Health care reform through the Patient Protection and Affordable Care Act

Health Care Reform Through the Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act ("PPACA") is one of the most controversial pieces of legislation in modern memory. This landmark legislation addresses the nation's long-dysfunctional health care system during one of the most challenging economic periods in the nation's history. The United States is one of the only industrialized nations in the world without universal access to health insurance. Domestically, this fact has been a source of great misery for many of the nation's poor or unemployed. Internationally, this fact has been a source of great embarrassment.

PPACA is meant to not only reduce the number of uninsured Americans, but also to correct a number of other deficiencies in the nation's healthcare system. The main component of the Act is its requirement that all Americans carry some form of health insurance and its accompanying extension of subsidies to those who cannot afford health insurance and who fall below a certain income threshold. (HR 3590 Summary) the Act will prohibit health insurance companies from excluding individuals based on pre-existing condition or any other types of discrimination based on health status. (HR 3590 Summary) it requires new plans to cover preventive services and immunizations without co-pays, deductibles, or other cost-sharing requirements. (HR 3590 Summary) Also, the Act will require certain plans to allow unmarried, childless adults up to their 26th birthday to remain on their parents' insurance policy. ( HR 3590 Summary)

Just as strong as the nation's desire for access to quality health insurance was the widespread alarm over recent government intervention and spending in response to the Great Recession of 2008. These sentiments have shaped the national debate over President Obama's health care bills. Proponents believe that the bill solves the nation's embarrassing and destructive preponderance of medically uninsured individuals. However, opponents of the bill have criticized it from as being too costly and bureaucratic. PPACA addresses the nation's enormous health care needs by correcting the most abusive practices of health insurance companies, offering a fiscally responsible health care framework, and incentivizing the preventative care in order to reduce healthcare costs down the road.

Points of Contention in Debate over PPACA

Opponents of PPACA seek to characterize the bill as giving handouts to the poor at the expense of hard-working, struggling American taxpayers. Their typical arguments are that the bill is costly for taxpayers and will trigger rate hikes in the insurance premiums of those who currently hold health insurance. The criticisms of PPACA appear to be motivated more by emotions than logic, which explains why they can be covered in three short paragraphs. Most criticisms of PPACA are based on faulty information. The few criticisms that are based on reliable information often make exaggerated claims well beyond what the evidence can reasonably support.

Total Public Cost of the New Health Care Framework

Critics of PPACA claim that the Act will not reduce the total public cost of healthcare. According to the Medicare institute, the Government will spend $400 Billion more on healthcare under the new PPACA framework than the current healthcare framework. ("The 2010-19 Impact of PPACA on Budget Balance").

$400 Billion is a significant sum in any event, but particularly burdensome in a time where the Federal Government is running record deficits.

Although it is true that the new healthcare framework will cost the government $400 Billion more than the current healthcare framework, the PPACA framework is superior to the old framework both because it implements new revenue streams that will cover the extra $400 Billion in outlays and because it reduces significant "hidden" costs at publicly-funded hospitals.

PPACA actually leaves a surplus of $150 Billion for the nation's budget. PPACA will actually increase government revenue by $550 Billion. ("The 2010-19 Impact of PPACA on Budget Balance") These new revenue streams come from taxes on luxury healthcare plans, annual fees on healthcare insurers, and excise taxes on medical devices. Thus, it is far more fiscally responsible than the current healthcare framework and provides a valuable cushion for cost overruns.

The public cost of healthcare is actually greater than the statistics indicate due to substantial "hidden" costs presented by uninsured patients. For many uninsured individuals, the cost of a clinic visit is prohibitive, while the cost of a short hospital stay is devastating. Because hospitals price their services with insurance companies in mind and not individuals, the average uninsured emergency room patient would struggle to pay the hospital bill for the cost of an overnight hospital stay. In fact, many fail to pay at all.

Not surprisingly, it is the hospitals that have to bear the cost of treating uninsured patients should those patients fail to pay. Because of the financial risks involved with treating an uninsured patient, hospitals often attempt to avoid this risk of non-payment by turning away uninsured patients or discharging the patient prematurely, a common practice known as "patient-dumping."

In 1986, Congress sought to prevent the problem of patient-dumping by enacting the Emergency Medical Treatment and Active Labor Act ("EMTALA"). EMTALA required federally-funded hospitals to sufficiently treat any individual who "comes to a hospital's emergency department" before discharging the patient. Hospitals which violated this Act were subject to government fines on top of any civil suits arising from the hospital's actions.

The regulatory framework imposed by laws such as EMTALA shifts the public cost of medical care from the clinic to the emergency room, where it is much more expensive. Publicly-funded hospitals are required by law to treat uninsured individuals while publicly-funded clinics are under no such obligation. Because of this disparity, it is actually easier for an uninsured individual to go to an emergency room for treatment than a medical clinic. Hospital emergency rooms have become the sources of first-line medical care for uninsured individuals who are ineligible for treatment at a standard medical clinic.

The stringent screening and stabilization obligations imposed by EMTALA produce considerable expenses for hospitals. The hospital has to receive the patient, screen the patient, and stabilize the patient before discharging the patient, which often entails expensive comprehensive checks of the patient and extended overnight stays. Furthermore, the medical conditions are often being treated for the first time, meaning the medical professionals have no relevant medical history to aid in their diagnosis, which increases the cost of "screening" the patient.

The extra burden suffered by hospitals as a result of EMTALA indirectly adds to the total public cost of our current healthcare framework. As it is technically the patient who owes the hospital for these services, hospitals cannot bill the government directly for these services. However, hospitals absorb the cost of treating uninsured patients in their worst possible circumstances and pass on these costs to the government by requesting more public funding to bridge budget shortfalls.

Other Arguments for PPACA

PPACA Improves the Quality of Health Insurance

PPACA's prohibition of abusive health insurance practices ultimately improves the quality of health insurance for all insured individuals. Currently, health insurance companies are allowed to engage in abusive and ultimately destructive business practices such as rejecting applicants based on their medical history and charging high deductibles for simple clinical check-ups and visits. Not only do these practices discourage preventative care and monitoring, they also diminish the quality of the good that insured individuals are buying from the health insurance companies. Insured individuals are paying for insurance and paying for most of their healthcare costs in addition because of the exorbitant deductibles. PPACA's prohibition of these practices ultimately forces health care companies to raise the bar and give health insurance customers more value for money.

Public-Private Partnerships Prevent Bureaucratization of Health Care

There are widespread misconceptions that the PPACA will provide health insurance through some government-run bureaucracy. Actually, PPACA is built on close cooperation between health insurance companies and the government. Under PPACA, the government does not operate hospitals nor does it provide medical insurance to individuals. Actually, it requires individuals to carry some form of private health insurance or suffer a penalty. The only time the government becomes involved is when an individual refuses to or is unable to obtain health insurance, after which the government will either fine the individual or subsidize the cost of health insurance for the individual (if individual meets income requirements).

Preventative Care

The most insidious effects of the current healthcare framework come not from hospital balance sheets but from patient medical records. Our current system discourages uninsured individuals from seeking preventative and early-stage care at medical clinics. Instead, it makes these individuals passive and helpless, guaranteeing them relief only when their condition has risen to the level of an emergency and often beyond the point of effective treatment. This is a healthcare framework designed to concede treatment only when it is too late and when it is most costly. It is no wonder that critics view the nation's healthcare needs as hopelessly expensive and burdensome.

A framework which allows individuals a choice on health care empowers these individuals to take charge of their health and also to take charge of their lives. The ability to visit your general physician for a check-up or for minor ailments without incurring a deductible will obviously uncover previously undetected health issues. The obvious savings in public cost is substantial, but the money saved through the individual adoption of a pro-active, preventative approach to healthcare is exponential.

Conclusion

Our healthcare system is not only broken, it is killing us. The business model of our health insurance industry is designed to discourage and delay medical visits for as long as possible. As a result, our medical conditions are developing faster than we can treat them. The only sustainable way to deal with our health problems is to prevent them. This cannot be accomplished by a healthcare system that denies universal healthcare, discouraging prevention-based and a pro-active approach to health maintenance.