Americans Without Private Insurance: A Struggle for Healthcare Access - Essay Sample

Introduction

Healthcare is no doubt a priority to many states and nations, and similarly, the most expensive venture. Different individuals and organizations hence had to come up with ways to guarantee their well-being and that of their workers through several healthcare plans, and this included seeking insurance coverage from private insurance companies. A majority of Americans, more so the ones from poor socioeconomic status, however, missed out on these chances, and hence had difficulty in obtaining medical care when sick. After years and years of healthcare reforms by the government to address this issue, the former president Obama's administration made the dreams of many Americans come true by the formulation of the affordable care act (ACA) that changed the face of the American healthcare system completely. This act however similarly faced challenges in terms of the different policies it entailed, and it is therefore critical to examine the health insurance expansion brought about by the affordable care act as well as some challenges such as adverse selection and expound on the economic implications of this act.

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The Affordable Care Act

The American society has since its inception been subject to disparities stemming from the differences in race, socioeconomic status, political affiliations, and cultures, among other distinctions. It has been a fact that many philosophers, politicians, lawmakers, and religious leaders have attempted to root out, but one that is deeply embedded in the lives of individuals that all efforts are rendered ineffective. This had been so, until the proposal, amendment, and passing of the affordable care act in 2010, as an act that primarily targeted to eliminate the discrepancies that existed in the American healthcare system. The middle and low-class Americans were the most affected lot when it came to accessing healthcare insurance, and these individuals were the primary target for the ACA. When the affordable care act was enacted in 2010, the number of Americans who were not insured was nearly 50 million, with 19% of this population being the nonelderly, and about 91% had an income that was 400% below the federal poverty level (Kominski, Nonzee & Sorensen, 2017). These individuals were all eligible for the ACA healthcare plan cover, and this hence made the ACA a potential game-changer when it came to matters healthcare.

Health Insurance Expansion

The affordable care act operated mainly on the premise of health insurance expansion. It worked by expanding Medicaid for individuals who were earning up to 138% of the federal poverty level and increased the eligibility for the application of subsidies to individuals who earned between 139% and 400% of the federal poverty level. The resultant of this act has been the massive enrolment of American in health insurance covers. From the time of its inception, ACA has seen the reduction of the uninsured from 15.5% in 2010 to 9.1% in 2017 (Cancer Action Network, 2017). Americans have also been availed different marketplace options when it comes to health insurance, and many limitations have been eliminated. For instance, many patients (about 105 million Americans to be concise) who were diagnosed with chronic illnesses such as cancer were often enrolled in healthcare plans that imposed lifetime limits on the benefits they could accrue from their plans. The ACA, however, eliminated this gap, allowing every patient to enjoy the benefits from their plans without limits. The affordable care act has been subject to several changes, and this has led to some plans being modified to suit the needs of Americans better. This particularly applies to patients with pre-existing conditions. Former healthcare plans prohibited patients with preexisting conditions from obtaining health insurance covers, and this affected 52.2 million Americans in 2015 (Cancer Action Network, 2017). The exclusive of this limitation has hence made ACA better. However, it still faces challenges.

Adverse Selection

Insurance expansion has been an incredible healthcare booster for many individuals, but it has also led to a phenomenon referred to as adverse selection. To understand this better is a scenario where an insurance company sells an insurance cover at a monthly premium of $600. A 21-year-old lady with no health complications might find this an outrageous expenditure, bearing in mind that there are less probable to spend the $600 on healthcare in a month, while a 60-year-old diabetic man might find this rates quite profitable. This, therefore, creates a situation where more sick people seek insurance cover while people who are less likely to fall ill refrain from insuring themselves. High risk of insurance is hence insured while lower risks are not (Davis, 2019). When this is unregulated, insurance companies gradually fall in a situation where they spend too much on insurance plans that they can recover. Insurance companies have hence adjusted to cater for these discrepancies, and some have opted for uncouth ways to do it. Some insurance companies use underwriting, whereby the client's medical records, lifestyle choices, demographics, and prior claims are considered when it comes to charging the insurance cover.

The Affordable Care Act On Adverse Selection

The affordable care act has taken a particular interest in the adverse selection issue. This act hence prohibited insurance companies from practicing bias when it comes to patients with preexisting conditions. It similarly prohibits the overcharging of these individuals or the imposition of lifetime limits or caps on their benefits. The ACA has, on the other hand, acted as an advocate for the insurance companies, more when it comes to addressing issues of adverse selection. The act requires every American citizen eligible for an insurance plan to enroll in them, or otherwise face tax penalties (Davis, 2019). This hence ensured that even those individuals who might not have deemed it essential to have an insurance plan took it anyway. However, this penalty was lifted in 2018, as Congress assessed the market prices and predicted a 10% increase in insurance costs with the penalty in place. Another way it has helped eliminate adverse selection has been through subsidies to moderate-income earners to enable them to buy an insurance plan. ACA places restrictions on when one can enroll on an insurance plan, and this is often in each autumn during the annual open enrollment. Therefore, people are deterred from seeking medical insurance only once they fall sick. Deliberate health risk behaviors such as smoking are also charged higher, and this is permitted by the ACA.

Economic Implications of ACA

The affordable care act has been a basic financial venture in the healthcare sector. This act has had tremendous economic impacts on the individuals who have taken the insurance plans, the healthcare centers that handle them as well as the states within which they exist. Affordable care act has grown to become the third largest effort forged towards the reduction of poverty in the United States as it has reduced the federal poverty level to less than 50% (Sommers & Oellerich, 2012). Coverage expansions significantly reduced uncovered care costs in hospitals in 2014 by 21%, which extrapolated to $7.4 billion. States have similarly gained form ACA. These gains have ranged from reductions in expenses from a behavioral health issue to the creation of employment opportunities. Arkansas is one of the many states that have significantly benefited from the ACA. However, the economic implications of ACA in this state are disproportionate. From an analysis made by RAND as predicted from the 2016 statistics, Arkansas is bound to experience an increase in Medicaid expenditures by $430 million as a result of cuts in Medicaid reimbursement, reduced DHS payments and taxes from insurance plans. This number is reached by adding $750 million in Medicaid expenditures, and $850 for federal subsidies and subtracting $1.8 billion on various expenses (Price & Saltzman, 2013). The GDP is, however, estimated to increase by $550 million and the employment opportunities created to be about 6,200. Therefore, the ACA has actively impacted on the economic stabilities and trends of various individuals, organizations, and states.

Conclusion

Healthcare expenditures have often been a challenge for many states, and individuals, and this hence necessitated for the creation of a plan that would eradicate this problem once and for all. The ACA has been the most conventional and effective insurance plan that has seen many Americans enrolled in insurance plans. This act mainly targeted people from the middle and low class of America, and the successes it accrued have been widely appreciated. Healthcare insurance, however, dragged along it a phenomenon termed as adverse selections, where more sick people enroll for insurance while less sick ones refrain from it. This has been a challenge to insurance companies, and the ACA came up with guidelines to minimize this effect. The ACA has had an immense impact on the economy of individuals and states.

References

Cancer Action Network (2017). Health insurance expansion- united states. Retrieved from https://www.fightcancer.org/policy-resources/health-insurance-expansion-united-states#_edn6

Davis, E. (2019). How Health Insurance Companies Prevent Adverse Selection. Verywellhealth. Retrieved from https://www.verywellhealth.com/adverse-selection-what-it-is-how-health-plans-avoid-it-1738416

Kominski, G. F., Nonzee, N. J., & Sorensen, A. (2017). The Affordable Care Act's Impacts on Access to Insurance and Health Care for Low-Income Populations. Annual review of public health, 38. Pp.489-505. Doi: 10.1146/annurev-publhealth-031816-044555

Price C. C. & Saltzman E. (2013). The Economic Impact of the Affordable Care Act on Arkansas. RAND health quarterly. 3(1):1. Retrieved from https://www.rand.org/pubs/periodicals/health-quarterly/issues/v3/n1/01.html

Sommers, B. and Oellerich D. (2012). The poverty-reducing effect of Medicaid. Journal of Health Economics. Retrieved from http://ac.els-cdn.com/S016762961300091X/1-s2.0-S016762961300091X-main.pdf?_tid=0460f188- c994-11e4-8b30-00000aab0f27&acdnat=1426260009_24525a843a318640b76e4afffd28e487