Patient Protection and Affordable Care Act

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Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (PPACA) signed into law by president Obama on March 23, 2010 is arguably the most extensive reform of health care law ever to be enacted in the U.S. It will impact the way professionals practice health care, the way insurance companies handle health care as a product, and the way consumers purchase and use health care as a service. The Affordable Health Care Act is primarily aimed at reducing the number of uninsured Americans and reducing the overall costs of health care from an administrative and consumer standpoint. The PPACA requires insurance companies to cover all applicants and offer the same rates to all applicants of the same age regardless of pre-existing conditions, gender or any other intrinsic factors that may deem an individual a particularly “risky” investment for an insurance company. According to the U.S. Census Bureau, in 2009, there were 50.7 million Americans living without health insurance; that amounts to 16.7% of the population (DeNavas-Walt et al.). In order to increase the rate of coverage, the PPACA provides mandates, subsidies, and tax credits to employers and individuals. Since individuals will not be discriminated against on the basis of their health, insurance companies will have larger pools of individuals to cover and the price of insurance will decrease based on the idea that the collective or average risk of any given group of individuals will, theoretically speaking, be less risky than the highest-risk individuals in that group. Because consumers will not be judged on their individual health, the insurance companies, instead, will have to compete for consumer attention and theoretically speaking, market prices of insurance will fall further due to the increased competition between companies (HealthCare.gov). In addition, there will be a mandate in place which will require all individuals not covered by their employer, Medicare, or...
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