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Professor Bell
Summer 2017
It is quite evident that healthcare reform has been at the forefront of the minds of
American citizens. The 2014 implementation of the Patient Protection and Affordable Care Act
fueled the healthcare reform debate at the 2016 presidential election. With the noble intention to
expand coverage to millions of uninsured Americans, lower the overall cost of healthcare, and
ultimately better the quality of healthcare delivery, the Affordable Care Act proposed strict
regulations and the growth of bureaucratic control (Shi & Singh, 2015). Although the legislation
did expand coverage to millions, the Affordable Care Act has it’s fair share of shortcomings.
The recent shift in the political leadership of America has left republican congressmen
scrounging for a healthcare alternative before the faults of the Affordable Care Act financially
suffocate the public. The plan proposed by republican congressmen, the American Health Care
Act, or AHCA, was written with the intention to cut the Affordable Care Act’s regulatory control
by transferring the power from the federal government back to the states to provide Americans
with genuinely affordable health care (Kodjak, 2017). Nonetheless, this analysis will provide a
In the first term of his presidency, President Barack Obama signed the Patient Protection
and Affordable Care Act into law, delivering a comprehensive change to the healthcare delivery
system of the United States. The Affordable Care Act, or ACA, undoubtedly represents the most
extensive reform effort since the creation of America’s social welfare programs, Medicare and
Medicaid (Shi & Singh, 2015). The ACA focused on controlling the cost of health care and
decreasing the number of uninsured citizens by expanding medicaid coverage, opening state-
based marketplaces, providing subsidies for low-income families when purchasing insurance,
and imposing numerous regulations on insurance companies, small businesses, and individuals
(25, 2. A., 2017). Though much good was accomplished through the passage and start of the
ACA, like lowering the number of uninsured, the ACA has indisputably lead to just the opposite
of affordable health care for many of those participating in the marketplaces. Since the
legislation was fully adopted by the states in 2014, more and more insurance companies have
been pulling out of the state-based individual marketplaces, placing a great strain on competition
within the market while also driving up the cost of premiums (Khazan, 2017).
There are many underlying problems with the implementation of the Affordable Care
Act. The legislation created state-based American Health Benefit Exchanges, otherwise known
insurance packages from multiple insurance companies to those who do not have health
insurance through government programs, their job, or any other source, and who fall below
138% of the Federal Poverty Level. The Affordable Care Act also prohibited the ability of
insurance companies to refuse coverage to those with pre-existing conditions (25, 2. A., 2017).
Recently, insurance companies within the exchanges have been fleeing, or solely returning to the
private market, citing financial losses as their reason for pulling out. For example, Blue Cross
Blue Shield is currently the only insurance company participating in the Alabama state
marketplace. Because all other insurance companies have withdrawn from the exchanges in
Alabama, Blue Cross Blue Shield is spending approximately $1.20 for every $1.00 it collects in
premiums (Khazan, 2017). The financial losses faced by insurance companies are most likely a
result of having to insure so many sick, poor people in the individual marketplace.
With the abundance of insurers pulling out of the state-based individual marketplace,
health care premiums for American citizens have skyrocketed. When insurers leave the state-
based individual marketplaces, competition within the marketplace stiffens, forcing more
insurees onto the remaining insurers, consequently driving up the cost of healthcare premiums.
For instance, the cost of premiums in Arizona are estimated to more than double from last year.
If a 27 year old non-smoker were to purchase the second-lowest silver plan, the most popular
plan, from the Arizona exchange, they can expect a gigantic increase in premiums. A 2016
projection showed that this individual living in Arizona would pay $422 in premiums for an
unsubsidized second-lowest silver plan in 2017, a giant leap from the $196 the previous year, a
116% increase (Herron, 2016). Fortunately, 74% of those participating in the Arizona exchange
can expect a subsidy to help pay for their premiums. However, the remaining 26% of Americans
purchasing health insurance from the Arizona exchange will not qualify for such subsides and be
forced to take on the rising cost of premiums with no help from the government (Goodnough,
2016).
The American Health Care Act, or the Better Care Reconciliation Act of 2017, is the
latest effort to reform the healthcare system and has recently passed in the House of
Representatives. There are many fundamental differences between the American Health Care
Act and the Affordable Care Act. Foremost, The AHCA repeals the Affordable Care Act’s
individual mandate. Under the Affordable Care Act, individuals are forced to buy insurance, or
pay a penalty (25, 2. A.). The AHCA does not require individuals to purchase insurance,
although if a previous uninsured individual decides to purchase insurance from the exchanges
later on, they will then face a monetary penalty (2017, May). Also the American Health Care Act
keeps the provision that insurance companies cannot refuse coverage to those individuals with
pre-existing conditions. However, unlike the Affordable Care Act, the AHCA does not mandate
that the cost of insurance for those with pre-existing conditions be the same as healthy
individuals. Within the AHCA, the Establish Patient and State Stability Fund allows for 115
billion dollars of federal funding to be available to all state over the period of nine years. The
fund also includes 8 billion dollars in additional funds to be shared amongst the state to provide
high-risk individuals with financial help, since there is no limit on the cost of their insurance.
The states may choose to spend this money on promoting access to preventative care, subsidies,
The Affordable Care rolled out a massive medicaid expansion to those states that would
choose to expand their programs. Of thirty-two states that choose to expand their Medicaid
program, newly eligible adults under the those below 138% of the federal poverty line, are fully
funded by the government until 2020, then funding will decrease to 90% (H.R. 1628). However,
under the American Health Care Act, there will be a complete reversal of the Medicaid
expansion, although those who are enrolled by 2020 will be grandfathered in. The AHCA also
will reduce federal funds made available to the states for Medicaid and place caps on coverage
per enrollee for all categories of individuals, including children and the disabled (2017, May).
The Affordable Care Act required that states that choose to expand Medicaid cover basic mental
health and addiction services, partly due to the rising opioid epidemic hitting America (Zezima
& Ingraham, 2017). The AHCA would scrap this requirement beginning in 2020 but it would
disperse a fund of 15 billion dollars to the states in order to fund these services, as well as
In summation, the heated political climate of the today is greatly due to the problems
associated with the current United States healthcare system and the proposals to amend it. While
The Affordable Care Act has benefitted millions of previously uninsured individuals, some with
pre-existing conditions, it has done little to bring the cost of healthcare premiums down to those
in the marketplace that do not qualify for it’s subsides. Premiums have steadily increased in the
majority of the 50 states and one by one health insurance companies are dropping out of the
exchanges. In addition, the ACA has imposed far-reaching regulations of the state's, small
businesses, and individuals, contributing to the Republican plan to partially repeal and replace
segments of the ACA that they feel drive up the cost of care for American families. The
American Health Care Act was designed to hand the newfound power of the bureaucracy under
the ACA, back to the states. The new Act repeals the individual mandate, cuts Medicaid
enrollment eligibility in 2020, and also rids the state's of numerous regulations on coverage for
Medicaid beneficiaries while at the same time, throwing money at the states to deal with the
chance of rising costs. Only until the American Health Care Act passes in the Senate will we, the
American people, know exactly how its proposals will affect the healthcare system of the United
States.
References
25, 2. A. (2017, February 02). Summary of the affordable care act. Retrieved from
http://www.kff.org/health-reform/fact-sheet/summary-of-the-affordable-care-act/
https://www.medicaid.gov/affordable-care-act/index.html
Goodnough, A. (2016, October 29). Increase in health act premiums may affect arizona vote. The
https://www.nytimes.com/2016/10/30/us/politics/affordable-health-care-premiums-
arizona.html?mcubz=0
Herron, J. (2016, November 1). Here’s how much obamacare premiums are rising in all 50
http://www.thefiscaltimes.com/2016/11/01/Here-s-How-Much-Obamacare-Premiums-
Are-Rising-All-50-States
H.R. 1628: American Health Care Act of 2017. (n.d.). Retrieved from
https://www.govtrack.us/congress/bills/115/hr1628/summary
Khazan, O. (2017, May 11). Why so many insurers are leaving obamacare. The Atlantic.
Retrieved
from
https://www.theatlantic.com/health/archive/2017/05/why-so-many-insurers-are-leaving-
obamacare/526137/
Kodjak, A. (2017, May 05). Obamacare vs. american health care act: here's where they differ.
health-care-act-heres-where-they-differ
Shi, L., & Singh, D. A., (2015). Essentials of the U.S. health care system. Retrieved from
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Summary of the american health care act . (2017, May). Retrieved from
http://files.kff.org/attachment/Proposals-to-Replace-the-Affordable-Care-Act-Summary-
of-the-American-Health-Care-Act
Tuttle, B. (2016, October 18). 8 states where obamacare is rising at least 30%. Time Magazine.
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Zezima, K., & Ingraham, C. (2017, March 09). GOP health-care bill would drop addiction
treatment mandate covering 1.3 million americans. The Washington Post. Retrieved from
https://www.washingtonpost.com/news/wonk/wp/2017/03/09/gop-health-care-bill-would-
drop-mental-health-coverage-mandate-covering-1-3-million-
americans/?utm_term=.9000a6703a95