Health Care Reforms 2010

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Introduction

President Obama signed into law his landmark health care bill, one of the most expansive social legislation enacted in history, arguing that it enshrines the central principle that every citizen in the United States should have access to some basic security in regards to health care. The president apparently signed the bill, the Patient Protection and Affordable Care Act to set in motion reforms that millions of Americans have struggled for, hungered to see, and marched for years. In 2010, the president continually expressed his concerns over the necessity of reforms in health insurance calling for the Congress to support the reform. Even after the bill was signed into law, the legislation remains controversial, with numerous states seeking for it to be overturned. Many voters are also against the legislation. The legislation covers a number of reforms in the health care system (Stolberg & Pear, 2010).

One of the reforms has to do with subsidizing insurance and expanding Medicaid. The legislature includes provisions related to health that are supposed to take effect over the coming years, including the expansion of the people eligible for Medicaid making up to 1333 percent of the FPL, subsidizing of premiums of insurance for the poor individuals so that their maximum payments for yearly premiums will be on sliding scale of up to 2 percent of their income, prohibiting denial of claims and coverage based on pre- existing conditions, providing incentives for businesses to benefit the healthcare system with funds, establishing exchanges of health insurance and providing support to research in medicine (Stolberg & Pear, 2010).

The 2010 health care reforms also addressed issues like community rating and guaranteed issue. As of 2014, the legislation will outlaw insurers from denying coverage to applicants who are sicker, or from imposing certain conditions like higher payments or premiums. Expenditures of health care are extremely laden with the most expensive 5 percent of the population making up half of the total spending in health care, while the bottom fifty percent of the spenders only account for three percent, implying that the gains of insurers from avoiding the sick highly outweigh any probable gain from managing their care (Woolhandler & Himmelstein, 1997).

As a result, insurers devoted funds to this avoidance at a direct cost to care management that is effective, which is against the interests of the people insured. Starting from 2014, the legislature will require individuals without health insurance to purchase health insurances approved by the government. Exchanges of government run may present data or information to enable comparison among competing insurers. This requirement is meant to limit the number of individuals without insurance to about 8 percent by 2016. The structure of this insurance premium allegedly shifts more costs to the healthier and younger people, hence the criticism and controversy (Johnson, 2010).

Efficacy of health insurance is also another area covered by the legislature. The act requires that all insurers should cover more costs, indicating that they make use of at least 80 percent of the premiums on quality improvement and medical care, and requiring full coverage for immunizations and screenings, and by outlawing annual and lifetime caps. As a result, a number of insurance schemes in the US have been indicated as inadequate. Other issues are related to the reduction of deficit. Reduction of the deficit is another critical force behind the reforms in healthcare. The legislation was estimated to reduce or cut the deficit by more than 143 billion dollars over the next ten years (Reid, 2010).

Elimination of overpayment in Medicare is also another advantage offered to individuals. Medicare Advantage plans are availed to people by private insurers, offer benefits to them above coverage in Medicare’s Parts A and B, and receive funding for covering these parts. However, unlike this form of coverage, the new legislature it was found out that these plans were overpaying these private insurers. The approximated costs of this overpayment came close to 12 billion dollars each year. The legislation is seeking to change this and remove any window for overpayment to private insurers (Reid, 2010).

This paper is a critical analysis of the 2010 health care reform legislation signed into law by President Obama. The paper will look at some of the institutional barriers interfering with the reforms, some solutions being offered to amend the legislation, the current status of the health policy arena and some of the recommendations the policy makers can assume in the future to improve the legislature.

Background and History

There are numerous provisions of the 2010 health care legislation that have to be met by the end of 2018. These are grouped into categories placed under the years they have to be enacted. For example, there are those provisions that have to be enacted by the end of 2011. Some of these include the following. Insurance companies are prohibited from eliminating people out of their coverage when they fall sick, thereby, ending the rescission practice. In addition to this, by 2011, all limits on lifetime coverage should be removed together with annual limits (Samuelson, 2009). The legislature also provides that young adults be covered by their parents’ cover until they reach the age of 26. Adults who are uninsured with pre- existing conditions are also allowed to obtain health coverage. The legislature requires that insurance companies not deny individuals insurance covers to children less than 19 years of age based on a pre- existing condition (Stolberg & Pear, 2010). These are just some examples of the provisions that insurance companies should meet by the end of 2011.

There are those provisions that are effective as from 2011. Tone is that Medicare provides ten percent as bonus payment to general surgeons and primary care physicians. The legislature requires Medicare to take full responsibility of services from personalized prevention plans for beneficiaries and annual wellness visits. Payments and funds towards insurers offering Medicare advantage are denied. There also those provisions those are to be effected as of 2012. For instance, reforms on payment for physicians are implemented in Medicare to improve central care services and motivate physicians to form organizations that are accountable for caring for individuals to improve efficiency and quality of health care (Reid, 2010).

As of 2013, a national pilot program is created for Medicare on bundling of payments to motivate hospitals, doctor and other providers of health care services to coordinate patient care better. The FICA or the federal insurance contributions act tax is raised from 1.45 percent to about 2.35 percent for those people making more than 200000 dollars and with couples making more than 250000 dollars. This tax is imposed on income from certain investments for the same income group. By 2014, state health coverage exchanges for small businesses and people open. People with income ranging more than 133 percent of the poverty level declared by the federal courts are eligible for the Medicare (Stolberg & Pear, 2010).

Premium caps for maximum payments made out of pocket may be present for those earning incomes more than 400 percent of federal poverty level. Effective 2015, Medicare develops a program for paying physicians aimed at rewarding quality health care rather than quantity of services. Effective of 2018, an excise tax is imposed on high cost plans provided by employers. These are some of the examples of the provisions the 2010 legislature provides for, which are to be imposed by the end of 2018. These provisions affect a number of entities from insurers to individuals to hospitals to doctors to families and couples (Samuelson, 2009).

Solutions currently being proposed with a Pro- Con Analysis

As we already saw in the starting paragraphs, the 2010 health care reform legislature has resulted to a lot of criticism and controversy, with the majority of states criticizing the bill and offering a number of solutions to improve the legislature. Just the same, the bill has also received significant support from a number of states, as well as voters, who remain adamant that the legislature is perfect for correcting the health care inadequacies and unfairness that has been present in the country for decades. One of the main areas of debate that has arose from passing of this bill concerns the effects the bill will have on government spending, taxes and jobs in the US. The supporters of the bill argue that the new law will guarantee millions of jobs for Americans, in addition to making possible for them to access quality and affordable care despite their health and social status. In addition to this, they also argue that the bill will help decrease levels of chronic diseases in US, control increasing spending in health and strengthen the nations damaged health infrastructure. They go on to point that health reforms, investing in them will help the nation achieve the promise previous, and current regimes have made to the people of a higher quality of life (Schweitzer, 2011).

On the other hand, the critics of the bill argue that the reforms depicted by the bill will increase taxes, spending and destroy jobs in the nation. They point out that one of the central concerns of the American people is the increasing costs of health care, and that what the Obama Care bill has done is increase them and not decrease the costs. They point out that the only reason republicans are repealing the legislature is because it will increase taxes, spending and destroy the workforce in the nation. They cited a report by a number of economists that indicated how the bill would increase costs and destroy jobs. They offer a different solution to this legislature by arguing that the congress should do better in replacing the 2010 reform bill with commonsense reforms that will decrease the health care costs and expand access to health care services for Americans (Schweitzer, 2011).

Another issue of conflict between these two camps is on the difference the new legislature is expected to bring in employment and the health care system. The supporters of the bill argue that those who are against the bill are driven by insurance industries who will affected the most by the reforms, and that the basis of their criticism is not lack of results but due to negativism driven by self- interested groups. The critics, on the other hand, point out that they feel that it would be beneficial to repeal the legislature if they are to promote growth of jobs and help restore fiscal balance of the federal government (Schweitzer, 2011).

To them, the legislature will only make matters worse for most Americans who remain unemployed facing a daunting budget. They believe that the bill will act as a threat to American businesses and that it will increase the debt burden of the country. It is their view that the patient protection and affordable care act does not contain real reforms in health care. They instead offer a solution that congress should begin with a clean paper sheet and assimilate initiative that will motivate providers to offer care that is of high quality at lower costs to patients, to reduce the pressures of cost that threaten to bankrupt Medicaid and medicate and give all Americans access to more coverage options (Schweitzer, 2011).

Consideration of Institutional Barriers

It is not just the critics who are a challenge for the survival of this bill. In addition, other challenges and considerations might make the survival of the bill difficult. American institutions are some of the most critical possible barriers for this law. An example of these institutions is the American Supreme Court that has the mandate to block or overturn any law if there is a basis for such an action. Upon the passing of the bill, a number of congressional representatives especially republicans, felt that the decisions made by Obama and his administration, especially on exchange were not constitutional. As it follows, they took the matter to the Supreme Court seeking to repeal the reforms (Millman, 2011).

For some individuals and states trying to repeal and obstruct the act in the Supreme Court, the thought of the intervention by the federal government is enough motivation to start planning for the exchange in case the lawsuit is not successful. In other cases, the consideration of the 2010 health reforms by the Supreme Court is reason enough for them to remain inactive and to paralyze numerous initiatives for health reforms in their states (Millman, 2011). As it follows, the Supreme Court and its possible ruling, which is expected in mid 2012, is one of the major barriers for the implementation of the health care reforms.

The Supreme Court is not the only institution posing a threat to the success of the health reforms; the federal government is also another eminent threat. The state of Kansas is cited to be contemplating to return around 31.5 million dollars to the federal government. The funds were supposed to be used in the state in setting up exchanges of health insurance. The main reason for this return, according to the officials, was the fact that there were doubts concerning the ability of the federal government to pay for the grants in the future. As the officials pointed out, there is considerable uncertainty that the federal government might not be able to meet its already budgeted spending obligations in the future. Kansa is not the only state to turn away from these funding, Oklahoma also refused the same grant in April (McCarthy, 2011). If what these two states are speculating is true, about the incapacity of the government to fund the reforms, then the US will have a problem because the nation is depending on the federal government for financial support to implement most of the reforms in health care. As it follows, the federal government is also another potential barrier to the reforms in health care.

State- based insurance exchanges are other institutions that might act as a barrier for the health care reforms because. According to a number of observers, they are marred with politics. Some republican leaders threaten to refuse to establish exchanges unless the government provides them with more flexibility concerning Medicaid. Lawmakers in several other states implied that they were not inclined to implementing any part of the health law. Other states, however, like Colorado, California and Maryland have come up with legislation to create exchanges. Others are still holding discussions on the issue. If well implemented, proponents assert that exchanges can make it easier for people to buy coverage and maybe even lead to reduced costs because of the increase in competition. However, as experts warn, if poorly implemented, healthy people could be inclined to avoid exchanges, abandoning them to sick people (Appleby, 2011). As it follows, exchanges are other institutions that can affect the implementation of reforms.

Current Status in the Health Policy Arena

It is clear from all conflicts that the health reform bill is not faring well in the health policy arena, mainly because of the limitations it imposes on policymakers, insurers and other interested parties. The bill has come under numerous threats from those individuals who think that the reforms were unconstitutional citing acts in the constitution that do not require the government to impose such stringent reforms on individuals and policies. However, despite these criticisms and opposing groups, the bill has also received considerable support from numerous groups.

Future Policy Alternatives

Though one can come up with a number of alternatives for future developments in the health care reforms, the extent to which these alternatives can go depends only on the successes and failures of the current policy in the coming years, assuming that we will witness a lot of them. However, it is possible that it will be challenging to assess all of these successes and failures before the end of 2014assuming that the Supreme Court does not rule the individual mandate unconstitutional. Additionally, some states such as Vermont have already assumed other alternatives such as the single payer option. This health system will move most of the residents of the state in an insurance program that is financed by the public, and pay doctors, hospitals and other care providers a certain fee to care for the patients. This new alternative will replace the traditional plans of insurance covers currently in use in the state and the traditional reimbursements based on fee for service, providing the state with a different system (Marcy, 2011). Other states can also consider adopting the same alternative to the 2010 health care reforms.

Conclusion

The 2010 health care reforms signed into law by the Obama administration has been the source of numerous debates between numerous republican and democratic states. The both groups give varying reasons as to why the reforms are suitable or unsuitable, with the main differences arising from differing views on the effects of the reforms on the cost of health care, employment and spending. Though the reasoning of both groups could have some essential truth and basis, it is critical that the successes and failures of the reforms be assessed first before voting for against the repealing of the reforms. There are also alternatives to these reforms that states can assimilate to avail cheaper and quality health services to all Americans. The verdict on which direction to take should, however be determined by how the reforms fair or fail in achieving the intended goals.

References

Appleby, J. (2011). A guide to health insurance exchanges. Kaiser Health News. Retrieved from http://www.kaiserhealthnews.org/Stories/2011/March/30/exchange-faq.aspx

Johnson, K. (2010). Health premiums may rise 17% for young adults buying own insurance. USA Today.

Marcy, J. (2011). Vermont edges toward single payer health care. Kaiser Health News. Retrieved from http://www.kaiserhealthnews.org/Stories/2011/October/02/Vermont-single-payer-health-care.aspx

McCarthy, M. (2011). Brownback: Kansas to return $31.5 million health exchange grant.National Journal Member. Retrieved from http://www.nationaljournal.com/healthcare/brownback-kansas-to-return-31-5-million-health-exchange-grant-20110809

Millman, J. (2011). States squirm over health exchanges. Politico. Retrieved from http://www.politico.com/news/stories/1111/69253.html

Reid, T.R. (2009). The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care. New York: Penguin Books.

Samuelson, R. (2009). Robert J. Samuelson on the health bill’s burdens for the young. The Washington Post.

Schweitzer, J. (2011). Are the March 2010 federal health care reforms laws good for AmericaProCon.org. Retrieved from http://healthcarereform.procon.org/view.answers.php?questionID=001526

Stolberg, S. & Pear, R. (2010). Obama signs health care overhaul bill, with a flourish. The New York Times.

Woolhandler, S. & Himmelstein, U. (1997). Costs of care and administration at for-profit and other hospitals in the United States. The New England Journal of Medicine 336 (11): 769–74.