President Obama's Health Care Plan Term Paper

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President Obama's Health Care Plan

The objective of this study is to conduct an analysis of President Obama's proposed health care reform plan. Included in the analysis will be a description of the major features of the proposed health care reform plan and how the plan will be funded. Also included will be an objective analysis of the pros and cons of the proposed plan in relation to the factors as follows: (1) The degree to which the plan will increase access to health care for various segments of the population; (2) The extent to which the proposed plan will affect cost relative to the consumer, the taxpayer, the insurance companies, government, and other payers; (3) The impact of the plan on the quality of care delivered; and (4) Unintended consequences (e.g. health care rationing). Included in the analysis will be the potential response of the stakeholders including healthcare providers, health care consumers, both insured and uninsured as well as current health care payers.

I. Healthcare Reform Plan Funding

Health care law is reported to include "an estimated $105 billion in mandatory spending." (Congressional Research Service & Congressional Budget Office, 2013) Mandatory spending is reported to be under the control of laws other than the annual appropriations acts. A reported $15 billion is allocated to a prevention and public health fund and $10 billion is allocated to Medicare and Medicaid innovation programs. Finally, $9.5 billion is earmarked for the Community Health Centers Fund. Taxpayers will bear the totality of the burden as shown in the following chart by annual income.

Figure 1

Health Care Plan Funding By Taxpayer Income Bracket

$0 - $14,999

0.2

$15,000 - $29,000

1.8%

$30,000 - $49,000

5.5%

$50,000 - $99,000

18.1%

$100,000 -0$199,000

22.7%

$200,000 - $249,000

5.6%

$250,000 and above

46.0%

Source: Congressional Research Service & Congressional Budget Office (2013)

According to one report Romney previously stated that Obamacare would result in the adding of "… trillions to our deficits and to our national debt, and pushes those obligations onto coming generations." (Woodward and Alonso-Zaldivar, 2012, p. 1) However, the report counters Romney's statement and reports: "In its most recent complete estimate, in March 2011, the Congressional Budget Office said the new health care law would actually reduce the federal budget deficit by $210 billion over the next 10 years. In the following decade, the law would continue to reduce deficits by about one-half of one percent of the nation's gross domestic product, the office said. The congressional budget scorekeepers acknowledged their projections are "quite uncertain" because of the complexity of the issue and the assumptions involved, which include the assumption that all aspects of the law are implemented as written. But the CBO assessment offers no backup for Romney's claim that the law "adds trillions to our deficits." (Woodward and Alonso-Zaldivar, 2012, p. 1)

There is reported to be a 10% tax on tanning beds as part of the new health care law. Children under the age of 26 are able to remain on their parents health care insurance under the new law. It is also reported that the law places penalties on employers who fail to make provision of health insurance and that this might result in some companies hiring fewer low-wage workers or alternatively hiring more part-time workers rather than full-time employees. (Woodward and Alonso-Zaldivar, 2012, paraphrased)

II. Pros and Cons to Health Care Plan Reform

The cons of the health care reform plan includes that individuals who like the insurance plan they currently have may not be able to keep them since employers are reported to "have the right to modify coverage or even drop it, and some are expected to do so as more insurance alternatives become available to the population under the law." (Woodward and Alonso-Zaldivar, 2012, p.1) In addition, there is not a guarantee that coverage will be cheaper even when calculating the subsidies people receive. Employer coverage might decline by 3 to 5 million but is stated to be such that could reach up to 20 million.

III. Increase of Access to Healthcare for Various Segments of Population

Christensen (2013) writes that Obamacare will result in an increase in the demand of patients for medical services. There are reported to be an approximate 48 million individuals in the United States are presently uninsured. However, when the mandatory insurances rules in Obamacare take effect in addition to approximately 24 states expanding eligibility on Medicaid, there will be so many people trying to access the health care system that doctors will be in a shortage for covering the demand for services. Christensen (2013) reports that a study conducted and reported in the Annals of Family Medicine journal predicts there will be a need for approximately 52,000 more primary care physicians by 2025. It is reported that Obamacare can be likened to providing "everyone an ATM card in a town where there are no ATM machines. The coming storm of patients means when they can't get in to see a primary care physician" the emergency room will be the next choice. (Christensen, 2012, p.1)

IV. Cost to Consumer, Insurance Companies, Government and Other Payers

It is reported by Forbes that Obamacare will result in many families "paying more for their healthcare than they were before the law went into effect. The cost increase is not some trivial amount but is estimated to run an average family of four between $650 and $1,000 per year over the next decade." (Dorfman, 2013, p. 1) These estimates are reported to come from the Centers for Medicare and Medicaid Services and it is reported that these estimates are in actuality "…the government's own estimates of what is going to happen under Obamacare. These cost increases are for total health care spending, Dividing by population and then multiplying by four yields the average impact on a family." (Dorfman, 2013, p.1)

In addition, it is related that the effect of the increases in health care costs "will fall unevenly on people. Some of these costs will show up in the form of higher health insurance premiums, while other parts of the costs will appear in the form of income taxes, medical device taxes, and future interest payments on debt incurred to cover the costs paid for with additional government debt. Thus, not every family will see their insurance premium rise by the estimated amounts and not every family will pay higher taxes equal to their proportional share of the higher costs." (Dorfman, 2013, p. 1)

There is reported to be an additional problem in that the subsidies provided by Obamacare are not fair and stated is "If an employer offers its workers health insurance, but an employee turns it down because the cost is too high, that worker is not eligible for a government subsidy in the health care exchanges. Thus, two families with the same income could pay very different rates for their health insurance because one was offered insurance at their job and the other was not." (Christensen, 2013, p.1) Furthermore, the subsidies phase out is stated to be "quite abrupt" since the subsidy amount is reduced with income and just ends at the top of the income scale. For families that fall below 400% of the poverty level subsidies are available and for a family of four that amount is approximately $88,000. This relates to a family of four that earns just under the limit being on the receiving end of about $5,000 in a subsidy amount which is based on "paying 9.5% of their income toward health insurance" however, should the family earn too much they will not receive a subsidy meaning that if the family receives only a small raise in their income they would be losing in the long run. (Christensen, 2013, p.1)

The estimated annual worker contribution to insurance premiums in Obamacare's silver plan, include the tax subsidy are reported to be the amounts based on income as shown in the following table labeled Figure 2 in this study.

Figure 2

Source: Ritger (2013)

It is reported that findings from a Kaiser study states that "the drop off in employer coverage paralleled an increase in premiums, which rose 80% for families and 73% for singles in the last 10 years." (Ritger, 2013, p.1)

V. Impact of Plan on Quality of Care Delivered

Christensen (2013) reports that an additional problem with Obamacare is that quality of care will be affected on the exchanges ad specifically it is stated that those who purchase health insurance on the exchange in some states will be offered access to a limited few doctors and hospitals that are included in the privately purchased and employer sponsored plans. What this means is that individuals may not have coverage that enables them to see the doctor that they want to see since restrictions exist due to insurance companies desiring to provide policies through the exchanges at the lowest costs possible based upon the assumption that "people shopping for insurance in the exchanges will be…[continue]

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