Health Care Law and Legislation, Statistics Policies
Chapter 10
Health Reform in the United States
Chapter Overview
- Discusses the history of health reform in the United States and details the key provisions of the Affordable Care Act (ACA)
- Focuses on:
- Previous attempts at national health reform
- Why health reform is difficult to achieve
- The passage and provisions of the ACA
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Health Reform
- There have been numerous health reform attempts in the United States.
- Prior to 2010, all attempts at national health reform to create universal or near-universal coverage have failed
- Some successes at the state level
Health Reform—Difficulty of Reform in the United States
- Individualistic culture
- Dislike of big government
- Lack of consensus
- Federal system rules and structure make it difficult to achieve major reform
- States generally home to social welfare issues
- Powerful interest groups against national health reform
- Path dependency
Health Reform—Key Failed Attempts at National Health Reform
- 1912 Progressive Party candidate Teddy Roosevelt supported social insurance platform that included health insurance
- 1915 American Association for Labor Legislation proposal for working-class health insurance
- President Truman supported national health reform upon taking office, won re-election on national health insurance platform in 1948
- President Nixon: initial health reform proposal in 1969 and revised proposal in 1972
- President Clinton Health Security Act in 1993
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The Affordable Care Act
(1 of 3)
- Why did the ACA pass when so many prior attempts had failed?
- Commitment and leadership
- Learned lessons from past failures
- Political pragmatism
The Affordable Care Act
(2 of 3)
- Individual mandate—most people have to purchase health insurance or pay a penalty starting in 2014
- Exemptions for certain populations and based on affordability
- Penalty for individual mandate repealed in 2017 Tax Cut and Jobs Act
- Controversy
- Too much government interference in private lives?
- Constitutional?
The Affordable Care Act
(3 of 3)
- State Health Insurance Exchanges
- American Health Benefit Exchanges for individuals
- Small Business Health Options program for small businesses
- Effectively ended in 2018; may be revised
- Must offer essential health benefits (abortion compromise)
- Four cost levels for plans based on actuarial value
ACA: Premium and Cost Sharing Subsidies
- Premium tax credits available for individuals who purchase insurance in an exchange and have income between 133% and 400% of poverty
- Cost-sharing subsidies available for individuals who purchase insurance in an exchange and have income up to 250% of poverty
- To qualify, must be a U.S. citizen or legal resident, not eligible for any type of public insurance, and not have access to employer-sponsored insurance
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ACA: Employer Mandate
- In 2014, employers with 50 or more employees must provide affordable health insurance or pay a penalty.
- Insurance is affordable if it has an actuarial value of at least 60% or is not more than 9.5% of an employee’s income.
- Penalty is per employee after first 30 employees.
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The Affordable Care Act (ACA)
(1 of 2)
- Private insurance market changes
- No preexisting condition exclusion
- Dependent coverage to age 26
- Preventive services without cost sharing
- Prohibitions against lifetime and annual coverage limits
- No rescission without fraud
- New appeals process
- Premium rate reviews
Sue Kauffman (SK) - Should slides 11 and 12 be a part of slides 6-8?
The Affordable Care Act (ACA)
(2 of 2)
- Private insurance market changes (cont.)
- Guaranteed issue and renewability
- Rate variation limits
- Essential health benefits
- Wellness plans
- Some plans may be grandfathered in and not subject to all of these changes
ACA: Financing Health Reform
(1 of 2)
- Changes to Medicare provider reimbursement
- Changes to Medicare Advantage reimbursement
- Medicare Part A increases for high earners
- Changes in Medicare Part D subsidies
- Changes in Medicare employer subsidy
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ACA: Financing Health Reform
(2 of 2)
- Changes in disproportionate share payments
- Increase Medicaid prescription drug rebate paid by manufacturers
- Income tax code changes
- Health industry fees
- Tax on high-cost health insurance plans