HEALTH INSURANCE EXPANSION 7
TheAffordable Health Act is one of the crucial enactment to the reformsof the health care system of the United States. Through a series ofexpansions and revisions to the legal framework governing the UnitedStates system, the Act presents essential protection that guaranteesaccess to affordable health insurance policies and thus healthinsurance expansion. The development of the healthcare system has itsset of shortcomings and results in adverse selection problems. Thispaper presents an analysis of the logical basis for the healthinsurance expansion under the Affordable Act, the relationship it haswith adverse selection problems, and its economic implications forhealth care organizations in the United States.
Thebasis for health insurance expansion.
Thehealth insurance expansion incorporates any measures aiming atincreasing the number of people with access to insurance coverage(Martin & Parker, 2011). The Affordable Care Act provides awatershed to the public health policy in the United States. Therationale for the health expansion is to ensure that the number ofthe uninsured person is at the bare minimal through an expansion andrevisions to the existing laws governing health insurance (Graves &Swartz, 2013). The Affordable Care Act promotes this rationalethrough an establishment of primary legal systems that were initiallynon-existent, guaranteeing universal access to an affordable healthinsurance cover. The full implementation of the Act intends to reducethe number of uninsured persons in the United States by more thanhalf. The Act will promote the expansion of health insurance byproviding insurance coverage to more than 90% of the Americanpopulation (Gresenz Et al., 2011). This move will reduce the numberof persons without access to insurance by over thirty millionindividuals while increasing enrollment to Medicaid by close tofifteen million new beneficiaries.
TheAffordable Act has a set of several aims with the primary goal beingthe achievement of a universal insurance coverage. The Act intends toachieve the goal through shared responsibilities among individuals,employers, and as well as the government. The Act also aims topromote and improve quality, fairness, and affordability of theinsurance policies to all citizens of United States (Martin &Parker, 2011). Again, the Act looks forward to the improvement of thevalue, quality, and efficiency of the healthcare system while at thesame time promoting the accountability of the health system tobenefit a diverse patient population. Additionally, the Act seeks tostrengthen the access to primary healthcare services while resultingin long-term changes to the availability of preventive and primaryhealthcare (Hogan Et al., 2015). Lastly, the Act intends to makestrategic investments to the health of the public by expanding thecommunity investments and the clinical preventive care programs.
TheAffordable Act presents efforts to restructure the existing financialrelationship between the healthcare system and the citizens of theUnited States. The goal of the move is to restrain the crisis of thehealth insurance enveloping the families, communities, individuals,the health care system, and the economy of the nation as a whole(Hogan Et al., 2015). In addition to creating universal coverage andshared responsibility, the Act outlines the federal standards forinsurers in the health industry offering products through theindividuals and the employer-sponsored benefit plans. The standardsensure ban to the discrimination against the old people, women, andboth children and adults with preexisting medical conditions (Graves& Swartz, 2013).
Therelationship between health insurance expansion and adverse selectionproblem.
Adverseselection is a phenomenon inherent in any insurance policy, includingthe health insurance. The phenomenon is evident when people base thedecisions to purchase insurance on their personal knowledge aboutinsurance or the chances of making an insurance claim from thatparticular insurance cover. Despite the efforts to improve theuniversal health coverage through the Affordable Care Act, the healthexpansion program presents elements of adverse selection. Forinstance, just a few years ago, the Act left out the older and poorpeople at the risk of falling ill. Although the government stepped inwith Medicare and Medicaid programs to cater for the needs of thesevulnerable groups, it has been evident over the years that the healthinsurance expansion program lacks the capability to provide adequatehealthcare to all parties at the lowest price (Graves & Swartz,2013).
Itis agreeable that the health insurance expansion program under theAffordable Care Act is a step forward in the healthcare industry.Unfortunately, the Act cannot escape the adverse selection problem,not unless all the people belong to the same risk pool under thebasic care of a national insurance policy. The functioning of the Actprovides people with better and adequate health insurance but notunder a single payer insurance which would ultimately end the diverseselection problem.
Economicimplications of health insurance expansion in the U.S.
Thehealth insurance expansion under the Affordable Care Act impacts thehealthcare organizations in several ways. One of these ways includesan increase in patient revenues, demand for care, and loweruncompensated costs. The Affordable Care Act intends to increase thenumber of people with access to insurance coverage. The implicationof a large number of insured persons is the growth in the demand forhospital care. Taking, for instance, an increase in the number ofinsured persons in California, the hospitals in the state willregister more needs for patient care since with the insurancecoverage, and people can afford healthcare services (Gresenz Et al.,2011). Alongside increased demand for health services is an increasein patient revenues. When the hospitals can attend to a large numberof patients, there is a growth in revenue collection. Initially,there could be many cases of uncompensated costs from servicesoffered to patients without insurance policies. Some of the costswould be high rendering the patient incapable of paying for theservices entirely. This would translate to increased amounts ofuncompensated costs. Besides, cases such as illnesses associated withold age or preexisting medical conditions were in rare occasionscovered by the insurance companies (Martin & Parker, 2011). Theseconditions are complex with high costs related to their management.The patients in most cases could not afford to pay full payment, yetthe insurance companies would not compensate it. With the AffordableCare Act, there are provisions promoting coverage of these conditionslowering the cases of uncompensated costs.
Thehealth insurance expansion ensures the slow growth of health carecosts while boosting hiring and improvement of the workers’salaries. The United States is experiencing stagnation in the growthof healthcare costs. The Affordable Care Act is responsible for thisslow growth through the medical reforms that reduce excess paymentsby promoting new payment models which promote efficient andhigh-quality care (Gresenz Et al., 2011). Slow growth of thehealthcare costs, in turn, reduce the growth of health insurancepremiums payable by employers. In the short-term period, these lowhealth insurance premiums reduce the cost of hiring additionalworkers making it simple to create more jobs. Again with time, morefraction of the premium savings reach the workers in the form ofhigher salaries.
Thehealth insurance expansion under the Affordable Care Act presents acrucial step in advancing the healthcare system in the United States.The program intends to improve the healthcare system by expanding andamending the existing framework in the healthcare system in theUnited States. Although the intention of the Act is to improve thehealthcare system, it suffers adverse selection problems by allowingpeople to choose insurance from different covers available. However,the expansion impacts the healthcare organization in the UnitedStates by increasing demand for care, lowering uncompensated costs,and slow growth of health care costs. The health insurance expansionprogram thus presents a great milestone in improving the healthcaresystem, and the advantages will outweigh the disadvantages in thelong-term.
Graves,J. & Swartz, K. (2013). Understanding State Variation in HealthInsurance Dynamics Can Help Tailor Enrollment Strategies for ACAExpansion. HealthAffairs, 32(10),1832-1840.
Gresenz,C., Laugesen, M., Yesus, A., & Escarce, J. (2011). RelativeAffordability of Health Insurance Premiums under CHIP ExpansionPrograms and the ACA. Journalof Health Politics, Policy and Law,36(5),859-877.
Hogan,D., Danaei, G., Ezzati, M., Clarke, P., Jha, A., & Salomon, J.(2015). Estimating the Potential Impact of Insurance Expansion onUndiagnosed and Uncontrolled Chronic Conditions. HealthAffairs, 34(9),1554-1562.
Martin,L. & Parker, R. (2011). Insurance Expansion and HealthLiteracy. JAMA, 306(8).