Health care was hot in the news in 2009 and 2010 as the Democratic Congress and the Obama Administration tried to pass the first major health care reform legislation in decades. They mostly succeeded, producing the Affordable Care Act, and health care will continue to be in the news as the provisions of the new law come into effect between 2010 and 2014. The Affordable Care Act preserves for-profit health insurance in America, but corrects many abuses and inefficiencies, and brings health insurance to all Americans.
Need for Reform
Democrats had wanted to reform the health care system ever since President Franklin Roosevelt failed to pass universal health care in the 1930s. They enjoyed some successes, most notably the creation of Medicare in the 1960s, but had failed to achieve universal health care by the time Obama came into office in 2009. Meanwhile, the existing health care system had been breaking down from rising costs. As a presidential candidate, Obama had promised to make health care reform a top legislative priority, and that's what he did, embarking on a reform agenda shortly after entering office. Democrats controlled Congress with large majorities in both houses and shared the new president's desire to pass reforms.
Writing, Passing, and Keeping Affordable Care Act
The Affordable Care Act was originally intended to be a comprehensive health care reform bill, targeting problems throughout the health care sector. However, conservative obstruction from both parties forced Democratic leaders to narrow the scope of the final bill, focusing primarily on health insurance reform. They abandoned any push for a single-payer national health care system, and even scuttled the highly popular "public option" provision that would have allowed Americans the choice of buying public rather than private health insurance.
These concessions won enough votes from conservative Democrats for the legislation to pass Congress, but not a single Republican voted for it. President Obama signed it into law in 2010, bringing universal health care to the United States. Conservatives challenged the law's constitutionality in federal courts, with mixed rulings that are likely to lead to a final decision by the Supreme Court. Republicans in Congress vowed to try and repeal the Affordable Care Act.
Key Provisions of the Affordable Care Act
Each of the 50 states gets a "health insurance exchange" for people who do not have employer-based health insurance to buy a policy commercially. The goal is to increase market competition and economies of scale. The exchanges ensure that all policies adhere to government standards.
Almost everybody is required to buy health insurance, or else pay a fine. Americans will enjoy a new liability cap that will prevent them from medical bankruptcy in the event of an expensive health emergency. Health insurance companies have to offer the same premiums to everybody, ending the practice of exploiting pricing based on people's sex, age, and pre-existing health conditions. Insurers are limited in when they can deny coverage to their customers.
Medicare is expanded to cover more low-income people. Those who earn too much to qualify, but are still low-income generally, get subsidies to buy private insurance.
Businesses that refuse to offer employer-based health insurance to their employees have to pay a fine if the government has to subsidize commercial policies for any of these employees.
Annual and lifetime coverage caps get eliminated, and co-pays get eliminated for essential health care services. The Medicare prescription drug doughnut hole gets closed.
Financing the Affordable Care Act
According to reports by the "Christian Science Monitor," the Affordable Care Act pays for itself primarily at the expense of the rich and powerful, with higher Medicare taxes for those who earn $200,000, new taxes on expensive private health insurance plans that consume disproportionate health service resources, and new taxes on drug companies, private health insurers, and medical device manufacturers. Alongside the taxes, the government is cutting costs by reducing subsidies to private insurers that offer alternative policies to Medicare and reducing Medicare funding to hospitals and home health care providers. Projections by the Congressional Budget Office shows that the Affordable Care Act will actually save the government more money than if it had done nothing.
Tags: Affordable Care, health insurance, health care, health care, care reform, care system
