Term Paper on "New Health Care Reform"

Term Paper 8 pages (2167 words) Sources: 2

[EXCERPT] . . . .

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.

Effect on Existing Health Insurance Premiums

Critics of PPACA claim that the Act will increase insurance premiums because health insurance companies will need some way to offset the costs incurred from new government obligations. They claim that the added cost to health insurers of onerous regulations like the They claim that because insurers are suddenly forced to cover clients' children until age 26, they have little choice but to raise premiums. So disruptive are PPACA's regulations, they say, that insurers have already started raising premiums, even though the Act has not gone into effect yet. ("Insurers Plan Rate Hikes on Health Law")

Also, they argue that PPACA's excise taxes and fees on medical devices and health insurance providers will also result in higher costs to customers. PPACA imposes a 2.3% excise tax on medical devices as well as annual fees on certain health insurance providers. They claim that "Common economic theory explains that the burden of any tax is likely to be shared between the supplier and consumer. A tax placed on suppliers (insurance companies and medical device companies) will likely be passed down on consumers (patients) in the form of higher premiums." (Heritage)

Contrary to what health insurance companies claim, health insurance premiums are not being increased because of the new obligations being placed on health insurance providers. ("Insurers Plan Rate Hikes on Health Law") Health insurance premiums have been rising for years. The goal of health insurance companies, like any other business, is to make profits. Health insurance premiums are not determined according to the actual costs brought by government regulations. If they were, then health insurance premiums would go down during times when the government repeals or fails to enforce certain regulations.

Rather, health insurance premiums are determined according to what health insurance companies believe consumers are willing to pay. The new health insurance bill merely gives health insurance companies a convenient excuse to raise premiums, deflecting attention away from the profit motive of health insurance companies.

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… READ MORE

How to Reference "New Health Care Reform" Term Paper in a Bibliography

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