Affordable Care Act’s Impact on Healthcare
Healthcare in America has become a divisive issue over the years. Political parties have gone to war with each other over the years in truly honest attempts to bring more cost-effective healthcare and access to affordable healthcare insurance to the American public. The Patient Protection and Affordable Care Act was passed into law in 2010 under President Obama’s administration. The statute was enacted by the 111th United States Congress. One of the primary goals of the ACA was to deliver quality health outcomes, to lower costs, and greatly help to improve accessibility. These are all worthy goals that all medical professionals should strive for. With wide sweeping regulations like the ACA there can be many missteps that occur during the process of fully implementing it into law. These missteps are normally labeled as unintended consequences by economists and healthcare policy makers. This is a perfectly natural occurrence that happens in the markets, but just because it is natural, doesn’t means that its healthy for the country and especially for the millions of individuals that are depending on a healthcare systems to run smoothly and without major hiccups to deliver highly skilled medical services. The unintended results of such a massive healthcare reform bill can have lasting impacts on all the sectors with in the healthcare ecosystem. In this paper, I will attempt to explain how the ACA has forever changed healthcare law, medical technology, managed care facilities, and the labor markets.
The Labor and Insurance Markets
Many different economic systems are in play across the global today. Capitalism is the driving force behind our system in the West. When it comes to the healthcare industry in American, it would best be described as mixed between free market based care and governmental care i.e. Medicare and Medicaid. Any healthcare policies that are passed into law send lasting impacts throw all sectors of society. Think of it as the ripple effect that occurs when you drop a pebble in a pond. Many healthcare policy makers have concluded that there will eventually be massive amounts of individuals dropping their employer-based insurance. This has happened but not in the numbers that experts were predicting. A study in 2012 from Mckinsey & Co. estimated that the ACA would result in upwards of 30% employees dropping their employer-sponsored insurance (ESI) (Archambault, 2014). Amanda Kowalski wrote an article where she conducts a statistical study on the impact of the ACA on each individual state. She was focusing on the individual healthcare insurance market for her exceedingly in-depth study. She goes on to document an increase 4.2 million new people, this would bring the number up to 13.2 million people that received individual market insurance over the course of 2014. This represents pre-ACA state trends (Kowalski, 2014). One way in which the ACA had harmful results on the market and the economy is that it has driven down employment and wages. The tax structure of the ACA helps to unwittingly disincentive full-time employment among the work force. It has been said that it closely resembles unemployment insurance by encourage layoffs and discouraging a rapid return to the work force (Harry, 2016). It goes without question that there are certain aspects of the ACA provision that have disastrous implications on the small group insurance market. One study deals with how small businesses and their employees are reacting. Employers that mostly have lower social economic individuals working for them are opting out of the small group healthcare insurance markets. The reason is because many of their employees will be better covered under subsidized individual coverage. Another reason is that smaller employers with less than fifty workers will be incentivized to self-insure their plans. This will lead to a downsizing in the small group insurance market (Monahan, 2013).
The healthcare markets and the free market in general are greatly persuaded by the tiniest of shifts in the ocean of economics. The laws we create and pass are designed with the good of the nation in hart. These laws have numerous purposes, from maintaining order and due process, to ensuring individuals will have access to affordable healthcare insurance. But in our haste to develop a society that reflects our enlighten notion of fairness in the new century, we sometimes overlook the unintended consequences that the laws we pass can have on our most valuable citizenry. With such an all-encompassing legislation like the ACA, this is unavailable. Man cannot consider all the countless variables. However, he must be willing to consider criticism and work to correct his mistakes. On the economic front of the ACA, its common knowledge that it is flawed and certain portions of the policy need to be redone to help promote better economic growth.
ACA Impact on Technology
The brightest highlight of the American healthcare system comes in the form of its technological advances and in the realm of research. The world’s most highly trained and educated medical professionals and scientists work in the fields of medical research, looking for cures to some of the world’s deadliest illnesses. Our advances in technology have led to the genome editing process, electronic health records, and even life like prosthetics. Individuals from all the developed world come to our healthcare facilities like John Hopkins, and University of Michigan with the hopes of taking advantage of their modern medical technologies. The American healthcare system does have its flews but it’s safe to say it stands head and shoulders above the rest when it comes to our state of the art medical devices and research methods. Unfortunately, the medical devices industry was not immune to the effects of the ACA, bad legislation can pose serious restraints on the growth of businesses and research in the field of healthcare. One such medical device company that is in Boulder CO, was hoping for the repeal of the ACA. When the ACA was first passed back in 2010 there was 2.3% medical devise tax package in the bill. There wasn’t much thought behind that portion of the bill, and even beginner level economist would have instantly pointed out that such a tax would work to oppress the creative process, research and production and it would only raise the price on medical devices for patients because companies would just pass the tax onto consumers. Robert Kline, the CEO of Boulder’s EndoShape, stated that his company saw a 77% decline in venture capital because of the taxes that were levied upon them. Kline went onto say “Any tax has an impact, but most of the bigger companies can absorb it”. He also stated that “The tax was just taken right off the top: It would always reduce the amount of capital we had to reinvest…We would of hired more people and been more aggressive with our growth.” Larger companies don’t feel the effect of the 2.3% sales tax, but it makes it difficult for the smaller medical devices companies to compete in the market place. The good thing about the medical device tax is that it receives bipartisan support for repeal from both Republicans and Democrats (Castle, 2017).
ACA Impact on Medicare
Elderly individuals in our country our have the ability to enroll in Medicare when they reach the age of 65. Some young people have the option of enrolling too, but these younger individuals usually major disabilities that impair their motor functions and ability to live autonomous lives. The program serves the elderly after they retire from the work force. We are fortunate enough to live in a society that works to take care of their aging population. Providing healthcare insurance to them falls in the realm of good ethical behavior. Like all the other sections in healthcare, Medicare patients just so happen to experience a positive scenario for the passage of the ACA bill. Preventive care services were one something that became more accessible and affordable to the elderly under the guidelines of the ACA. Cancer screening saw an increase, the services were being taken full advantage of by the senior citizen population. The Surveillance, Epidemiology, and End Results (SEER) program used the latest in advance technologies to conduce population-based data surveys. From this method, they could conclude that individuals were getting their cancer screening at earlier and even more treatable stages. Brett Lissenden and Arron Yao, in their article named Affordable Care Act Changes to Medicare Led to Increase Diagnoses of Early-Stage Colorectal Cancer Among Seniors stated that “We estimated that the ACA resulted in an increase of 8,400 (8 percent) diagnoses of early-stage colorectal cancer among US seniors in the period 2011-13” (Lissenden & Yao, 2017). In the realm of preventive services, it’s safe to say that Medicare was going to be okay even before healthcare reform was possible. Medicare was already covering more preventive services for the elderly. An example of the growth of Medicare before the ACA can be seen in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). The act helped to secure within the first six months of being enrolled in Medicare Part B they would be entitled to an initial preventive physical examination. The exam helped to promote health and it also provided a way to combat diseases before they worsened (Kaplan, 2011). One thing that all Americans seem to agree upon is that the protection of our elderly needs to be safeguarded from the pit falls of the healthcare system. Medical professional and healthcare administrator are entrusted with the safety of the less fortunate and ill. The medical community is viewed as being more ethical and caring for the valuable in of society than the ordinary citizenry. For these reasons, we place full confidence in their abilities to comply with state and federal regulations that circle around Medicare.
ACA and Medicaid
Medicaid would best be described as a healthcare insurance program that is funded by both the federal government and the states. Its primary goal is to concentrate on lower income individuals and families. This program covers children, blind individuals, disabled and other people that are not receiving federally assisted income. So, Medicare is concentrated on the elderly, while Medicaid is concentrated on lower incomes people. One of the side effect of the ACA on Medicaid has been on the number of enrollee they have received. One of the lesser known goals of the ACA when it was first implemented was to intensely increase the total number of the socioeconomically disadvantaged individuals that were eligible to enroll in Medicaid, and it did that (Hill & Abdus, 2014). The push for Medicaid expansion by the ACA is created significate changes in individual’s healthcare insurance coverage and on the free market. Economists are recently discovering people in the work force that were experiencing “job lock” (Being tied to a specific job just for insurance reasons) are now able to switch jobs and careers paths more easily without having to worry about the loss of healthcare insurance benefits that they would have been before the expansion of Medicaid under the ACA. This helps to create a more diversified work force in terms of job skills. One of the other benefits that the ACA is having is in the form of the Children’s Health Insurance Program (CHIP). Enrollment in CHIPs have increased by an incredible 12.2 million nationally from October 2013 through March 2015. This means better healthcare insurance for the children of Medicaid recipients (Gooptu, Moriya, Simon, Sommers, 2016). I worked in healthcare marketing/customer service for an insurance company. I handled a lot of Medicaid recipient families, many of them were just barely able to make ends meet. They were extremely thankful for what services Medicaid brought them.
Policy and Politics in MCOs under ACA
Healthcare policies is what helps to provide standards and values in healthcare. Administrators and other medical professionals will often find themselves in situations where they feel uncertain about a particularly question (non-clinical) that a patient has brought to their attention. Laws and regulations are implemented to give the healthcare professionals guidance in these scenarios. These policies that the medical professionals follow can be written externally at the federal or state level or written internally at the hospital administration level. When massive federal policies are created, many medical professions are forced to understand the new policies and how they affect their patients and their business model. It has become obvious that Medicaid expansion under the ACA has had many positive outcomes for states and patients alike. For example; improved healthcare outcomes, expanded coverage, improved financial standing for medical facilities, and positive budget effects. One of the reasons that is believed for some states not expanding Medicare must do with the timing of the policy. Many administrators didn’t fully understand the rules of the policy and how to implements them into their organization. Another reason is that the positive results that are now being documented were unknown and the beneficial effects were not seen by administrators, so they could not absorb the professional studies highlighting the benefits of expansion into their initial budgets. If this is true, many states in the future will expand their Medicaid coverage under the ACA. Unfortunately, one cannot rule out politics as being a possibility for certain states not expanding their Medicaid pools. The ACA was one of the most divisive pieces of legislations to have been passed in the last fifty years. In the years after the passage of the ACA the Republicans have voted numerous times to repeal the bill, having failed every time. Joyce Hahn writes in her article Medicaid Expansion: The Dynamic Health Care Policy Landscape:
“Many states have opted not to implement the insurance marketplaces, meaning the federal government must step in to operate them…It would not be surprising therefore that some states would continue to express their opposition to ACA by refusing to implement one of the key provisions – even if it meant foregoing apparent health and economic benefits” (Hahn, 2013).
Over the past couple decades, the political divide has grown between Americans. We no longer see the opposite party as decent people that you just so happen to differ on economic or healthcare policies. This schism is taking it toll on the healthcare sector. Politicians are no longer willing to work with each other to pass regulation the benefits the public. When one party tries to enact healthcare reform bills, the opposite party does everything in their power to sabotage all the hard work of their political “enemy”. We see this with all the attempts to repeal the ACA from Republicans. This goes both ways, if the new administration is success in passing healthcare reform, the Democrats will do everything they can to destroy it.
Consumerism and ACA
Over the past few decades, consumerism has been on the raise in the healthcare industry. Consumerism is the idea of the patient/customer having the ability to shop around for themselves. With this method, patients should have the ability to pick the best medical services and medical professional that best fit their economic limits. This approach relays on the customers being smart with their finances and educated on what medical services they need. As of a few years ago, must patients lack the most basic of information when they were in dyer situations and needed the most current information available. What little information they could get would often leave the patient more confused about their insurance coverage or the medical procedures they needed. Even though today’s patients have a wealth of up to data information, they are still running into barriers. The data is plentiful, but in certain area there is gaps in all the correct information and this makes for some of the quality to be questionable when it comes to locating the best providers. Some patients are may have multiple excellent providers to choose from but they can be limited because of their healthcare plan may have restriction on them. Consumerism is still relatively new to healthcare so all the bumps have not been ironed out yet (Gregory, 2016). The days of copay plan designs are slowly going away. The ACA has helped to accelerate the implementation of Consumer Directed Health Plans (CDHPs). Greg Mansur in his article The Benefit Aftereffects of ACA-Accelerating Toward a New Health Economy states
“Plan sponsors are looking to these models as a strategy to promote greater consumerism in their employees, lower costs and provide a platform to reward healthy behaviors. With the 2018 Cadillac tax facing many employers, the opportunity to lower total health care costs has been top of mind, and CDHPs are clearly part of that strategy for a growing number of companies” (Mansur, 2015).
Thanks to the ACA, consumerism in the healthcare insurance market places is slowly becoming a reality. Options is necessary for and any business model to succeed. The introduction of consumerism as a health model will enable competition between the providers which will hopefully help to drive down the sky rocketing cost of healthcare in the United States. Healthcare is already responsible for nearly 17% of the GDP of our economy.
Ethics and Providers
I have always had a fascination with ethics in healthcare. Ethics is a broad topic when it comes to healthcare. Many think of abortion, euthanasia, physician assisted suicide, or cloning issues. These are very interesting topics but there is more to ethics, there is ethical concerns that occur on the administrative/non-clinician side of the healthcare industry. They usually are centered around billing practices. The ACA was supposed to help reduce billing discrepancies when it comes to out-of-network providers. According to Kaiser Health News
“insured individuals under the ACA can still face high medical bills under a practice called “balance billing,” in which out-of-network providers charge patients for the difference between what patients’ insurers cover and what providers’ charge for the service” (KHN, 2015).
While working in the healthcare insurance industry I encountered balance billing on numerous occasions. It was usually from unethical providers that were looking to double dip on payments from elderly insurance members that were easily confused about their health insurance plans and what they covered. I would have to investigate these situations when members would call seeking information about why they are being billed from the providers when they assumed their insurance plan covered the procedures they were being billed for. Hopefully the ACA with the help of educated healthcare insurance workers can limit the number of providers trying to scam innocent people.
The Affordable Care Act was passed with the best intentions in mind for the American public. Like most large pieces of legislation, there can be unintended consequences that occur in the market place. Some of these had positive effects, some had negative, but it will take a few more years before we are able to grasp what side effects on the healthcare system really are. I am under the belief that the ACA will be more of a net positive for the American public. As I write this final, the new administration just passed a new healthcare reform bill in the house, in a few days it will go before the senate for a vote. So, the future of the ACA is currently unknown.
Note: My final’s paper for my Managed Healthcare class at Saint Joseph’s University. Turned in May 2017.
Archambault, J. (2014). Obamacare’s impact on labor markets: Limits on the predictive value of romneycare. American Journal of Law and Medicine, 40(2), 215-30. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1622616592?accountid=14071
Kowalski, A. E. (2014). The early impact of the affordable care act, state by state. Brookings Papers on Economic Activity, , 277-355. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1682848917?accountid=14071
Harry, G. A. (2016). The new cost of labor and employment for small businesses in a post-ACA economy (Order No. 10146693). Available from ProQuest Dissertations & Theses A&I; ProQuest Dissertations & Theses Global: The Humanities and Social Sciences Collection. (1830440249). Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1830440249?accountid=14071
Monahan, A. B., & Schwarcz, D. (2013). LIMITING THE ACA’S THREATS TO SMALL GROUP HEALTH INSURANCE MARKETS. Risk Management and Insurance Review, 16(1), 25-34. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1346179459?accountid=14071
Castle, S. (2017, Feb 04). Boulder county medical device makers anxiously await ACA tax repeal. TCA Regional News Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1864980450?accountid=14071
Lissenden, B., & Yao, N. “. (2017). Affordable care act changes to Medicare led to increased diagnoses of early-stage colorectal cancer among seniors. Health Affairs, 36(1), 101-107. doi: http://dx.doi.org.ezproxy.sju.edu/10.1377/hlthaff.2016.0607
Kaplan, R. L. (2011). Older Americans, Medicare, and the affordable care act: What’s really in it for elders? Generations, 35(1), 19-25. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/878740852?accountid=14071
Hill, S. C., Abdus, S., Hudson, J. L., & Selden, T. M. (2014). Adults in the income range for the affordable care act’s Medicaid expansion are healthier than pre-ACA enrollees. Health Affairs, 33(4), 691-9. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1517929992?accountid=14071
Gooptu, A., Moriya, A. S., Simon, K. I., & Sommers, B. D. (2016). Medicaid expansion did not result in significant employment changes or job reductions in 2014. Health Affairs, 35(1), 111-118,1-12. doi: http://dx.doi.org.ezproxy.sju.edu/10.1377/hlthaff.2015.0747
Hahn, J. A., & Sheingold, B. H. (2013). Medicaid expansion: The dynamic health care policy landscape. Nursing Economics, 31(6), 267-72, 297. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1477880124?accountid=14071
How Real is Healthcare Consumerism? (n.d.). Retrieved May 06, 2017, from http://www.healthleadersmedia.com/hr/how-real-healthcare-consumerism?nopaging=1
Mansur, G., & Thompson, M. (2015). The benefit aftereffects of ACA-accelerating toward a new health economy. Benefits Quarterly, 31(1), 26-31. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1658707261?accountid=14071
Some insured consumers still face high medical bills despite ACA (2015). . Washington: The Advisory Board Company. Retrieved from http://ezproxy.sju.edu/login?url=http://search.proquest.com.ezproxy.sju.edu/docview/1655916677?accountid=14071