The Affordable Care Act works on the premise that all Americans should have access to health care insurance. Because this is provided through insurance companies, the system is only enforceable under certain conditions. One of the key tenets of health care reform is the idea that those with pre-existing conditions cannot be denied insurance coverage. This group of people has long had problems getting insurance, and insurance companies spend tens of millions to invent pre-existing conditions that would then be used to deny coverage. Even insurance commissioners have been known to take offensive and absurd stances on pre-existing conditions, arguing that insurance companies should not have to take customers with such conditions because the person is to blame for their pre-existing condition (Ferguson, 2013). With attitudes like this from people connected to the insurance industry, the only way that the Obama Administration was going to achieve universal health care coverage is if forced the insurance companies to take patients with alleged pre-existing conditions.
The problem with forcing insurance companies to take on people with pre-existing conditions is that in many cases such individuals require subsequent treatment, and they are therefore much more expensive in terms of the cost of their care. This is why Republicans proposed the individual mandate for two decades as part of their health reform strategies. The individual mandate allows insurance companies to gain profits from insuring healthy individuals in order to make up for having to take on individuals who are going to be more expensive to cover (Klein, 2012).
How it works is this. The people most likely to buy insurance are the most likely to need it. Thus, those who are older and who have pre-existing conditions are more likely to buy insurance if there is a mandate on the insurance companies to sell insurance to people regardless of pre-existing conditions. Younger people, who are more likely to be healthy, are unlikely to buy health care insurance because it is not cost effective for them to do so. If the most profitable customers -- the young and healthy -- do not buy insurance but only the least profitable customers -- the old and those with pre-existing conditions -- do buy, then insurance companies will either go out of business or will have to charge exorbitant rates. None of that will help with obtaining universal health coverage.
The individual mandate exists to solve this problem. The individual mandate forces younger people to purchase health insurance. As a result, all of the most profitable customers for insurance are compelled to buy. As a consequence, insurance companies will gain profit from said mandate, and these gains will help to offset the poor economic performance that will result from having to insure those with pre-existing conditions. Thus, the individual mandate is critical to the success of the health care law.
With the individual mandate, consumers are forced to buy, which takes the government closer to its objective of having universal coverage. Everybody has to buy. There is a lot of room for profitable customers in the business, so the insurance companies can afford to insure the no-so-profitable customers as well. Thus, the individual mandate restores economic balance to the Affordable Care Act in a way that takes the government close to its objective of getting everybody some form of health care coverage. Insurance companies get more customers, earn fewer margins on those customers, and as a result they are able to continue with their business. The result is a balanced plan, essentially reducing the wealth on young generations in favor of older ones. This may not be a fair tradeoff but apparently it is better than having insurance company profits decline.
People over the age of 65 are only somewhat affected by the changes to the health care system under the Affordable Care Act, and primarily this is because people over 65 are covered under Medicare. Thus, the ACA affects them mainly to the extent that it affects Medicare.
The American Association of Retired People (AARP, 2013) outlines some of the changes that will affect the over 65 demographic. That organization notes that Medicare benefits are protected with the new law.
In addition, the Affordable Care Act has elements that affect the Medicare Part D. Basically, there was a loophole in the original law regarding this, something that became known as the...
The Affordable Care Act closes plugs this doughnut hole, giving seniors a 50% discount on brand name prescription drugs and more than a 20% discount on generic drugs while in the coverage gap. These discounts will continue to grow until 2020, at which point the coverage gap will cease to exist. So the Affordable Care Act has the net effect of reducing prescription drug costs for many seniors.
AARP also notes that there are a few other elements of the Affordable Care Act that are beneficial for seniors. Medicare was strengthened so that yearly wellness visits and more preventative care are covered. So the coverage has been extended to cover cancer, cholesterol and diabetes screening, immunizations, diet counseling and more (AARP, 2013).
In addition, more resources are added to the Medicare program in order to catch those who defraud Medicare. Ultimately, fraud costs the Medicare program and make it less efficient, so the ACA has allocated additional funding in order to enhance fraud detection and prevention, with the objective of lower the amount of Medicare funds that are wasted on fraud each year.
Theoretically, a senior with a child under the age of 25 would be in an interesting person, since the child would qualify under the parent's plan, but this does not usually apply to Medicare. That situation would perhaps create an interesting situation but normally it is expected that the senior would just take the Medicare and the child would have to fend for himself/herself on the insurance exchanges.
Other than these slight changes to Medicare, the Affordable Care Act does not really affect the over 65 demographic. The Act was not designed to affect this demographic and is strictly relating to the provision of health care for the younger people. Once someone reaches the age of 65, he or she is on Medicare, which is a completely different program and exists outside of the insurance system that is at the heart of the Affordable Care Act. The Act was simply an opportunity to make a few changes to Medicare as part of a sweeping health care reform. The Act simply shored up a couple of things with respect to Medicare but was not a Medicare law and therefore does not have all that big an impact to Medicare.
The question of whether the Affordable Care Act improves health care coverage I suppose must be answered by defining improvement. In terms of how many Americans are covered, there is little doubt that the ACA is going to dramatically increase the number of Americans who are covered with health insurance. The individual mandate aloe will compel millions into the system who might otherwise sit out, and of course as the law allows for those with pre-existing conditions to get health care, it will expand health care to that group as well.
Part of "improvement" is also in the quality of the coverage. This is where the recent issues about people having their plans dropped comes into play. Essentially, the ACA has a number of different types of plans, based on minimum coverage stipulations. A legal plan under the ACA is often more comprehensive that the plans that were in existence prior to the ACA. A lot of people were upset that their cheaper plan was dropped and that they would have to take on a more comprehensive, and therefore expensive, plan. This is an interesting situation and scenario, because technically, this represents improved coverage.
People now are going to be covered, on average, for more things and in many cases might have lower copays or deductibles as well. So the way that the Affordable Care Act forces people to take on plans that contain more coverage, and in how it forces more people to have insurance, takes us much closer to having universal health care and indeed the result is that there is better coverage as the result of the Act both in terms of the number of Americans who are covered and the level of comprehensiveness of that coverage.
That said, there is no quite yet universal coverage. There have been instances in the past where states like Washington have pursued some form of universal health coverage and what we see is that with a system like the ACA there are going to be gaps in that coverage (Kliff, 2012). It is important to know that there are many people not eligible, such as convicts, illegal immigrants and other groups, such that not every American is going to have universal health coverage. However, the coverage is…
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