Policy and Regulation News

2 Benefits and 2 Disadvantages of the Affordable Care Act

While the Affordable Care Act has benefited the American people in various ways, there are still some issues that need to be fixed to improve healthcare access.

By Vera Gruessner

The Patient Protection and Affordable Care Act has had many critics as well as those who have praised the landmark healthcare legislation. While the Republican Party is looking to repeal the Affordable Care Act, others consider that a revision would be more apt. Democratic Presidential Nominee Hillary Clinton is looking to expand the Affordable Care Act further to improve healthcare access. Below we outline both two benefits that came from the Affordable Care Act as well as two disadvantages that may need revision.

Medicaid expansion

State Medicaid Expansion

The Affordable Care Act has set aside federal funding for every state in the nation to expand their Medicaid programs. However, Medicaid expansion was put on the backburner for a number of states when the Supreme Court ruled that it would be optional and up to each individual state whether to expand these programs or not.

Nonetheless, the results show that Medicaid expansion along with the implementation of the health insurance exchanges have led to a significant drop in the number of uninsured Americans around the country. As many as 20 million people gained health insurance since the Affordable Care Act was implemented.

One Gallup poll shows that the rate of uninsured dropped 13 percent in Arkansas from 2013 to 2015 while Kentucky’s rate of uninsured fell 11.4 percent. Oregon, Rhode Island, and Washington all saw a drop in the uninsured rate of at least 10 percent between 2013 and 2015.

Accountable care organizations

The Affordable Care Act also brought with it some important reforms for the healthcare industry such as the accountable care organization, which aims to coordinate care between medical facilities and share in cost savings. The accountable care organization (ACO) was meant to reduce the fragmentation often seen within the healthcare industry.

ACOs have brought more focus toward population health management and the importance of primary care. While the primary creation of ACOs was in correspondence with the Medicare Shared Savings Program, many more private, commercial payers are now investing in accountable care organizations as well.

Additionally, accountable care organizations were meant to reduce overall healthcare spending. At this point in time, the growth rate of US healthcare spending has slowed down over the last five years. While there have been advantages to the Affordable Care Act, there have also been some issues that may have hurt healthcare access.

High premium costs

In more recent years, monthly premium prices have gone up significantly especially among health plans sold on the Affordable Care Act’s health insurance exchanges. In fact, double-digit jumps were predicted for Gold, Silver, and Bronze health plans on the exchanges in 2016, according to the Robert Wood Johnson Foundation.

The increased cost of monthly premiums has to do with the fact that an additional 20 million people now have healthcare coverage while the pre-existing condition clause is no longer valid and payers must cover costs of sicker patients. Health plans must also cover all costs of preventive services, which has also led payers to increase their premium prices to cover all of the extra spending.

High deductible health plans proliferate

Another area which may be harming consumers is the growing popularity of high-deductible health plans among payers. The Affordable Care Act has contributed to the growth of high-deductible health plans and more out-of-pocket costs, according to Cindy Mann, a Partner at Manatt Phelps & Phillips.

“We’ve seen virtually no change in the employer-based market in terms of the availability of coverage to the employer-based market,” Mann told HealthPayerIntelligence.com. “However, we’re beginning to see in the last few years in the commercial market are higher deductibles for people.”

One survey from Benefitfocus found that, among large group employers, 42 percent offer only high-deductible health plans while 52 percent provide both traditional and high-deductible healthcare coverage.

“Costs have been controlled by some degree by payers increasing the exposure to out-of-pocket costs by coverage,” Mann continued. “We’re seeing some amount of initial proposals on the exchange for premiums to rise. We’re seeing some exchanges where the proposals don’t show a significant increase in the premium. I think what we’re going to see next year among premiums on the marketplace will probably be mixed.”

“Different markets will have different pricing strategies. Lots of different factors are going on. Certainly, in the Medicaid program, the overall cost of the program is going up because it’s covering many more people, but the per enrollee cost has been averaging a little over 3 percent, which is modest,” she concluded.

While there have been clear advantages to the Affordable Care Act, some of the kinks of this healthcare legislation may need to be ironed out over the coming years.

Image Credit: Benefitfocus

 

Dig Deeper:

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