The Affordable Care Act

The Affordable Care Act

Expanding healthcare insurance can have a significant impact on society. The United States has several health insurance programs, including Medicaid, Medicare, the State Children’s Health Insurance Program, and Affordable Care Act. All these programs were adopted to increase healthcare access and improve patient care. The Affordable Care Act was signed by President Barack Obama in 2010 to extend the coverage of health insurance to more Americans. This paper analyzes the article “Information Asymmetries and risk management in healthcare markets: The U.S. Affordable Care Act (ACA) in Retrospect” by Mendoza to determine whether the ACA improved has improved healthcare or not.

Discuss the “moral theory” contained in this article.

The article contains the moral theory of moral hazard. Moral hazard is a concept that is related to insurance management and risk. From the concept of moral hazard, individuals change their economic behavior when they are insured or protected against particular losses and risks where another party bears the costs (Robertson et al., 2020). Moral hazard is divided into ex-ante and ex-post. However, whether ex-ante or ex-post, the insurer does not have enough information about the individuals being insured. This makes it unpredictable for the insurer to know how the insured would behave upon insurance. As a result, the insured may change their behavior upon completion of the contract. For instance, an individual’s insurance against health risks may make an individual seek medical care more frequently. Even though seeking preventive measures may benefit the insurer in the long run, more costs will be initially incurred when a large number of people seek medical care. As a result, the insurer may act by changing the terms of the contract, thus limiting the insured to only certain benefits (Einav & Finkelstein, 2018). Therefore, from the moral hazard concept, the insured and the insurer may act differently upon entering a contract.

Although the ACA has several shortcomings related to moral hazard, it increased access to healthcare among U.S. citizens. It allows individuals with pre-existing conditions and those at risk of disease to access healthcare. Some of the provisions in the act that increases accessibility to healthcare involve the prevention of insurers from making premiums based on the health status of individuals and the alterations made to the rating rules. Currently, the ACA allows insurers to adjust premiums only based on family size, tobacco use, geographical location, and age. This implies insurers cannot charge higher rates for people with underlying health conditions. Therefore, people with underlying health conditions can have better access to insurance hence better access to health care. By lowering the rates of high-risk groups below cost and those of low-risk groups above cost, the ACA improves insurance access among high-risk groups. Besides, the ACA allows children and younger adults to have greater insurance access by allowing them to stay on their parent’s insurance until they are 26 years old (Mendoza, 2017). Therefore, by ensuring there is better insurance for children and those with pre-existing conditions, the ACA has promoted greater health access.

The provisions of the ACA show that it will improve patient care. The ten essential benefits of the ACA can help improve the level of care given to patients. Healthcare professionals will prescribe the 10 essential benefits insured patients must enjoy. This will improve patient care, particularly in areas where some of the essential benefits were ignored. For instance, the fact that the ACA emphasizes preventive measures would make physicians prescribe these measures more to patients. As a result, the overall health of people will improve since diseases will be diagnosed and treated before they reach dangerous stages and overwhelming insurance costs.

During his tenure, there are several things that President Trump should have done to strengthen the ACA. Instead of sabotaging the ACA during his reign, he should have extended the coverage to more working Americans and increased the value of tax credits to lower premiums. This would have reduced the amount of money that families making 100% and 400% of the federal poverty level pay for their health insurance. In addition, President Trump would have allowed middle-class families to access health insurance by limiting the cost of coverage to a lower proportion of the income made by families and doing away with the 400% income cap on tax credit eligibility. If the cost of coverage had been limited to between 8.5% and 9.86% of income, then families would not be spending more than 9.86% of their income on the insurance of their health (Levy et al., 2020). As a result, access to health insurance would have increased, and more Americans would have access to quality healthcare.

Considering the rapid increase in healthcare costs over the past years, strategies have to be put in place to deal with these economic realities. One effective strategy involves focusing on wellness incentives and transparency of costs. Programs that promote the transparency of costs should be adopted so that healthcare providers do not exaggerate costs. One way of ensuring health there is transparency in costs is by ensuring pharmaceutical companies give a breakdown of how they price their drugs. Besides, there is a need to promote wellness programs developed to reduce health care costs by encouraging regular medical screenings, nutrition, and exercise. This will help reduce the costs of treating diseases.

Overall, the ACA has played a significant role in ensuring that millions of Americans have greater insurance access, which has led to improved patient care. The ACA enables people with pre-existing conditions to have better insurance access, preventing insurers from making premiums based on an individual’s health status. Through the ACA, children and young adults can also have insurance access until they are 26 years. Instead of President Trump attempting to sabotage the ACA, he should have improved insurance access by extending the coverage to more Americans. Although health insurance has decreased health care costs, there is a need to promote wellness programs and transparency of costs to deal with the economic realities of health care.

References

Einav, L., & Finkelstein, A. (2018). Moral hazard in health insurance: What we know and how we knowit. Journal of the European Economic Association, 16(4), 957–982. https://doi.org/10.1093/JEEA/JVY017

Levy, H., Ying, A., & Bagley, N. (2020). What’s left of the affordable care act? A progress report. Rsf, 6(2), 42–66. https://doi.org/10.7758/rsf.2020.6.2.02

Mendoza, R. L. (2017). Information Asymmetries and Risk Management in Healthcare Markets: The U.S. Affordable Care Act in Retrospect. Journal of Economic Issues, 51(2), 520–540. https://doi.org/10.1080/00213624.2017.1321451

Robertson, C. T., Yuan, A., Zhang, W., & Joiner, K. (2020). Distinguishing moral hazard from access for high-cost healthcare under insurance. PLoS ONE, 15(4), 1–17. https://doi.org/10.1371/journal.pone.0231768

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

Module 1 – SLP – INTRODUCTION TO THE U.S. HEALTH CARE DELIVERY SYSTEM

The overall goal of the Session Long Project is to examine health care delivery in the United States from a strategic perspective.

The Affordable Care Act

The Patient Protection and Affordable Care Act, or in short Affordable Care Act, changed the landscape of the health care industry. For this assignment, read the article “Information asymmetries and risk management in healthcare markets: The U.S. Affordable Care Act (ACA) in retrospect” by Mendoza, and write a paper to respond to the following questions:

1. Discuss the “moral theory” contained in this article.
2. Explain whether you agree or disagree with the author that the ACA was an answer to health care accessibility.
3. Explain whether you believe or do not believe that ACA will improve patient care.
4. Discuss what you think President Trump should do with the ACA.
5. Discuss what strategies you would recommend to deal with economic realities of health care based on your own research.

Length: Submit a 3-page paper, not including the cover page and the reference list.