The Patient Protection and Affordable Care Act was passed by the United States Congress on March 23, 2010 (Public Law 111-148). This act is commonly referred to as the Affordable Care Act, ACA, or Obamacare. The law is broken down into ten titles; each addressing a different area of our healthcare system. This reform of healthcare law had 3 primary goals which include making affordable healthcare available to more people (Title I), expanding the Medicaid program to cover adults whose income falls below 138% of the federal poverty level (Title II), and to support healthcare models that will reduce spending (Title III).
The Act makes healthcare more affordable for all by offering subsidies to those whose income falls between 100% and 400% of the federal poverty level. The federal poverty level is an income measure determined by the Department of Health and Human Services that is used to determine eligibility for certain programs. This level is used to offer discounts and savings on insurance plans purchased through the Marketplace. The Marketplace is a government website, Healthcare.gov, used to enroll in the many health insurance plans offered by commercial insurance companies. Also included in Title I are new guidelines that address ending denial of coverage due to pre-existing conditions, the ability of children to stay on their parents plan until the age of 26 regardless if they are dependent based on tax purposes, and a mandate to provide preventive services at no cost to the patient. Insurance coverage is made mandatory by the ACA and incurs a tax fine for those who remain un-enrolled.
With the original passing of the Affordable Care Act, states were required to expand their Medicaid program. Many states felt this requirement unfair and sued the federal government. In a Supreme Court ruling in 2011, it was determined that states would not be required to accept the expansion but would be optional by state. Prior to the Act, Medicaid was only required to cover children, parents with dependent children, pregnant women, persons with disabilities, and those over 65 who qualified. They were not required to cover childless, low income, non-disabled adults. In its previous state, the Medicaid eligibility cutoff for working parents was 61% of the federal poverty level while children were eligible at 100% of the federal poverty level. For residents of states that have expanded their Medicaid program, participants are now eligible if their income is up to 138% of the federal poverty level including childless, low income, non-disabled adults. In states that chose not to expand their Medicaid program, the number of uninsured adults continues to remain high. Some of these adults remain ineligible for savings on the Marketplace as well due to the original intent of the Act for participants under 100% of the federal poverty level to be covered by their states expanded Medicaid plan.
Title III addresses changes in how healthcare will be delivered. Traditionally, healthcare providers have operated on a fee for service system. In this system, all services are billed and paid separately. This includes encounters with a provider, lab tests, radiological exams, and more. This can lead to excessive billing as it encourages quantity of care over quality of care. Changes under the Affordable Care Act accelerated healthcare provider efforts to move away from this volume based system and toward a system that pays providers based on the quality of the care they provide. One example of this is the effort to reduce hospital re-admissions for Medicare patients within 30 days of discharge. This has prompted many hospitals to create programs that more closely follow patients with specific disease states and procedures such as heart failure, COPD, acute myocardial infarctions, pneumonia, coronary artery bypass surgery, and total hip or knee arthroplasty. This higher, more specialized level of follow-up care has reduced hospital re-admissions by 1% which equals over 150,000 re-admissions (Hamel, Blumenthal, Abrams, & Nuzum, 2015). Another incentive relates to a possible 1% reduction of payments to hospitals with high levels of hospital acquired conditions. This can include avoidable post-surgical infections, pressure ulcers, falls, and adverse medication events. The Department of Health and Human Services reported a 17% decrease in these conditions from 2010 to 2013 and estimates this reduction has prevented over 50,000 deaths and saved $12 billion in healthcare spending (Blumenthal et al., 2015).
Title IX of the Affordable Care Act imposes a 40% excise tax on employer sponsored insurance plans if the premium is higher than $10,800 per year for an individual or $29,500 per year for a family. This excise tax was originally set to take effect in 2018, but in December 2015 a new law delayed the start until January 1, 2020. In January 2018, the tax was delayed again, pushing the start of this tax out to 2022. In their article, Gabel, Pickreign, McDevitt, and Briggs (2010) argue that this tax could be an attempt to help fund expansion of healthcare reform. Historically, premiums paid by employers were tax exempt. This promoted employers to offer higher cost plans as part of an overall employment package. This was attractive to potential employees and reduced employer tax spending. In addition, they contend that some see this tax as an attempt at cost savings. This looming tax change has prompted many employers to move toward plans with less expensive premiums. These plans typically involve high deductibles and higher out-of-pocket maximums for employees.
The Affordable Care Act has led to many improvements in healthcare. More Americans than ever are covered by health insurance because it has been made affordable for them. These people are now seeking care not only for existing problems but for preventive services. On the flip side, people covered under employer sponsored plans will see an increase in personal medical spending due to higher deductibles and out-of-pocket maximums. Regardless of the increase in spending, those people still have health insurance coverage which affords them the ability to seek healthcare. With the changes in how healthcare providers are paid, the care patients receive is now driven by quality, not quantity. With these changes, people have the opportunity to be healthier than ever before.
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