The Affordable Care Act (ACA) was signed into law by President Barack Obama early in 2010. The ACA was introduced into law to help provide access to affordable and quality health insurance to more Americans than ever before. The goal was to reduce health care cost for individuals and government. It has allowed more adults to be eligible for Medicaid by increasing income eligibility to 138 percent of the Federal Poverty Level (FPL). (Milstead, 2013) However, by ruling of the Supreme Court in June of 2012, states had the option to implement the expansion of Medicaid eligibility to cover more low-income adults. As of January 2014, North Carolina (NC) was one of the states that chose not to implement the expansion of Medicaid making the eligibility for Medicaid for low-income adults very limited. How does this affect the population, economy, cost, and quality of health care?
North Carolina’s Right to Refuse
According to Knickman and Kovner (2011, p. 110), “the 10th Amendment to the U.S. Constitution gives states the primary responsibility for public health. Medicaid is administered and overseen by each state but governed by various federal guidelines with the federal government contributing 50%-78% of its costs. (2011) After long debate and review of advantages and disadvantages to implementing the new laws, the North Carolina’s government elected not to adopt the new legislation.
Caroll (2013) indicated the decision was based on NC’s current Medicaid system, indicating that is was broken and needing to be revised. There was concern the ACA would cause an increase in taxpayer’s contribution due to the long term costs. As of September 2014, there are 21 states that are following North Carolina’s decision not to adopt the new health care reform. This would leave millions of Americans that would be eligible for Medicaid under the ACA without access to health care. (StateReforum, 2014)
Impact on the Population
One of the initiatives of the ACA was to provide more than 32 million uninsured Americans with insurance coverage. This was to be done by increasing the FPL to 138 percent and lifting or altering certain limitations for eligibility to Medicaid. This meant that all Americans whose income was at or below the FPL would be eligible for Medicaid. For example, an unemployed, single, 26-year-old male without any other income would be eligible for Medicaid. Medicaid would no longer be limited to specific categories such as the disabled, children and their parents, or pregnant women whose income was below the FPL.
North Carolina’s current Medicaid program “eligibility for non-disabled adults is limited to parents with incomes below 43% of poverty, or about $10,000 a year for a family of four, and adults without dependent children remain ineligible regardless of their income” (How Will the Uninsured, 2014). Currently, there are over 319,000 uninsured adults in NC that are not eligible for Medicaid, by the current NC guidelines, which would be eligible under the Affordable Care Act. This can lead to increased health care costs and weighs heavily on the economy. Who is to take up the slack?
Economic Effects of Doing Nothing
Dorgan (2009), Chairman of the Democratic Policy Committee, indicates that the current health care system in NC has “led to higher health care costs, reduced access to care, and inconsistent quality of care”. The Gross Domestic Product in 2013 for North Carolina, based on millions of dollars spent, was $471,365 million, an increase of over $50,000 million since 2010. (Department of Labor and Workforce, 2013) In 2013, North Carolina’s State Auditor Beth Wood indicated that the state’s Medicaid program had gone over budget for the past three years, costing taxpayers about $1.2 billion. (Hoban, 2013) This leaves businesses and the working population to cover health care costs by paying higher taxes.
With unemployment soaring over the last decade, and North Carolina having one of the highest unemployment rates in the United States (Hoban, 2013), less is paid into taxes. This leads to less to cover health care costs. The Affordable Care Act was implemented to decrease the costs of health care for all Americans. According to the White House website (2014) “the Congressional Budget Office found that health insurance reform will reduce the deficit by $210 billion in this decade and by more than $1 trillion over the following 10 years. A family of four would save as much as $2,300 on their premiums in 2014 compared to what they would have paid without reform”. Will the decreased costs affect the quality of care being provided?
Quality of Care
The implementation of the ACA will require a higher standard for quality of care. The ACA promotes the use of accountable care organizations (ACO), which is a type of managed care that includes at least primary physicians, specialists, and hospitals that would be held accountable for the quality of care provided. (Kovener and Knickman, 2011, p. 196) The ACA works to move away from a fee-for-service approach to an accountable care organization (ACO) model that would incorporate a coordinated approach to provide high quality of care. This type of system rewards physicians and health care facilities through how they are paid for the quality of care they provide.
The ACA reforms the way health care is delivered to the population by “creating high-performing organizations of physicians and hospitals that use systems of care and information technology to prevent illness, improve access to care, improve safety, and coordinate services” (What is an Accountable Care, 2011) making them more accountable for the care they provide. Incentives are provided to physicians and healthcare organizations that have shown they can provide quality care and improve patient satisfaction.
How can the government provide quality health care to so many without sacrificing the rights of a few? The ACA was enacted to help provide health care to more adults between the ages of 19-64 years of age that otherwise would not have access to or afford health care. According to Sorrell (2012), Americans want a health care system that will provide quality care, have freedom of choice, be affordable, and allow the costs to be shared among all. There is worry the ACO will lead to cost-shifting. Medicare and Medicaid pay much less for reimbursement for health care treatment. To re-coop their costs, hospitals and health care providers participate in the unethical practice of shifting these losses to patients with insurance by charging more for the same services. Insurance companies then shift these costs to members by increasing their premiums and out-of-pocket costs.
With such an increase in the number of people eligible for Medicaid, providers will be receiving much less for the services they provide. Another concern is for the Americans that do not qualify for Medicaid. Income levels can qualify some for decrease in premiums for health insurance from private companies. However, there will be those that do not qualify in either category and do not have access to health insurance through their employer and cannot afford the high premiums of private insurance. The new health reform requires those that do not have some type of health insurance to have to pay penalties for not having insurance.
The Affordable Care Act was developed to provide health care to an additional 32 million Americans with the goal of reducing health care costs. Even though there are millions that will now have access to health care, there will be millions that do not qualify for the programs and will remain uninsured. There is much concern and debate the ACA with hurt the economy, increase health care costs, and add to the United States’ deficit. North Carolina, along with 21 other states, have chosen not to adopt the new law and either continue with current guidelines or choose to restructure their current health care policies. Concerns also arise about causing a decrease in quality of health care provided. The development of ACO’s through the ACA implies that quality of health care will be improved. However, there is question that ACO’s will lead to cost-shifting to re-coop lost costs from the influx of American’s now eligible for Medicaid and Medicare.
Caroll, B. (2013). North Carolina Thumbs its Nose at Obamacare. Retrieved from http://watchdogwire.com/northcarolina/2013/02/12/north-carolina-thumbs-its-nose-at-obamacare/ Dorgan, B. (2009). Health Care Reform: The Cost of Doing Nothing in North Carolina. Democratic Policy Committee. Retrieved from http://www.dpc.senate.gov/docs/states-fs-111-1-87/nc.pdf Hoban, R. (April, 2013). Cost of Care: How ‘Broken’ is NC Medicaid?. North Carolina Health News. Retrieved from http://www.northcarolinahealthnews.org/2013/04/15/how-broken-is-nc-medicaid/
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