Running head: THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE

HEALTH CARE SYSTEM

The Affordable Care Act and its Effects on the Health Care System

Jean A. O’Connor

SUNY Polytechnic Institute

THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 2

This history of establishing affordable health care in the United States has been a

long, tumultuous, and often unsuccessful mission by many presidents dating back to the

early 1900’s. From 1912-1917 under President Theodore Roosevelt’s administration

attempts at introducing a National Health Insurance Plan led to strong opposition. Similar

to today’s antagonists, private insurance company strong-arming, and post WW1 rhetoric

about German socialist insurance, and Red Scare Bolshevik anti-Communist fears

defeated any idea of a National Health Insurance Plan (Palmer, 1999). It took nearly 100

years for this current administration under the leadership of President Obama, fighting

insurance lobbyists, and public cries of socialist medicine, to pass the Patient Protection

and Affordable Care Act of 2010. Not since the passing of the Medicare/Medicaid act

under President Lyndon B. Johnson in 1965, has healthcare seen such radical reform.

The Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (ACA) was signed into law on

March 23, 2010 by President Obama, after passing the Senate in 2009, and the House in

2010. The rules and regulation for implementation of the law were drafted by the Centers

for Medicare and Medicaid Services (CMS), on behalf of the U.S. Department of Health

and Human Services (HHS) (Cooper & Gardner, 2016). The primary goal of the ACA is

to provide universal health care coverage for all American citizens and legal residents

with a coverage goal of 94%, reducing uninsured citizens by 31 million people, and

increasing Medicare enrollment by 15 million (Rosenbaum, 2011). Under the ACA

Federal standards were established for individual, small-group markets, and employer-

sponsored health benefit plans that included: a ban on exclusion of children younger than

19 with preexisting conditions, coverage of dependents up to 26 years of age under their

THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 3

parent’s insurance plans, a ban against lifetime limits, elimination of cancellations,

requirement of coverage for routine care as part of clinical trials involving cancer and

life-threatening illnesses, and preventative services for children, adolescents, and women

to name a few (Rosenbaum, 2011; HHS.gov, 2015). Enrollment is compulsory, and non-

compliance will result in a fine.

Under the direction of the ACA and CMS three major goals were established:

1. To provide affordable universal health care coverage for all. 2. To improve quality of

care. 3. To reduce wasteful spending (Rosenbaum, 2011; Vu et al., 2016). In order to

achieve these goals Insurance companies were required to meet new standards, exchanges

were established, and CO-OPs were created (Cooper & Gardner, 2016). Fee-for-service

care was also targeted by the ACA and CMS, and changes were made to payment

structures that would instead be based on performance, such as reduction of Medicare

readmissions, reduced hospital acquired conditions, and hospital and Physician

performance, and quality measure improvements, along with quantifiable improvement in

patient satisfaction as measured by the Hospital Consumer Assessment of Healthcare

Providers and Systems (HCAHPS) scores (Blumenthal, Abrams, & Nuzum, 2015).

Universal Health Care Coverage Under the ACA

The Federal government, in order for access to affordable care to take place,

established several changes to the health insurance market. These changes are

complicated and convoluted and make it difficult to understand the workings of this

system in a cogent manner. In order for the ACA to work, competition had to be

introduced into the marketplace so premiums could be reduced. Under the ACA a

network of federally funded nonprofit Consumer Operated and Oriented Plans (CO-OPs)
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were established in newly operating exchanges that would be able to compete with for-

profit insurance companies (Cooper & Gardner). CO-OPs are starter, nonprofit, insurance

companies floated by federal government start up and solvency loans under the direction

of the secretary of HHS. Their goal is to provide affordable, quality care, and

competition in the exchange market. The exchange market is an online marketplace

established by the ACA, where individuals, or small businesses seeking coverage can

compare rates of competing private insurance companies offering ACA Qualified Health

Plans (QHPs) or CO-OPs, where low to middle-income clients can get assistance with

federally subsidized health insurance, and where individuals eligible for Medicaid can be

identified (Cooper & Gardner, 2016). Plans on these exchanges must be Qualified Health

Plans that provide the essential health benefits package established by the ACA;

exchanges are required by the ACA to be established in every state (Cooper & Gardner,

2016). The state, the federal government, or partnerships of the two combined run the

exchanges, however QHPs can be sold in or out of an exchange, they just have to meet

the federal essential health benefit requirements covered under the ACA (Rosenbaum,

2011). CO-OPs can also operate and offer QHPs in or outside of exchanges.

24 CO-OPs were established under this program; their unfavorable and restrictive

operating regulations, and poor management constrained their ability to grow on the

exchange market and within the first two years 13 of them failed, and this year 4 more

failed. Money for these CO-OP start ups were federal loans that were supposed to be

paid back within 5 years with interest, but among the initial failed CO-OPs, (not

including the most recent 4 failed CO-OPs), federal loans totaling $1.175 billion dollars

will most likely not be paid back. Changes in regulations of CO-OP’s made this year will
THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 5

give the remaining CO-OPs greater flexibility in self-governance and financial

management (Cooper & Gardner, 2016), however damage within this system, as well as

the private insurance entities operating ACA plans have suffered increased losses and

those losses are being recouped in the next enrollment period with increases to premiums.

Private, employer based plans are also seeing increases to premiums to cover losses

incurred as a result of the ACA (Blase, 2016; Cooper & Gardener, 2016; American

Academy of Actuaries, 2016).

Improvement of Quality Health Care Under the ACA

Along with providing affordable, universal health care coverage, the second goal

of the ACA was to ensure that the coverage provided was based on quality care provided

to patients at both the physician and hospital level. Health care must meet quality

standards, provide efficient care, and physicians and institutions must be held

accountable to that care. No longer will hospitals be reimbursed on a fee-for-service

basis, but rather a pay for performance scale, with performance weighing heavily on

CMS established quality measures such as a reduction in Medicare beneficiary

readmission rates within 30 days, compliance rates for influenza immunization, outcome

data on catheter-associated urinary tract infections, or surgical site infections for

example. Failure to report data on quality measures result in a 2% reduction in their

annual payment update, and under the ACA value-based purchasing program hospitals

would be held accountable for their actual performance on quality measures, not just the

reporting, and by 2017 the redistribution rate will max out at 2% for those hospitals with

high levels of performance (Blumenthal, Abrams, & Nuzum, 2015; American Hospital

Association, 2014; CMS.gov, 2015). As part of the value-based incentive payment

THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 6

program, patient satisfaction surveys were added to capture a national, standardized,

publicly reported survey assessing 32 items measuring patient’s perceptions of their

hospital experience (hcahpsonline.org, 2015). Because these scores are publicly reported,

they incentivize hospitals to improve quality of care and demonstrate pellucidity in the

quality that hospital provides. Some examples of HCAHPS measurements include

patients’ communication with doctors and nurses, staff responsiveness to patients’ needs,

pain management, discharge instruction, patient teaching, cleanliness and quietness of

rooms, and overall rating of institution.

Prevention Investments and Waste Reduction Under the ACA

One of the third aims of the ACA is to reduce wasteful spending in health care.

Part of this goal is obtained through pay-for performance, value-based incentive

programs. By reducing unnecessary readmissions, reducing infection rates, and

providing for decreased length of stay hospitals will ultimately reduce wasteful spending.

However, the real reduction in costs come from preventative primary care, and

community investments to improve public health (Rosenbaum, 2011) One of the ACA

conditions for nonprofit hospitals to maintain their nonprofit status is a requirement that

they provide community assessment health needs, provide non-discriminatory emergency

care, simplify billing and collection practices, and provide clearly defined means to

financial assistance eligibility and assistance policies (Rosenbaum, 2011). Health care

providers are also encouraged to form accountable care organizations (ACOs), which

coordinate ambulatory, inpatient, and post-acute care services, and would be responsible

for the cost and quality of care of Medicare beneficiaries. Successful ACOs, which fall

under this Medicare Shared Savings Program (MSSP) can share part of the savings they
THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 7

incur (Blumenthal, Abrams, & Nuzum, 2015). Cost sharing elimination and regulatory

requirements related to coverage of clinical prevention services is considered one way in

which the ACA is investing in public health along with a Prevention and Public Health

Trust Fund valued at $15 billion (Halloran, 2014; Rosenbaum, 2011). Under this fund the

ACA encourages implementation of employee wellness programs, and in 2011 the HHS,

under the ACA, distributed $10 million dollars to establish and improve employee

wellness programs, which mandated quality reporting from health insurers to monitor the

programs’ effectiveness. Outcome based rewards are provided to employers for

participation (Vu et al., 2016). The model of these employee wellness programs, if

successful, could be opened to the public (Vu et al., 2016). The ACA also seeks to invest

in primary care by funding education programs for health care professionals and offering

scholarships and loan forgiveness to primary care clinicians who volunteer to practice in

underserved areas (Blumenthal, Abrams, & Nuzum, 2015). This is a burgeoning area for

primary care Nurse Practitioners as state regulations and restrictions change; nurses will

need to be educated in ACA policies and be ready to step into these roles as needed

(Lathrop, B., Hodnicki, D.R., 2014).

Nursing Care and the ACA

Transformational care, as evidenced by the changes introduced in the ACA, is

nothing new to nursing. Since Florence Nightingale came back from the Crimean War,

nursing care at the bedside changed forever, and quality improvement to care based on

evidenced-based practice was established as the new standard of care. The ACA seeks to

improve access to health care, improve quality of care, and reduce waste by establishing

pay-for performance programs. Nurses have always been champions for patients to
THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 8

receive the best possible care, to be covered by some form of health insurance, and have

positive outcomes under their care. Nurses know that when reimbursement is tied to

care, institutions have the opportunity to provide quality care through adequate nurse

staffing and quality improvements to work environments. Hospitals however have been

preparing for the implementation of the ACA by reducing staffing, and cutting costs to

patient care environments (National Nurse Magazine, 2014; Dertz, 2014; Kroning, 2015).

Studies have shown a direct correlation between nurse staffing ratios and patient

outcomes (McHugh, Berez, & Small, 2013), yet hospitals in an attempt to cut costs,

understaff nursing units in a direct contradiction to evidence that proves hazardous to

patient outcomes (Aiken et al., 2014; Stanton, 2004). Most quality measures that

hospitals rely on for value-based incentive payments fall directly in the line of the

bedside nurse, for example: CAUTI, falls, discharge instructions, reduction of

readmission rates to name a few, yet staffing cuts impede nurses abilities to protect their

patients appropriately. Nurses are on the frontlines of health care whether facing

challenges at the bedside, or facing challenges to primary care. Patient centered care is

our priority, but restricted budgets, laws, and support will be our biggest challenge as we

progress under the current policies of the ACA and institutional reactions to protecting

their bottom line.

Pro’s and Con’s of the Affordable Care Act

The ACA is not perfect, but it is a century in the making of wanted policy change in

a country that can no longer afford its health care needs. The ACA has provided both

positive and negative changes to health care.

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Pro's Con's

Universal affordable Health Care for all Americans Complicated enrollment process and overall system

High quality safe care with a focus on primary

Compulsory enrollment or mandatory fine
preventative care

Elimination of denial of persons with pre-existing Cuts to employee hours by businesses seeking to avoid
conditions covering employees

Focus on Public Health Failure of CO-OPs

Opportunity for APRNs in Primary Care Higher Premiums and Increased Taxes

Wasted Tax payer dollars from failed CO-OPs inability

to pay back loans

Increased work load of bedside nurses catering to

quality measures and HCAHPS scores with decreased
resources

Conclusion

The Patient Protection and Affordable Care Act is a multidimensional piece of

legislation established in the best interest of the American public that set out to provide

universal, affordable, high quality health care to every American citizen and legal

resident in the United States. With an aging baby boomer population, and increased

health care costs in general, America was in need of some kind of impetus to get the ball

rolling on health care reform. As Winston Churchill said, “There is nothing wrong with

change, if it is in the right direction.” Though the ACA is a highly contested, and hotly

debated plan in the political arena, it is the plan in effect now, and right or wrong, until

that changes we in the health care profession have to learn to navigate the pro’s and con’s
THE AFFORDABLE CARE ACT AND ITS EFFECTS ON THE HEALTH CARE SYSTEM 10

of this plan and provide our patients with informed, high quality care, education, and

access to resources. We must always strive for patient centered care that focuses on

evidenced-based, preventative primary care to do our part in reducing health care costs,

and improving patient outcomes, because we know that transitional change truly begins

through our human interactions with our patients.

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