Health Care Reform

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Date: 2018
Publisher: Gale, a Cengage Company
Document Type: Topic overview
Length: 1,332 words
Content Level: (Level 4)
Lexile Measure: 1260L

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Health care reform has been a highly partisan topic in the United States for many years. It enjoyed broad support among Democratic Party members, yet most Republicans opposed it. Members of both parties acknowledged that problems existed within the health care system, but disagreement centered on how to resolve those problems. The issues topped the political agenda of President Barack Obama (1961–) and the 111th US Congress in 2009. Obama helped to draft the Patient Protection and Affordable Care Act (PPACA), also known as the Affordable Care Act (ACA) and Obamacare, which was passed in 2010. The legislation overhauled health care in the United States and ensured every American had access to health insurance. It had many provisions that rolled out over the years that followed. Debate about the law continued, and Republicans vowed to repeal the act. In 2017, when President Donald Trump (1946–) assumed office, he vowed to repeal and replace the ACA. However, the health care law remained in place throughout early 2018.

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Critical Thinking Questions

  • What were some of the reasons health care in the United States needed to be reformed?
  • When did the Affordable Care Act (ACA) officially become law?
  • Do you think the ACA should be replaced with a new health care plan? Why or why not?

Background

Beginning with the Social Security Act, which was signed into law in 1935 by President Franklin D. Roosevelt (1882–1945), attempts to include some form of health benefits faced both political opposition and a lack of popular support. In 1965, President Lyndon B. Johnson (1908–1973) had the support of an overwhelming majority of Democrats in both the House and Senate. He signed into law the Social Security Act of 1965, creating the nation’s first publicly funded health insurance programs: Medicare and Medicaid. Medicare is a program funded entirely by the federal government and provides benefits to elderly individuals and disabled people. Medicaid is a federal- and state-funded program that provides benefits to low-income individuals and families.

In 1993, President Bill Clinton (1946–) made health care reform one of his top priorities. Support for the initiative was lacking, and the issue drew widespread opposition from a variety of commercial and public sector interest groups, lobbyists, and conservatives in the House and Senate. Even Democrats in Congress found it difficult to support. Because of its overly complex and bureaucratic structure, the resulting bill was never brought to the House for a vote. Much of the controversy surrounding the bill’s creation and subsequent failure made health care reform a politically dangerous topic for the next several years.

Need for Reform

The need for reform stemmed from the recognition of two growing problems within the American health care system: the number of people not covered by some form of health insurance and the rapid increase in the cost and spending for health care services. Millions of people in the United States did not have health care coverage, and this worsened with the recession that began in December 2007. Many people lost their jobs and health insurance. While lack of insurance does not necessarily mean lack of access to medical care, those without insurance are more likely to put off seeking treatment, especially preventive care, screenings, or vaccinations.

Spending on health care continued to rise. As health care spending took up an increasing proportion of American family incomes, less money remained for other necessities, such as food, clothing, shelter, and transportation. Much of the “cost” of health care was taken up by insurance premiums, which continued to rise much higher and faster that the average increase in wages. The rising costs of insurance was one reason why so many people remained uninsured. Other factors driving up the cost of health care were rising prices for drugs and medical services.

Another issue over health care reform was quality of care. Despite spending almost twice the global average on health care, Americans had not received a commensurate level of care. The United States scores at or below average on many indicators of quality of care. Studies of patient care in the United States also note that tens of thousands of people die because of errors committed at hospitals and other care facilities. Many of these mistakes are related to mix-ups with the types or doses of mediations patients receive.

Calls for Reform

US citizens ineligible for Medicare or Medicaid must rely on private insurance programs to help cover health care costs. Many of those who called for reform in the health care system had advocated changes to the structure of the private insurance market, thus providing access for those otherwise unable to obtain coverage. Regulatory reforms—such as barring private medical insurers from denying coverage for preexisting conditions and other discriminatory practices—also were proposed. Others argued for a publicly funded plan, either through extending current programs such as Medicare to include those under the age of sixty-five or by creating a separate program. Some recommended expanding employment-based insurance by offering tax credits or other assistance to help small businesses offer and maintain coverage for employees.

Obama signed the ACA into law on March 23, 2010. It became one of the most sweeping reform bills to be passed since the creation of Medicare and Medicaid in the 1960s. A central provision of the law—the individual mandate—required all individuals not receiving health care coverage through their employer or through public programs to purchase private insurance. People who did not purchase private insurance were reruired to pay a penalty tax. Within hours of the bill’s signing, several states filed suits against the federal government, challenging the law as unconstitutional. Twenty-seven states challenged the new law in the courts.

On June 28, 2012, the US Supreme Court ruled in favor of Obama’s health care law, upholding the individual mandate. Although the court decided that the government could not require individuals to purchase health insurance, it ruled the government could tax those who did not buy insurance. The Supreme Court did not uphold all elements of the law, including a provision that the government must expand eligibility for Medicaid.

Many features of the law, including provisions to allow many young adults to remain on their parents’ insurance until age twenty-six and to provide free preventive care to seniors, had been implemented while the law was being challenged. Other aspects of the law, such as linking payments to hospitals to outcomes and implementation of the individual mandate, rolled out over the next few years. While debate about the law continued, and many vowed to repeal it, the ACA remained in place throughout Obama’s term. When President Trump took office in 2017, he ordered Republicans in the House and Senate to create alternate health care bills to replace the ACA. None of the alternative plans was brought to a vote in the Senate as of early 2018, and the ACA remained in place.

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ACA Provisions

  • Requires almost every US citizen and legal resident to obtain health insurance or pay a fine.
  • Children can stay on their parents’ health insurance plans until they reach the age of twenty-six.
  • Small business owners with twenty-five or fewer employees can receive discounts by offering health insurance to their workers.
  • Insurance companies cannot deny coverage to people with preexisting conditions.
  • Lifetime limits on coverage are banned to ensure insurance companies could not deny coverage for medical issues that required expensive treatments.

Features of the ACA

The ACA offered many benefits to Americans, including a mandate that those with preexisting conditions could not be refused health insurance. The law also stressed preventive health services and tax credits for small businesses to help owners cover employees. It also prevented insurers from setting dollar limits on care, while other provisions helped to prevent fraud and waste.

The requirement that most Americans purchase some form of health insurance or be penalized sparked tremendous opposition to the plan and was the point most argued in the courts. Some individuals, including those within certain income guidelines or religious groups, were exempt, however. The ACA rolled out in stages since its implementation, and some provisions would not be fully available until 2020.

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Gale Document Number: GALE|EJ2181500108