Healthcare Reform Simplified Post 1
A series of blog posts reviewing the basics of healthcare reform and how it will impact regular Americans.
It’s the constitutional law
Obamacare, healthcare reform, ACA, or whatever you want to call it, is now all but certain to move forward with the Supreme Court’s affirmation that the law is constitutional. Up until this point, most people didn’t focus on how the ACA would impact their life, if it all, because we didn’t know if it would survive the court challenges? With all the renewed interest in what all the fuss is about, I decided to undertake a series of blog post that will simplify the Affordable Care Act (ACA) and what it will mean to the average American citizen.
Why healthcare reform?
The U.S. does a decent job of helping a variety of different groups of people get access and affordable healthcare through either insurance or direct aid. We have programs such as Children’s Health Insurance Program, Medicaid for the poor, and Medicare for the retired and permanently disabled. The bulk of the individuals and families in the middle have access to health insurance through group plans at work or a competitive individual market.
Prices are rising
In the 1970’s the cost of providing healthcare started to creep up. As hospitals and doctors had more tools and expensive tests for treating diseases like cancer and heart disease the treatment cost to insurance companies started to rise. The cost of diagnosing, treating and rehabilitation after the illness has been steadily climbing with all the imaging systems and pharmaceuticals to treat rare diseases. If you are diagnosed with a disease, the insurance company is going to be on the hook to pick up all the costs at some point.
Front line of cost containment
In an effort to rein in costs, health insurance companies became far more diligent in denying claims for healthcare services and broadened the denial of health insurance to individuals with pre-existing conditions. While the denial of coverage helped reduce their potential expenses, it didn’t stop the escalation healthcare costs.
Cost shifting: from me, to you, to him, to us
This cycle is fed by folks who can not get health insurance. Eventually they resort to emergency rooms for treatment and in many cases are unable to pay the medical bills. To reclaim the lost revenue, hospitals and doctors have to negotiate higher reimbursement rates for different procedures with the insurance companies that do pay their bills. These higher hospital charges are reflected in higher premium rates for health insurance.
Even though the uninsured rate has hovered around 15% of the total population for the last 20 years, this percentage represents an increasing pool of citizens as our population increases. It is also readily apparent that these folks without health insurance are less productive, have higher rates of bankruptcy because of medical bills and incur higher cost for medical treatment because their conditions are not being managed. To emphasize, these are families that didn’t qualify for any government program. Essentially, the health insurance and health care services markets were not working for them. The market was broken.
A mandate for change?
Critical mass for healthcare reform occurred with the election of Barrack Obama and the Democrats winning the House and Senate in 2008. They cobbled together the Patient Protection and Affordable Care Act (PPACA) that uses the existing structure of health care providers and insurers.
While the law spelled out what the end result of reform should look like, no denial for pre-existing conditions, individual mandate, etc., it has been up to the department of Health and Human Services working with physician groups, hospitals and health insurance companies to write the regulations that ultimately create the reform.
Because the law has such a profound effect on the existing market place (some would say broken market) there are lots of little regulatory pieces to address the various linkages and inevitable disruptions. In addition, the ACA addressed some other aspects of the nation’s healthcare problems like reforms to Medicare for cost savings, Long Term Care initiative and a quasi-public health insurance option called Consumer Operated and Oriented Plans.
In the following posts I will focus on the different parts of the ACA and what it means to the average citizens and business. My goal is readable, to the point information that people can use. You input is welcome: sources, clarifications, or additions will all be considered.