Week 8 Term C

October 21, 2021

Position Paper Assignment

Health Policy Issue: Patient Protection and Affordable Care Enhancement Act

Abstract

This position paper explores the rising healthcare costs and proposed legislation to address the issue. Healthcare spending in the U.S has risen over decades and is expected to continue growing. Although healthcare reforms such as ACA, Medicare, and Medicaid program have slowed the growth of healthcare costs in the recent past, the rates are still higher than in other high-income countries. Many research findings have attributed the high costs to administrative waste and high insurance premiums associated with specific ACA provisions. The increase in healthcare costs can affect the economy's critical aspects, including GDP per capita, employment, and households' income, reducing spending and consumption of healthcare services.

Healthcare reforms remain a central theme in presidential campaigns. Democrats proposed the Patient Protection Affordable Care Enhancement Act in 2020 to expand ACA by improving insurance affordability and protecting the population with preexisting conditions. However, Republicans disputed the bill, citing that ACA is a failed regulation that forces Americans to buy unaffordable insurance plans and limits their choices. In my opinion, the proposed bill should be revised and passed to strengthen ACA and promote affordable, equitable, and easy access to care.

Introduction

The United States healthcare costs are one of the highest in the world. Healthcare systems, especially hospitals and pharmaceutical companies, charge more than other developed countries. In 2018, the U.S spent 16.9% as a share of GDP, approximately twice the average of OECD countries (Tikkanen & Abrams, 2020). 

The rising medical spending will inevitably lead to social, ethical, political, and economic concerns. Notably, it will make society more unequal by preventing low-income people from accessing needed care. Also, healthcare costs will hurt the U.S economy. Healthcare spending represents a massive share of government budgets and the economy in unstainable ways. As healthcare expenditure grows, the government must increase taxes or cut spending on other critical sectors like defense and public safety, research and development, education, and infrastructure. Therefore, developing policy efforts is a social, economic, and political imperative and a complement to removing excess costs.

  The Patient Protection and Affordable Care Enhancement Act (HR 1425) was proposed to control healthcare costs and enhance the quality of care. It was introduced on February 28, 2019, under the sponsorship of Craig Angie. The House passed the bill on June 29, 2020. The latest action occurred on September 08, 2020, after the Senate read the proposed legislation and placed it on the calendar under general orders (Congress.Gov, 2021). The bill is designed to strengthen ACA, with an expansion plan by increasing federal financial assistance.

The Patient Protection and Affordable Care Enhancement Act (PPACEA) provides a wide range of measures to improve affordability and marketplace access to health insurance. The bill also includes more funds for states that have not expanded their Medicaid programs to support high-cost and high-risk enrollees to obtain coverage. Therefore, the bill would ensure affordable and accessible care to all Americans by expanding ACA subsidies, relaxing market regulations such as premium tax credits (PTC) and age rating, and eliminating family-based fund outreach and navigators.

Significance and Scope of the Problem

The Patient Protection and Affordable Care Enhancement Act were proposed in 2020 by Democrats in the House of Representative. The initial development of the comprehensive health reform was created in 2010. 111th United States Congress passed the bill, and President Barack Obama signed it as ACA in March. Since its adoption, various alternatives to ACA with revised provisions have been made. In 2016, the Patient Choice, Affordability, Responsibility, and Empowerment Act (CARE) was proposed as an alternative to ACA to modify ACA requirements (RAND Corporation, 2021).

The CARE would loosen regulations on insurers, eliminate ACA'S fees and taxes and remove employer and individual mandates. In 2017, the House of Representatives passed the American Health Care Act (AHCA) as another alternative with amendments similar to CARE. For instance, AHCA would allow repeal of employer and individual mandates, continuous coverage requirements, replace income-based subsidies and change ACA'S age-based bands.

More recently, democrats introduced PPCEA to modify ACA provisions further, especially consumer costs and eligibility requirements for private health insurance plans.

The key driving force for introducing the legislation is the high costs of insurance coverage and tight regulations on insurers. ACA significantly changed the U.S healthcare landscape by expanding Medicaid eligibility creating new marketplaces for individuals without employer coverage and increasing the number of insured by 20 million. However, the Act puts the already stretched healthcare system under further pressure by exacerbating healthcare cost growth. Notably, the ACA individual mandate requires Americans to face government penalties for failing to purchase health insurance, with some exceptions.

This individual mandate often leads to increased insurance premiums and taxes, reducing insurance coverage. As a result, an alternative to the ACA that makes substantial changes was proposed to address the limitations of ACA. Specifically, the Patient Protection and Affordable Care Enhancement Act expands access to tax credits for employees with employer-based family plans by 9.5% of employees' household income (Congress.Gov, 2021). Also, the bill expands CHIP eligibility, funding, enrollment, and quality assurance provisions.

The overall share of the GDP spent on medical care is not a problem because the U.S medical services are worth the costs. However, the escalating costs expose two critical yet overlooked problems. First, high medical costs, stagnant income for many Americans, and the government's inability to raise taxes exacerbate economic and health disparities. Social and economic determinants, race, ethnicity, and heath have long been connected in the United States (Fiscella & Williams, 2004).

Despite improvements in access to care, people with low socioeconomic status and minority groups have higher rates of chronic conditions, experience worse health, and premature death. Also, the rising costs have kept the number of uninsured and underinsured considerably high, with most people citing high insurance costs as the main reason for being uninsured.

Secondly, the costs are too high because of unnecessary administrative complexity. Typical American families waste thousands of dollars on unnecessary administrative processes such as filling administrative intake forms, sorting out insurance bills, and transferring medical records between providers, increasing healthcare expenses. Estimates show that the United States spends two times more than the necessary on billing and insurance-related (BIR) costs, amounting to $248 each year (Gee & Spiro, 2019). Notably, the U.S healthcare system requires consumers to pay overhead costs to providers and health insurance companies for payment processing, claim submission, and claim reconciliation. These administrative overheads for BIR activities increase consumers' insurance premiums.

BIR costs also include administration beyond BIR activities such as hospital management, medical record keeping, and programs to evaluate and enhance the quality of care and mitigate discrimination and accounting misconduct. All these costs associated with BIR and non-BIR administration lead to excess expenditures, which burdens patients. Therefore, the significant waste combined with distribution issues suggests that the federal government prioritize health policy efforts to address medical spending.  

The surge in healthcare costs and considerable variations in access to care have led to economic, ethical, social, and political implications. Healthcare reforms in the U.S have remained debatable over decades. Healthcare has been an essential topic amongst democratic candidates, especially Democrats, focusing on the need for Medicaid reform and expansion, behavioral healthcare reforms, staffing issues, and high provider and pharmaceutical costs. For instance, in the 2020 elections, healthcare reforms, including the future of ACA, healthcare costs, abortion, and the economic and public health response to Covid-19, took the front seat.

Weeks after the election, the U.S Supreme court in Texas v. California case did not agree with Trump's administration proposal to repeal and replace ACA. The national political polarization has hindered progress on healthcare reforms, forcing individual states to actively pass new legislation aimed at healthcare costs and quality

Consequently, the Patient Protection and Affordable Care Enhancement Act seeks to support these states by providing financial assistance to support the establishment of state efforts such as reinsurance and subsidy programs in their marketplaces.

Also, the high healthcare spending adversely affects the economy by reducing income for other goods and services. The growth rate of healthcare spending has grown at a faster rate than GDP, inflation, and population for years. For instance, the share of GDP on healthcare spending from 12.25 in 1990 to 16% in 2005 (Glied et al., 2020). Similarly, healthcare spending grew from 16% to 18% in 2020, reaching 3.8 trillion (Glied et al., 2020). This is a project to keep growing, and total spending will hit 20% of GDP in 2028. The growing healthcare costs could hurt American workers by reducing their access to care, destroying their jobs, holding down their wages, and depleting their retirement savings.

The primary concern is that vital economic aspects, including employment, inflation, and GDP per capita, will influence all economic sectors. These sectors: business enterprises, households, and governments contribute to the financing, delivery, and consumption of healthcare services. They are interdependent in that the governments raise tax revenues from businesses to help in funding healthcare services. Correspondingly, public hospitals deliver medical services to households. Also, business organizations employ households and give employer-sponsored insurance plans to enable them to bear healthcare costs.

Consequently, the rising healthcare costs might prompt governments to raise and reduce eligibility for public health insurance, increasing the number of uninsured households. Besides, the government might attempt to cover rising healthcare costs by increasing borrowing and reducing investment in other vital sectors like infrastructure, education, and public safety, affecting businesses and households and suppressing economic growth.

Moreover, high healthcare costs could lead to social and ethical issues. Significantly, increased medical spending widens socioeconomic disparities in health care access.

The healthcare system's three main categories of health inequalities are discrepancy in health itself, access to care, and health insurance coverage (Powell, 2016). Disparities in health manifest in the higher rates of chronic medical conditions, including cancer, diabetes, heart disease, hypertension, and asthma, among other groups than others. Inequality in care involves variation in accessing skilled physicians, hospitals, proper procedures, essential medicine, and medical technology among different groups.

Health insurance inequality results from financial means, eligibility requirements, and regulations for buying insurance coverage. These three inequalities are demonstrated in the core healthcare measure, life expectancy, which significantly varies in the U.S depending on residents' socioeconomic status, race and ethnicity. This has divided the U.S into two countries by dividing the wealthiest and unhealthiest populations. The income-based gap between the rich and the poor has widened considerably following the rising healthcare costs.

Balancing the quality, access, and healthcare expenditures is an ethical dilemma that healthcare providers must continually engage in in the U.S. Primarily, the U.S uses a multipayer healthcare system that involves employers, private insurance companies, patients, and others who share payments for patient care. Because different parties coordinate and dispense payment for health care, some individuals, especially low-income households, lack medical services.

Motivated by profits, providers in the United States are compensated with higher average rates than their peers in high-income countries, making healthcare more expensive in the U.S than their counterparts. In addition to medical care, prescription drugs are more expensive in the U.S, accounting for 17% of the total healthcare costs (Rice University). The current state of the U.S healthcare system raises the ethical issue of what happens to many low-income citizens who cannot afford healthcare. This question continues to roil politics and society as citizens, especially those with limited or no insurance coverage, cut medical attention even if it places them at more significant health risks.

Skipping medical services due to cost considerations is an ethical problem to providers and employees because employers have an ethical obligation to do everything to provide coverage to their employees. At the same time, health professionals should keep everyone in good health. Therefore, the ethical debate over universal coverage and access to healthcare is centered on the extent to which employers should make health insurance to their employees available at affordable prices.

Proponent and Opponent Arguments

The Patient Protection and Affordable Care Enhancement Act have received support from Democrats with 234-179 votes to pass the bill. Many house Democrats are motivated to reinforce ACA in light of Covid-19 to strengthen protections for people, especially those with preexisting conditions. They have vehemently opposed Republican-backed efforts to invalidate ACA in Texas v. the United States, citing that it is repulsive to tear down ACA during a global pandemic. The House Majority Steny H. Hoyer (D-MD) highlighted the positive outcomes of ACA since its adoption in 2010.

He cites that more than 20 million Americans have gained new health insurance, and health costs have slowed. Supported by Hoyer, Rep. Richard Neal (D-Mass.) mentions that expanding Medicaid provisions through this bill would encourage four million more Americans to obtain insurance coverage by incentivizing states that have not implemented Medicaid expansion (Cohrs, 2020). They also argue that the public health and economic impact of Covid-19, especially the spike in unemployment rates, should signal the nation to strengthen ACA.

Additionally, Democrats argue that the Proposed Act extends beyond healthcare to fight for financial security and racial equality.

Section 101 of the Act requires states to provide premium tax credits to customers whose income is above 400% of the federal poverty line (FPL) to ensure affordability and expand access to health insurance (National Coalition of Healthcare, 2020). The initial phases of the pandemic disproportionately affected racial minorities, especially the black community. As such, expanding premium assistance and reducing drug prices via Fair Drug Price Negotiation Program, as stated in Section 301 of the Act, will improve insurance affordability for these communities.

Besides, the Proposed Act would strengthen the Medicaid program by guaranteeing 12 months of Medicaid and CHIP eligibility. Also, it would provide additional reimbursement for specific services in primary care. Generally, Democrats criticized Republicans for repealing ACA without providing a detailed alternative plan to replace ACA.

In rebuttal, the Republicans directly opposed the Proposed Act, arguing that the pandemic does not change that ACA is an unlawful failure that forces Americans to purchase unaffordable health insurance plans while limiting their choices. They also argue that the drug pricing measure would reduce drug makers' research and development budgets, suppressing innovation, especially during the pandemic when breakthroughs are vital. Besides, Republicans called for a unified front by urging Democrats to end Trump's uncertainty by introducing a bill that cut off individual mandates from the ACA. They maintained that Democrats should continue working with the president instead of diving back into partisan games to make the country emerge more potent than ever during the pandemic.

Nursing's Perspective

The high costs of healthcare affect everyone, including nurses and other professionals. Nurses offer unique, expert perspectives on every aspect healthcare system and actively advocate for ongoing efforts to improve public health. Many nurses and healthcare providers argue that U.S healthcare's structure and incentives focus on technology and procedure, leaving limited time for communication, external relationship building, inquiry, and reflection (Boufford et al., 2002).

Consequently, these regulations add to nurses' costs and create additional tensions that hinder collaboration between healthcare delivery systems and state public health agencies. The collapse of healthcare reforms efforts in the 1990s has created loose structures and highly competitive markets in healthcare services that do not support interaction with other components, especially governmental health agencies. For instance, all states have the legal authority to monitor health care services in the public and private sectors. Also, state health departments control providers' ability to perform costly procedures and acquire desired technology, which is crucial to hospitals, increasing state revenues.

In addition, the governmental public health agencies are responsible for providing primary healthcare services to the poor and special populations when such services are delayed in the private healthcare sector. This default consumes resources and impairs health agencies' ability to perform other tasks. The nurses also cite that they face vast and complex billing requirements requiring costly administrative help for reimbursements and billings. This creates high administrative wastes. These structural problems confronting the healthcare system reduce the capacity to provide affordable, equitable, accessible, and quality care, reducing its effectiveness in promoting the nation's health.  

Nurses support the implementation of policies that reflect the principles of healthcare reforms. As frontline providers of care delivery, nurses have the closest view of changes in healthcare and their impact on patients. A research study found that approximately 48 % of nurse respondents have encountered adverse effects with ACA in providing patient care. The primary reason cited for the perceived flaw with ACA is nurse burnout associated with a vast array of procedures and record-keeping brought by increased insurance coverage. One respondent argues that giving someone an insurance card with little or no provider access makes no sense.

Billing and reimbursement processing consume much of nurses' time, leading to difficulty booking appointments, shorter visits with providers, and longer wait times.

Furthermore, nurses suggest that ACA has reduced costs for a small portion of the population, but overall healthcare costs for patients and providers remain high. As a result, nurses advocate for ACA changes to incorporate provisions to remove barriers to practice for advanced practice and other nurses. Mainly, nurses need legislation that eliminates regulations on insurers and resolve nursing shortage to allow them to engage with their patients. The Proposed Act provides an opportunity for such reforms as it protects critical elements of ACA while rescinding insurance regulations and expanding subsidies and eligibility requirements.

In my opinion, high healthcare costs have an enduring impact on health quality and outcomes. The costs of healthcare adversely affect Americas' medical and personal decisions. For instance, high costs strike fear in patients, causing them to forego recommended tests or treatment or choose less expensive options. Consequently, poor care worsens the public, especially for people with chronic illnesses. As a result, ACA should include additional elements that focus on controlling spending growth and increasing access to medical services for all Americans.

Bill Recommendations

The Patient Protection and Affordable Care Enhancement Act has four primary goals: making health insurance affordable to many Americans, protecting people with existing medical conditions, strengthening the Medicaid program, and lowering overall healthcare costs. The Proposed Act provides states with subsidies lower costs for households, including those with income above 400% FPL. Although ACA provides low and middle-income consumers with subsidies to promote enrollment, the individual mandate reverse the gains by requiring Americans to obtain coverage or pay fine.

Also, the Act expands the Medicaid program by increasing primary care reimbursement and strengthening subsidies and eligibility requirements to state-level exchanges. Lastly, the bill seeks to lower healthcare costs by creating the Fair Drug Pricing Program, nullifying short-term, limited-duration insurance plans, increasing federal assistance, and permissible family income threshold.

 I would recommend that the president pass the law with specific modifications. Firstly, the legislation should repeal or replace the individual mandate. ACA employs a combination of reward and punishment to encourage people to enroll. While subsidies are progressive and provide significant funds to low-income consumers, the individual mandate is intrusive and burdensome. The 12-month continuous insurance coverage can serve as a motivator to encourage individuals to stay enrolled even when they are healthier. Also, the proposed Act should revise premium tax credit by incorporating a premium formula that sets premium and credit independently. The advanced ACA formula for evaluating tax credits requires members to pay maximum premiums following their income levels (RAND Corporation, 2021). However, this model will not be sustainable in the future and might not shield enrollees from sharp increases in premiums.

The bill should change the age bands. Requiring older people to pay more than the younger population (5:1) would motivate young people to buy insurance at the expense of older ones. Age is not always a factor for determining vulnerability to diseases, and the bill should encourage both young and older people to stay enrolled. Also, the Act should simplify billing and reimbursement processing and regulations to cut unnecessary administrative costs.

Conclusion 

Overall, enacting the Patient Protection and Affordable Care Enhancement Act with recommended changes would motivate states to modify ACA's minimum requirement in their marketplaces. Eliminating individual mandates and implementing a premium support model for calculating premium credits would reduce overall premiums, increasing the number of people buying insurance coverage.

Consequently, high insurance rates promote affordability and access to medical services. Besides, establishing a detailed billing submission and claim reconciliation process helps harmonize quality reporting and enhance data interoperability in the healthcare system. Therefore, health care cost growth is a manageable problem that can be improved through effective regulations on spending and pricing.

References