Obamacare Deliverance: Fear No More of Bankruptcy because of Healthcare Expenses

The Affordable Care Act (ACA) colloquially termed by the US citizens as Obamacare, provides healthcare that can be afforded by all in USA. This Act attempts to provide patient protection under the federal statute, and was brought into legal framework by the President Barack Obama and his government, in 2010. The effort behind enacting the ACA was to increase the health insurance affordability to every American citizen. The Act tries to lower the rate of insurance by enabling both private and public coverage in insurance, thereby, reduce the healthcare expenses for both the government and people of America.

obamacare health insurance

Of course, this health insurance reform was also subject to debates and oppositions from the republicans. Paul Ryan came out with a set of alternatives in healthcare as ‘Paul Ryan Health Insurance care’ , felt certain application fatalities in the Obamacare policy like:

  • $716 billion will be cut from Medicare.
  • Assault at religious liberty by infringing on Catholic hospitals, churches, and charities.
  • Supports abortion with funding from the taxpayers and without any restrictions.
  • About 20 million people will lose their individual health insurance, along with 7.4 million seniors also at loss.

So, will Obamacare or Affordable Care Act(ACA) work for the U.S.?

Health Insurance Scenario before ACA or Obamacare Health Insurance cap

Before ACA or Obamacare was passed on March 23, 2010, the U.S. media was ubiquitously discussing the huge costs incurred in buying healthcare insurance in the U.S.. However, looking at the insurance industry from a historical viewpoint, the expenditure in the U.S. healthcare industry was quite slow in last 50 years. Within 2000 and 2010, before Obamacare was implemented, the expenses on physicians were growing at the following rates:

preobamacare expenditure

  • According to Congressional Budget Office (CBO) finding, a single maximum factor to healthcare spending was the launch of new technology.
  • With best medicines and technologies, the cost shoots up when introducing in the market.
  • The R&D of new pharmaceuticals, before entering the consumer sector, incurs heavy expenditure.
  • USA has been the world leader at producing more than close to $175 billion in products related to healthcare technology.

Involving Third Party in Payment Measures has Increased the Cost of Insurance from Its ‘True Cost for Healthcare Coverage’

  • The pre-ACA policy saw employers offer benefits in healthcare to cover the legal hindrance of wage barriers. Companies attracted employees by paying pre-tax bills as one alternative option to higher compensations. This primarily made payments, an additional cost to true cost, using third-party as institutional practice.
  • Till 2008, it was government’s onus to pay for greater than 50% of the total healthcare that was provided in USA.
  • From 1975 to pre-Obamacare tenure, a major chunk of healthcare expenses were borne by Americans, rather than support from the government programs or insurance.

America spent higher than $8,200 annually on one person’s health care, which stands twice as high as other developed countries

The sum amounts to 18% of the GDP, with at least 7% gets spent in administrative and other overhead costs. Check this link for a complete understanding on the major differences that occurred before introducing the ACA or pre-obamacare.

Post Implementation of Obamacare or ACA towards Healthcare Insurance in America

The Patient Protection and Affordable Care Act (PPACA) or obamacare . Obamacare, a federal statute moved into law in the United States is being considered a landmark achievement towards reforming healthcare issues. According to actuary experts, more U.S. citizens were getting a better value and more care in health sector for every dollar they spent.

According to Gerald Komniski, Director, Centre for Health Policy Research, UCLA- this health insurance was a long awaited reform. He says,

“having lived through 20 years of advances in health care but not any significant advances in dealing the chronic problem of just the unacceptably high rate of uninsured (people) in the United States, at least we are moving forward.”

Well, the benefits observed after the implementation of PPACA in health insurance basics marketplace are:

    • No insurer can deny coverage or charge extra

From 2014, not any insurer is allowed to charge the Americans extra or deny them health coverage on the basis of pre-existing or present health condition. The insurers are not allowed to set rates depending on the incumbent’s health status. They have to cover the person in total.

    • All plans must be inclusive of preventive treatments and services for both children and adults

All those health insurance plans introduced post September 23rd, 2010 will have to provide different in-network prevention treatments and services across both children and adults. Moreover, the amount paid will have no copays or other out-of-pockets expenses like meeting a deductible or co-insurance.

    • Additional benefits for children below 26 years

Those policies that were formed after September 23rd, 2010, all children below 26 years of age can either remain with their parent’s insurance or retain the plan of their mother and father. This facility is exclusive of whether the child is financially independent, married, covered by his corporate scheme, or not living at parent’s home.

    • Lifetime limits forbidden for regular heath provisions across the entire health insurance marketplace

The new plans that start from 2014 prohibit all annual or lifetime limits across all the plans. Even the grandfathered health insurance quotes are exempt from annual limits. The game of roulette that was getting played by the insurance agencies has, henceforth, ceased to exist.

    • Fights profit-sharing by administrative functions

There are two ways ACA fights the profit-sharing by administrative ends. The ACA ensures insurers to submit any increase in proposed rate of more than 10% on any kind of federal review. When insurers make expenses less than 80% for premiums on individual plan for actual health related expenditure, they have to by law refund all differences the policy holder’s experiences.

    • Insurers cancelling policies, considered illegal

It is illegal according to ACA to cancel any policy whimsically, citing reasons that the applicant left his wealth related irrelevant information unattended or blank. There are only two conditions under which insurers can cancel coverage- absolutely incorrect or faulty information submitted and/or premiums not paid. The reform has made contracts on health insurance much more meaningful.

    • Private insurers need to justify if they process claim denial

Within the Obamacare policy, every private insurer has to cite valid reasons to deny any claim. The claimant, on the other hand, can challenge the decision insurer has undertaken. In case of persistent denials of claim by the company even after an internal review, claimant can ask for an external review using independent organization and overturn this decision.

2006 experienced the maximum number of the US population without any kind of health insurance plans. Almost 17% or 44 million Americans did not have the basic coverage, which means they had to pay the entire sum incurred on any health treatments. Going by the huge expenses incurred in any medical treatment in USA, the data reported was worrisome. The trend showed increase in the count of uninsured, whereas the percentage noted for US citizens without insurance remained steady. This was a clear indication that America was having serious problem in its healthcare sector. After Affordable Care Act (ACA) came into effect, the number of Americans having health insurance has gone up substantially. About 10 million Americans, who were earlier not able to receive health benefits, can now receive annual checkups, birth control and eye glasses etc. It is believed that about 3.6 million people living in USA will receive Medicaid facilities along with a host of other health insurance faculties under its umbrella.

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