LESSON 8.1

Few laws in the past decade have had as much of an impact as the Patient Protection and Affordable Care Act (commonly called the Affordable Care Act or Obamacare). President Barack Obama signed it into law on March 23, 2010 (U.S. Department of Health and Human Services, 2014). The Patient Protection and Affordable Care Act (PPACA or ACA) mandates that everyone must have health insurance coverage (U.S. Department of Health and Human Services, 2014). It also limits the conditions and terms under which insurance companies can offer coverage. Prior to the act, insurance companies could decide who they wanted to insure and why. Pre-existing conditions would exclude patients from any type of affordable health insurance. Insurance companies could also limit insurance by age. While this new type of universal healthcare coverage is a far cry from the comprehensive systems of other industrialized nations, it is seen by some as the first step in creating an effective and affordable system of insurance for everyone.

The law, however, has not been without its critics and legal challenges. One of the most controversial provisions of the plan requires that all Americans buy insurance, either through their employer or through a series of options provided by a marketplace called an exchange.

This provision of the law was highly contested and was the basis for many lawsuits, including one that went all the way to the Supreme Court of the United States. The court ruled that the government, under the Constitution, has the power to require the mandate. The Constitution clearly enables the government to tax the people and spend the money for the benefit of the nation. The Supreme Court ruled that the mandate was a form of taxation and, as such, it was constitutionally valid.

Another provision of the ACA that was brought before the Supreme Court was the requirement for states to include more people on its Medicaid insurance programs. The opponents of the ACA argued that expanding the list of eligible people under the state-run Medicaid program was a violation of states’ rights. While the law required states to include more people on Medicaid insurance, states argued that there was no guarantee that the federal government would provide the necessary funds to the states to cover their costs.

After all the legal charges were brought and heard, the U.S. Supreme Court ruled that the individual mandate for all Americans to have insurance was valid, while the required expansion of the states’ Medicaid insurance programs was not. These rulings served as the foundation for the ACA. The ACA was not drafted and implemented overnight. It is a product of many attempts to maximize the resources of our healthcare system while maintaining affordability for the majority of Americans.

As a new government administration moves into place, the future of the law is uncertain. The law has many detractors that are focused on repealing the law with the intention of replacing it with a more affordable option. The ACA offers many benefits including extending coverage to individuals who were not previously able to afford coverage. It also extends the option of coverage to eligible adult children. These popular provisions are paid for by the less popular provisions, including the individual mandate as discussed above. This means that any attempt to repeal the law without a suitable replacement could destroy the delicate balance between eligibility and affordability that the current law was designed to offer.

The first attempt at health care affordability and cost containment was managed care. Managed care is not uniquely American. Different forms of managed care are used throughout the developed world. Here in the United States, managed care is used to control costs by controlling and limiting direct access to healthcare resources. While managed care has many benefits, most people object to limitations of health care in any form.

Managed care is offered through various plans including, but not limited to, health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point of service plans. Typical managed care organizations offer different access options, but all have their individual limitations. Most Americans are opposed to any healthcare limitations even if it reduces the overall cost of care.

For example, many employers offer a variety of plans. Jan has open enrollment and must review her choices and select a plan. Jan has a few choices. She can select an HMO, which requires her to choose her own physician and get approval to see any other provider. She can choose a plan that has a network of providers that she can see any time without restriction, but she will pay higher rates if she seeks treatment from any provider outside this network. She can choose a plan that has the benefits of both with the same gatekeeper restrictions beyond preapproved medical providers. Finally, she can choose the most expensive plan with few restrictions or limitations on access. Jan is single and is in excellent health. Any of these plans would provide comprehensive coverage for her. Jan, like most Americans, is scared that limiting her choices will limit her coverage. She selects the most expensive plan in order to maintain the possibility of not having any restrictions if she needs to use the health insurance. Jan does not truly understand the cost of her selecting the most expensive care when she does not need it. Jan is overpaying with her premiums. As a result, she feels compelled to maximize her investment. She requests expensive tests and procedures that are not medically necessary because she feels she is paying so much for her insurance. This in turn raises costs and premiums for everyone.

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The cost of health care in this country has largely been masked to most Americans. Since health insurance is often tied to work, employees do not usually see or feel the actual cost of their health care. We have relied upon the current healthcare system for decades. By tying our health care to the workplace, we have disguised the true cost of our growing healthcare demands. There are, of course, many complicated factors that have brought us to the place we are now with our national healthcare system.

The ACA was created to provide insurance nationwide to everyone, not just those who are employed or those who could afford it. There are many provisions that people like and do not like. The future role of government in the American healthcare system remains to be seen.

Tort Reform

One of the intended benefits of a national healthcare plan is to reduce healthcare costs and overall expenses. Health care is a litigious field. Doctors, hospitals, and other providers maintain medical malpractice insurance coverage to limit their risks and exposure.

Tort reform can include any number of limitations. These laws can limit plaintiffs’ recovery to an exact dollar figure or a percentage. They can dictate exactly what a patient can sue for, or they can limit recovery within certain categories. Nationally, the laws on tort reform vary drastically.

The rise of expensive malpractice litigation has led to providers practicing defensive medicine. Defensive medicine is the approach providers may take to limit their liability when treating patients. Defensive medicine encourages providers to run multiple, redundant, and often unnecessary tests and treatments in order to make sure the patient does not sue for malpractice. These tests and treatments are designed to rule out many different diagnoses regardless of how small the probability is that the patient might actually have the illness. The practice of defensive medicine is another contributing factor to out-of-control healthcare costs.

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