The Affordable Care Act (ACA) introduced by President Obama in 2010 remains one of the most controversial bills in US history. It was widely criticized for the last seven years since its introduction, but at the same time, a good portion of American society vehemently opposes its repeal. The achievements and flaws of the ACA are widely known – the supporters of the bill state that it helped provide healthcare coverage to more than 20 million low-income Americans (Blumenthal, Abrams, & Nuzum, 2015).
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At the same time, the opponents of the bill claim that ACA is to blame for the costs increase of the insurance coverage and the inflation of the healthcare budget. As it stands, the USA spends over 3 trillion dollars on subsidizing healthcare, while the quality and availability of care itself remain suboptimal (Gostin, Hyman, & Jacobson, 2017). The purpose of this paper is to review the ACA through the lens of health organization and financing and summarize the proposed changes under the current administration.
The Affordable Care Act introduced several mechanisms into healthcare financial and organizational structure. The most important mechanism is the one government reimbursement of insurance companies for offering insurance to various groups of citizens that are otherwise unable to afford healthcare insurance (Rak & Coffin, 2013). The government program called Medicaid encompasses individuals based on various social determinants, such as age, marital status, income, assets, and the presence of long-term disabilities. Medicaid is the program that provided healthcare coverage to over 20 million low-income Americans.
It is also one of the reasons for healthcare insurance price growth. Reimbursement provided by the government, while substantial, was not enough to cover the needs of 20 million Americans. In addition, Medicaid forcing insurance companies to provide coverage for Americans with long-term disabilities significantly increased the risks of potential monetary loss. The resulting price growth was a forced measure, as otherwise, many insurance companies would go into deficit rather than profit. In addition, the introduction of ACA was followed by an increase in the number of treatments rather than in their quality. Overmedication and overtreatment cost additional expenses for the people and the government (Blumenthal et al., 2015).
In order to contain price growths, the ACA initiated the Accountable Care Organization initiative. In theory, it was supposed to help save money by having hospitals and voluntary organizations comprised of individual specialists provide quality healthcare and receiving government reimbursement for increasing quality of care (Rak & Coffin, 2013). However, this initiative also spurred hospital mergers and consolidation. Instead of a competitive environment that was supposed to reduce prices, the competition was lessened.
Over the course of 2013-2014, over 250 large hospitals merged together in order to improve their competitive chances (Rak & Coffin, 2013). As a result, the inter-hospital competition went down because there were fewer hospitals now.
The Republican Party was in long-standing opposition to the Affordable Care Act, which was largely a Democratic initiative (Gostin et al., 2017). They criticized it as inefficient from a financial and organizational standpoint, saying that from the perspective of healthcare economics, ACA did not provide results adequate to the amount of government money being injected into the system. During President Trump’s election campaign of 2017, one of his electoral promises was to repeal the Affordable Care Act and find a way to reduce government spending on healthcare as well as the prices for medical coverage.
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According to the Republican rhetoric, the burden of carrying the ever-growing costs of healthcare under ACA was carried by the middle-class families, which were not rich enough for insurance to stop being a burden, but not poor enough to receive the reimbursement (Gostin et al., 2017).
However, as it stands, the process of repealing ACA was fought to a standstill. The current political administration is trying to reduce healthcare spending by cutting reimbursement provided to insurance companies for offering deductions to the poor. As a result, the prices for premium healthcare insurance packages are expected to go even higher. According to Gostin et al. (2017), prices are estimated to go up by about 18% by the end of the year.
Insurance companies that do not increase their prices for platinum, gold, silver, and bronze premium packages are expected to go into deficit by the end of the year. Other measures proposed by the current administration include enforcing job requirements on Medicaid recipients, which has the potential in reducing it by half, as around 48% of Medicaid recipients are children and adolescents, and another 10% are the elderly (Gostin et al., 2017). Lastly, the Tax Cuts and Jobs Act of 2017 repeals ACA tax from people who would refuse to buy insurance. As a result, health insurance prices are expected to go up again, as young and healthy people would have an incentive not to buy premiums (Gostin et al., 2017).
It seems that no matter what the government does, insurance prices are expected to go up, whether because of extra loads and risks imposed by the government or a lack of reimbursement and healthy customers. However, the healthcare system’s primary concern should always be the needs of the patients. Without ACA support, over 20 million people would lose their health coverage again. These people need healthcare the most. If taxpayer money is not spent to ensure the health and stability of the nation, what else to spend it on?
Blumenthal, D., Abrams, M., & Nuzum, R. (2015). The affordable care act at five years. The New England Journal of Medicine, 372, 2451-2458.
Gostin, L. O., Hyman, D. A., & Jacobson, P. D. (2017). The affordable care act: Moving forward in the coming years. JAMA, 317(1), 19-20.
Rak, S., & Coffin, J. (2013). Affordable care act. The Journal of Medical Practice Management, 28(5), 317-319.