‘Obamacare’ is the nickname given to a law – Patient Protection and Affordable Care Act (PPACA) – passed by the US Congress. President Barack Obama signed the bill on March 23, 2010. Obamacare tried to reform both the healthcare and health insurance industries in America.
But this act was not free from criticism. Republicans under the new President Donald Trump is coming up with a bill to repeal major parts of the law and “replace” it with another set of health care reforms. In this perspective, let us try to understand the details of the Obamacare.
What is Obamacare?
- The Patient Protection and Affordable Care Act (PPACA) commonly called The Affordable care Act (ACA) is a United States federal statute enacted by President Barak Obama on 23rd march, 2010.
- It is nicknamed as ‘Obamacare’.
- The Affordable Care Act’s main focus is on providing more Americans with access to affordable health insurance, improving the quality of health care and health insurance, regulating the health insurance industry and reducing the spending on health care in the US.
- The act is intended to extend insurance to more than 30 million uninsured people, by expanding Medicaid and providing federal subsidies to lower and middle-income group of America.
The Legislative History of Obamacare
- President Bill Clinton proposed a health care reform bill in 1993 that included a mandate for employers to provide health insurance to all employees through a marketplace of health maintenance organizations.
- There was a lot of negative publicity by conservative groups and the health insurance industry and also it was a complex procedure.
- Clinton had to negotiate and enacted the State Children’s Health Insurance Program (SCHIP) in 1997.
- In 1993, Republican senator John Chafee introduced the Health Equity and Access Reform Today Act.
- Another Republican proposal was introduced in 1994 by senator Don Nickles named the Consumer Choice Health Security Act.
- In 2006, an insurance expansion bill was enacted at the state level in Massachusetts which contained both individual mandate and insurance expansion. The Republican Governor Mitt Romney vetoed the bill but he, later on, he had to sign because the Democrats overrode his veto.
- An individual mandate is a requirement by law for certain persons to purchase or otherwise obtain a good or service.
- In 2007, Republican senator Bob Bennett and Democratic Senator Ron Wyden introduced the Healthy Americans Act but act shared the same fate as his predecessors.
- The health care reform was a hot topic during the 2008 presidential election.
- Presidential candidate Barak Obama said the health care reform would be one of his top priorities as president.
- Obama the former president of the United States addressed a joint session of Congress where he announced his intent to work on the healthcare program.
- On March 2009, the White House holds it first healthcare summit.
- Following a widespread opposition across the country publicly denouncing it as “socialized medicine” and “Obamacare” (which was later accepted by Obama himself), Obama on September 9, 2009, addressed critics via a joint session of Congress. He cited a letter sent to him from Senate.
- Ted Kennedy, who had died a few weeks earlier. Kennedy, who battled for health care reform throughout his career, said it was all a “moral issue” that addressed the “fundamental principles of social justice.”
- The legislation was soon introduced, and it became clear that the Democrats in theHouse of Representatives favored more sweeping reform than those in the Senate. Although the Democrats had, in theory, a filibuster-proof majority (60 votes) in the Senate, aided by independents Joseph Lieberman of Connecticut and Bernie Sanders of Vermont.
- A filibuster is a parliamentary procedure where a debate over a proposed piece of legislation is extended, allowing one or more members to delay or entirely prevent a vote on the proposal.
- The Affordable Health Care for America Act was passed by a slim majority of 220-215 in the House of Representatives on November 7.
- On December 24, all Democrats together, passed the legislation with 60–39 in the Senate, which would provide health care to more than 30 million uninsured Americans.
- Abortion was a hurdle to the passing of law as few conservative pro- life democrats threatened to withdraw the support unless it was added it restricted the coverage of abortion in any health insurance plans receiving federal subsidies
- Another hurdle was that there were considerable differences between the Senate and the House versions that will have to be negotiated.
- The election of Scott Brown to the Senate, who had campaigned actively against the health bill, deprived the Democrats of their filibuster-proof majority and made prospects for final passage uncertain.
- Abortion once again threatened to derail the legislation, a group of pro-life Democrats objected to the provisions on abortion. Obama then intervened by pledging to issue an executive order clarifying that federal money could not be used to provide abortions. Finally, the approval was given often accompanied by heated arguments both inside and outside the house. The PPACA was signed into law by Obama on March 23, along with the fixes bill on March 30.
- The PPACA was challenged by the attorney generals in more than a dozen states who filed suit, charging that the reform, in particular, the individual mandate, was unconstitutional, a number of them dismissed.
- Some federal judges did rule that Congress had, by enacting the individual mandate (due to take effect in 2014), exceeded its authority but none of these judges halted the implementation of the law in spite of the opposition by the administration. In March 2012 the S. Supreme Court heard challenges to the PPACA in the Affordable Care Act cases and ruled that the individual mandate was constitutional Congress’s taxing power and that the law’s expansion of Medicaid—the national health-insurance program for the poor, jointly funded by the federal government and the states—was constitutional as long as states that refused to expand their Medicaid rolls did not lose federal Medicaid funding for existing beneficiaries.
What are the allocated provisions of Obamacare?
- Health insurers will no longer be able to deny coverage based on current or prior health, thereby ensuring a guaranteed issue.
- Children can remain on their parents’ health coverage until age 26.
- Unless you qualify for an exemption, you are now required to purchase health insurance or pay a non-compliance penalty.
- Individuals and families with an income less than 400% of the federal poverty level who purchase health insurance through an Exchange will be eligible for a subsidy from the government. The federal poverty level is based on the number of family members and state of residence
- It prevents the insurance companies from imposing unjustified rate hikes.
- Improve quality of care and patient safety
- Medicaid is a state-administered program created in 1965 to provide healthcare services to the poor.One of the major provisions of Obamacare was an increase in the Medicaid income threshold which is used to determine if an individual or family qualifies for the program.
- A new interagency council is created to promote healthy policies and to establish a national prevention and health promotion strategy. The Secretary will award grants to eligible entities to promote individual and community health and to prevent chronic disease.
- The Secretary of Health and Human Services will provide funding for research in public health services and systems to examine best prevention practices. It will also encourage innovations in health workforce training, recruitment, and retention, and will establish a new workforce commission.
- The federal student loan program will be modified to ease criteria for schools and students, shorten payback periods, and to make the primary care student loan program more attractive to health care workers.
- Proper steps will be taken to ensure the integrity of federally financed and sponsored health programs.
- The Elder Justice Act will help prevent and eliminate elder abuse, neglect, and exploitation.
- Medicines and medical therapies of children and critical diseases will become more affordable.
What was the impact of Obamacare?
- The law has caused a significant reduction in the number and percentage of people without health insurance. It has been reported that percentage of people without health insurance fell from 16.0% in 2010 to 8.9% during the January–June 2016 period.
- The Congressional Budget Office reported in March 2016 that there were approximately 12 million people covered by the exchanges out of which 10 million will receive subsidies to help pay for insurance and 11 million made eligible for Medicaid by the law, a subtotal of 23 million people.
- The ACA also helps reduce income inequality measured after taxes, due to higher taxes on the top 5% of income earners and both subsidies and Medicaid expansion for lower-income persons.
What are the main limitations of Obamacare?
- To finance the health care overhaul, several new fees and taxes would be levied. An excise tax would be imposed on the most expensive employer-sponsored health insurance plans. The Medicare payroll tax would be increased for high-salaried employees, who also would have to pay a new tax on unearned income, including stock dividends and capital gains.
- The PPACA imposed limitations on the use of federal money. Federal funds could not be used for abortions except in cases of rape or incest or when the mother’s life was in danger. Additionally, illegal immigrants would not be able to buy insurance from subsidized exchanges even if they paid the full cost themselves.
- The Congressional Budget Office estimated that the plan would cost $938 billion over the next 10 years but would reduce the budget deficit by $143 billion in that period and by another $1.2 trillion over the following decade.
- The rising costs of care would have eventually impacted everyone with insurance, and we would have seen higher premiums paying for fewer services.
Summary and latest updates
- Obamacare does more than expanding health insurance coverage. The law touches nearly every American industry, from hospitals and doctors to restaurants.
- Obamacare expanded Medicaid – a public program that covers low-income Americans.
- Obamacare has been controversial.
- There have been more than 50 votes in the House of Representatives to repeal it and multiple Supreme Court cases to overturn or curtail it.
- Obamacare does two main things: expand access to health insurance and change the way the federal government pays doctors.
- Republicans under the new President Donald Trump came up with a bill to repeal major parts of the law.
- But the Affordable Care Act survived this attempt to repeal it by the Trump administration and House Republicans.
- Speaker Paul Ryan canceled a vote on legislation that would have replaced Obamacare, saying they “came up short” on votes.
Article by: Haya Wakil.