Draft

Journal of Innovation and Entrepreneurship

Hester Journal of Innovation and Entrepreneurship (2017) 6:18 DOI 10.1186/s13731-017-0076-x

COMMENTARY Open Access

The successful innovations of the affordable care act of 2010

Ronald D. Hester1,2

Correspondence: rhester@fiu.edu 1Clinical Assistant Professor in Health Services Administration, Nicole Wertheim College of Nursing & Health Sciences, Florida International University, Miami, Florida, USA 2U.S. Department of Health and Human Services, D, Washington C, USA

© L p i

Abstract

The purpose of this article is to describe the innovative strategies that were used to develop the first National health insurance program in the United States. The first innovative provisions was the development a fund to expand health coverage under the State Medicaid programs to expand coverage through most Medicaid State Health Plans. The establishment of a new innovative structure of premium subsidies to expand private health insurance for many uninsured Americans, to purchase a Subsidize health plan was the second innovated approach, to finance health insurance to those that were previously uninsured. Unlike most Western nations, that finance health insurance through a national tax or income tax, the American innovative approach relayed on providing government subsidies for individuals to purchase private health insurance plans and/or expand coverage under the existing Medicaid program. This innovated strategy has been very successful to greatly reduce the number of uninsured Americans to be at the lowest since records have been maintained on this topic. However, this program has been successful to lower the number of uninsured Americans, many have opposed this innovated strategy as it relies too much on government subsidies to reduce the number of uninsured. Now efforts are under way to repeal and replace the innovative strategies that have increased the number of insured in the United States.

Keywords: Obamacare, Health Insurance., Tax subsidies., Uninsured Americans.

Background The partisan debate over the Affordable Care Act of 2010 (ACA) and the provisions

included in the law ignore the success of the new law’s achievements in the field of

public health. There have been great strides in public health as a whole, because many

low-income uninsured Americans relied solely on remedial emergency care. This was a

direct result of their inability to pay. Under the ACA, they gained access to health in-

surance protection enabling them to secure preventive and timely emergency care

benefitting all of society. The ACA developed innovative strategies that gave these

same individuals, when eligible, the ability to obtain subsidies and tax credits so they

might purchase health insurance for the first time (Glied & Jackson, 2017).

Health insurance is not the same thing as good health. Current data from the Centers

for Disease Control and Prevention demonstrates how the program, through expanding

coverage, extended patient lives reduced the number of individuals that relied on our

The Author(s). 2017 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International icense (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, rovided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and ndicate if changes were made.

Hester Journal of Innovation and Entrepreneurship (2017) 6:18 Page 2 of 4

public health system for their basic medical care and reduced the number of uninsured in

the United States. (Kaiser Family Foundation, 2016).

For example, as of 2015, because of the ACA, around 137 million Americans were

guaranteed preventive services without cost sharing. Small group and individual insur-

ance plans are required to cover 10 Essential Health Benefits such as blood pressure

screenings, well care visits, vaccines, and preventive maternal and child health coverage

to improve the health of infants and children.

Consequently, this has placed less pressure on our capricious public health care sys-

tem. In the first 9 months of 2016, only 8.8% of Americans lacked health coverage com-

pared with over 23% lacking health insurance when the program begin in 2010. This

data is based upon survey data from the Kaiser Family Foundation. (Kaiser Family

Foundation, 2016).

The individual mandate provision under the ACA, requires all Americans to have

health insurance or pay a fine (Brooks, 2016). Securing medical insurance facilitates

the access to the medical care they need. In the past, public hospitals and clinics

were the “provider of last resort”. For those individuals that could not afford or

were not eligible for Medicaid, the ACA provided subsidies for the purchase of pri-

vate health insurance plans. The health law provisions further reduced the number

of individuals who did not have health insurance at their place of employment.

The share of unemployed adults declined from 18.4 percentage in 2013 to 9.3% in

the first 9 months of 2016. One of the primary ways this was achieved is through

the creation of online health insurance markets. Government subsidies allowed in-

dividuals to obtain health insurance plans at a lower cost from these insurance

marketplaces. As a result, the number of individuals filing for bankruptcy because

of their ability to pay for their physician and hospital bills declined sharply. (Katz,

2017a) The Affordable Care Act made health insurance achievable and affordable

for many low-income and disabled Americans.

The Affordable Care Act provided additional Federal Medicaid funds to cover Thirty-

Five State Medicaid Plans that agreed to participate in the Medicaid expanded program.

Under this program Medicaid coverage was expanded to any American earning less

than $ 16,000 per annum as a single person or $35,000 for a family of four (Rawal,

2016). Political discord and partisanship resulted in 16 State Governments refusing to

participate and not receiving the additional Medicaid Federal funds. This action prevented

the enrollment of over 10.1 million low-income Americans, to the expanded Medicaid

program (Katz, 2017b).

One of the signature innovations of the law was that it prevented health insur-

ance companies from denying coverage or charging higher insurance rates to indi-

viduals with a preexisting condition or health condition that required excessive

treatments and procedures. This innovation program helped lower the cost of hos-

pital, physician, and laboratory services for individuals who are disproportionate

users of the health care system. The ACA set a standard for the minimum guaran-

teed package of benefits offered by various insurers (Bowen, 2017). This provision

further guaranteed that preventive health services would be available in the health

plan, without co-payments. The ACA of 2010, also allowed young people to remain

on their parent’s health plan until age 26. This provision encouraged many to sup-

port the health care reform.

Hester Journal of Innovation and Entrepreneurship (2017) 6:18 Page 3 of 4

The law made efforts to insure that healthy people would enter the market place

through an individual mandate provision. This required all Americans to have health

insurance protection and those whorefused coverage would be subject to a tax by the

Internal Revenue Service (Affordable Care Act, 2010).

One provision of the ACA raised taxes on higher income individuals in order to help

finance the new health care provisions improving access to primary care services. In

addition, improving reimbursement incentives for hospitals participating in the Medi-

care program was another important provision. These new incentives were established

for both hospitals and physician group health plans, as an incentive to improve the

quality of care in healthcare settings. In order to promote higher quality of care, studie

by RAND, a health policy research center, explored and presented new strategies to

lower Medicare reimbursements and compensate providers for higher quality of care

(RAND, 2016). The new incentive payment strategies have been implemented and have

achieved savings for the Medicare program. Other major provisions of the new law

stopped drug companies making payments to individual physicians and required large

chain restaurants to publish calorie counts on their menus.

The new health care law placed greater emphasis on expanding the availability of pri-

vate health insurance, but at the expense of our existing public health care system.

Most State and County governments have been struggling to maintain quality public

health care systems (Brill, 2015). The expansion of the State Medicaid program through

more Federal funds helped State governments increase the number of individuals

eligible for Medicaid coverage. Most of these individuals were served in private hospi-

tals and physicians group health plans. The result has been that many States and

County governments have closed Public General Hospitals and community health cen-

ters in their communities. Consequently, one of current successful innovations of the

ACA, is the availability of the private health care marketplace, with a decline in the

utilization of the public health system to serve our underserved populations. On the

other hand, this program had a positive impact on public hospitals and clinics because

many of their patients now had the means to pay for their care rather than it being a

charity care case, or as described by the providers a “no pay” case, and a financial loss

to the provider. This is just one example of how the law increased entrepreneurship,

through expanding small health insurance plans to cover more patient lives and better

compete with the larger health plans. Other examples included the ability of research

firms to compete for CMS research and development grants to develop innovative

approaches to improve the quality of care in hospitals and develop incentive reimburse-

ment strategies to lower the cost for the Medicare and Medicaid programs.

Conclusion The continuing efforts to repeal and replace the Affordable Care Act proposes to roll

back the successful innovations of the law, reducing the ample impact this law has

achieved in improving the American health care system. Any repeal would place greater

pressure on the nation’s public health care system and non –profit health care facilities

that serve the poor and disabled populations. Since enactment, the ACA has resulted

in more children and young adults having access to quality medical service to prevent

and treat serious illnesses. Many low-income Americans are receiving more quality

medical services than even before, slowly improving the nation’s health status and

Hester Journal of Innovation and Entrepreneurship (2017) 6:18 Page 4 of 4

longevity rates. With the recent actions by the Congress to not make any changes to

this vital program, we can only hope that the Congress and the President will agree

upon a compromise plan in the near future. Any efforts should be made to address

concerns and improve the ACA rather than repeal it. That action would have a major

impact on providers to provide quality health care to millions rather than increase the

number of uninsured individuals with no access to care in the United States.

Acknowledgements I wish to thank Mr. Alan Gold and Ms. Susan Greenwald from Global Health Systems, Inc., for their support in the development of this manuscript.

Funding No funding support for this manuscript was made available.

Competing interest The authors declare that they have no competing interests.

Publisher’s Note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Received: 14 April 2017 Accepted: 19 July 2017

References

Bowen G. Recent Evidence on the ACA and Employment: Has the ACA Been a Job Killer? New York Times. February 15, 2017. Brill, S. (2015). America’s bitter pill, money, politics, backroom deals, and the fight to fix our broken healthcare system. New

York: Random House. Brooks, R. (2016). Understanding the affordable care act. New York: Robert Brooks. Glied, S., & Jackson, A. (2017 April). The future of the affordable care act and insurance coverage. American Journal of

Public Health, 107(4), 538–540. Kaiser Family Foundation, Uninsured Rate Among the Noneldery Population, 1972–2016.Menlo Park, CA : 2016. Katz M. Grading Obamacare: Success. Failures and Uncomplexities. New York Times. February 3, 2017a. Katz M. The Biggest Changes Obamacare Made, and Those That May Disappear. New York Times. January 13. 2017b. P 1. RAND. (2016). Effects of the ACA’s Medicaid expansion on health insurance enrollment. Santa Monica: RAND. Rawal P.H. The Affordable Care Act: Examining the Facts: Examining the Facts. ABC-CLO. 2016. The Affordable Care Act of 2010. The U.S. Government Printing Office. Washington, D. C. 2010.