Why is Healthcare in America in Turmoil?
On March 2010, the Patient Protection and Affordable Care Act was signed into law by President Obama, this law would change the landscape of healthcare in America. The primary focus for the Affordable Care Act was to bring millions of Americans affordable healthcare insurance that previously due to different variables could not get health insurance. Now, five years have passed and the current healthcare system is in turmoil due to rising costs of insurance and care, political legal battles and the possibility of transforming health insurance from state to national.
The Affordable Care Act (ACA) was designed to make insurance affordable for Americans with low and moderate incomes—particularly since it required all Americans to have health insurance in 2014 and beyond, or face financial penalties. What the law did, was expand Medicaid eligibility (with state approval) to the poorest Americans. The criteria for eligibility was designated for those Americans making up to 133% of the federal poverty line but also provides financial assistance for those making up to 400% of the poverty level to help them buy private insurance on the new state health exchanges (Ollove, 2014). The plan is designed to have four tiers of health coverage: Bronze, Silver, Gold and Platinum. Each tier presents different out of pocket costs, premiums and deductibles with Bronze being the most cost friendly premium but higher co-payments and deductable to Platinum with the highest premium but little to no out of pocket costs.
The government and their infinite wisdom created a law where the basic premise is flawed and that premise is the definition of affordability. This is inherently prevalent within the United States where the cost of living varies so dramatically from not only state to state but city to city. "What's poor in Mississippi is different from what's poor in New York state," said Elisabeth Benjamin, an executive with Benjamin and Pratt. "People have so little disposable income in New York City and other urban areas, but the law doesn't do geographic indexing" (Ollove, 2014).
The following example illustrates this concern: a family of four making 200% of the poverty level would have virtually have no money left for health care or health care expenses after paying for rent, food, utilities and other necessities for daily life. At this point, the family does not have a choice of healthcare coverage due to financial stressors, so their only option is Bronze. Unfortunately for this family, the government cost-sharing program is only available for Silver plan policyholders. As a result, the family will pay as much as 40% of their medical expenses out of pocket, instead of the 13% pay with a Silver plan. That difference could amount to more than $4,000 annually for this family (Ollove, 2014).
A current legal proponent against the Affordable Care Act is the states challenge of tax credits to consumers. The upcoming Supreme Court case, King v Burwell, is challenging a core part of the Affordable Care Act, the provision of premium tax credits to consumers. The plaintiff in this case claims that the law allows residents to receive premium tax credits only in states that run their own health insurance marketplaces directly, rather than the federally facilitated marketplaces operated by many states ("King v. Burwell: How Supreme Court Could Wreck Obamacare in States | The New Republic," n.d. 2014). If the Supreme Court rules in favor of the plaintiff, the government will dissolve premium tax credits from Americans in all those states that have adopted a federally facilitated marketplace. These tax credits are designed to help lower and middle class afford their monthly health insurance premiums.
Rand Corporation commissioned an economic study of the impact of dissolving the tax credit to consumers and how it...
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King v. Burwell: How Supreme Court Could Wreck Obamacare in States | The New Republic. (n.d.) (2014). Retrieved from http://www.newrepublic.com/article/120233/king-v-burwell-how-supreme-court-could-wreck-obamacare-states.
Logiurato, B. (2014, April 8). Obamacare RAND Study Uninsured Rate ESI - Business Insider. Retrieved from http://www.businessinsider.com/obamacare-rand-study-uninsured-rate-esi-2014-4.
Ollove, M. (2014, January 14). Is Affordable Care Act really affordable for all? Retrieved from http://www.usatoday.com/story/news/nation/2014/01/14/stateline-obama-health-care/4471957/.
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