. Under this Act health institutions as well as physicians would change their clinical, technological and financial practices to improve health outcomes, lower healthcare costs and ensure accessibility to health services. The act is aimed at increasing affordability and quality of health insurance, lowering the uninsured rate and reducing healthcare costs to both the government and individuals through the expansion of private and public insurance. However, it is impossible to support the scheme unless the underlying challenges are resolved. For example, maintaining its marketplace competitiveness, reaching people who are uninsured, getting more affluent enrollees as well education of all the enrollees on the out-of-pockets costs that they are expected to incur.
On the issue of ensuring that Obamacare marketplace is competitive, it is reported that by last year October about 11 Obamacare startups that were funded by the taxpayers had been closed due to financial constraints. The many cooperatives started to bring competition failed to pick up because of the financial challenges. Also, it is uncertain whether the insurers will continue to remain in the marketplace and yet robust competition is the only way that enrollees can enjoy low premiums. Already about fourteen states have announced that at least one carriers will leave Obamacare marketplace. Aetna, one of the giant insurance companies, says that it will not sell Obamacare in three states including Washington (Atlas, 2010). With such withdrawals, it means that in future insurers will have limited options to choose from. The administration should try to create a favorable business environment for other public and private insurance to operate. The startups such as the cooperatives should be fully supported through sufficient budgetary allocation.
The enrollment growth has been a challenge due to difficulty in finding the uninsured. The administration should address this by expending the eligibility criteria and offering tax relieve to those who subscribe to increase uptake because a majority of the uninsured are people who earns a low income. The majority of the enrollees do not know the amount they will spend on out of pocket thus making it uncertain. The administration should address this issue by ensuring that enrollees are well educated even before they subscribe so that they can understand the cost implications well in advance (Miller, 2013).
The fact that healthcare expenditure has been low for the past decade is good new, but it is uncertain that this expenditure will eventually exceed income growth. Obamacare plan is forcing the citizens to be on the unsustainable path because they cannot choose other cost sharing and smaller packages. Also, the global budget is likely to introduce new challenges to the ordinary citizens. The law limits total growth in Medicare expenditure, federal tax subsidies and Medicaid hospital spending as compared to the Gross Domestic Product. Therefore, as the healthcare costs burden the families, there will be less support from the government because the overall aim of the global budget is to reduce expenditure. To address this, the administration should set up a defined tax subsidy to support each family (Atlas, 2010).
Through Obamacare, a family at 138% poverty level can enroll Medicaid in more than half of the states and access insurance worth about $8,000. Hotel employees earning almost similar amount are forced to subscribe to a more expensive family insurance plan without support from the government. However, the greater challenge is not just the unfairness but the impact of differential subsidies on the economy. People will realize that those who earn less than average get a better deal from the government on Medicaid while those who earn more than average enjoys good deals if the insurance is provided at the workplace. This will then prompt employees to change radically their benefits or restructure the organization of the whole firm. It will discourage business growth whereby small businesses prefer to remain small. The employers, on the other hand, will refer hiring employees on contract and part-time basis to reduce expenditure on insurance plans. The whole perversion comes from a common source; differential treatment of employees who are earning the same income because of their insurance plans, the number of colleagues they work with and the number of working hours. Here there is a straightforward solution, the subsidy for health insurance should be made equal regardless of people’s insurance plans (Roberts, 2013). The government should allow people use their tax credit to buy Medicaid, and those already on Medicaid should be allowed to claim a tax credit if they wish to leave so that they can buy private insurance.
Since its introduction Affordable Care Act (ACA) has had several impacts on the health insurance industry. Regarding policy, the act is a total overhaul of the healthcare regulatory system. It has reduced the number of uninsured tremendously through two mechanisms; expansion of Medicaid eligibility to cover people within 138% poverty level and creation of insurance exchanges in every state (Roberts, 2013). It has also set new standards for the insurance with some stated in the law, for example, banning policy drops of holders who fall sick. Other effects include coverage of preventive care by insurance policies, reduction in insurance premiums and healthcare costs.
References
Atlas, S. W. (2010). Reforming America's health care system: The flawed vision of Obamacare. Stanford, CA: Hoover Institution Press.
Miller, J. (2013). Obamacare. Post Hill Press.
Roberts, L. (2013). Obamacare. Cork: BookBaby.
